Paper Summary:

The paper considers specific Commission decisions and the European Court of Justice (ECJ) case law in its evaluation of the approach taken to the Article 82 EC Treaty. The paper deals with exploitative abuse and focuses on the category known as 'excessive prices' and the case of United Brands which is a frequently cited precedent in EC competition law. The paper then examines why in this case the Commission decision was quashed by the European Court of Justice. The paper discusses the Court's twofold test but how it is unclear whether this twofold test is appropriate.

Outline:
United Brands and the European Court of Justice Twofold Test
The Twofold Test Applied by the European Court of Justice: an Appropriate Test?

From the Paper:

"In competitive markets, firms fight to gain more customers. In order to outperform their competitors and increase their market share, they lower prices, offer discounts to selected customers, build infrastructures and facilities to meet new demand, invest in research and development activities to lower their production costs or improve their goods and services. All these behaviours increase the quality and the variety of products on offer and reduce the level of prices thereby making customers better off. However, some of these behaviours can be adopted by firms with a strong hold on the market to alter the competitive process in their favour so that the benefits customers derive from competition can be lost. For this reason, Article 82 of the EC Treaty prohibits abusive behaviours adopted by firms with a dominant position. It states that 'any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States' and then draws up a non-exhaustive list of what can be said to constitute such abuse, leaving the competition authorities a wide discretion when interpreting the basic prohibition."

Sample of Sources Used:

• Alison Jones and Brenda Sufrin, EC Competition Law: Text, Cases and Materials 2nd edn (Oxford University Press; 2004)
• Richard Whish, Competition Law Fifth Edition (Lexis NexisTM Butterworths)
• Barry J. Rodger and Angus MacCulloch, Competition Law and Policy in the EC and UK 3rd Edition (Covendish publishing)

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