Economic principles for the enforcement of abuse of dominance provisionsChiara Fumagalli and Massimo Motta1Università Bocconi and CEPR; ICREA-Universitat Pompeu Fabra and Barcelona School of Economics1 INTRODUCTIONOn 27 March 2023, the European Commission (EC) amended the Guidance on enforcement priorities,2 which was issued in 2009,3 and announced it would write new guidelines on exclusionary abuses. It also published a Competition Policy Brief explaining these initiatives in light of the evolution of the case law and the EC’s practice (European Commission, 2023).In this Policy Insight, we offer our view on how to use economics to improve the enforcement of the abuse of dominance provisions of Article 102 TFEU. We shall do so by covering the points amended by the EC Guidance Paper and discussed in the related Policy Brief. In particular, Section 2 will discuss the definition and the objective of exclusionary abuse; Section 3 will focus on horizontal foreclosure, suggesting how to treat conduct such as predation, rebates, and exclusive dealing; and Section 4 will focus on foreclosure in adjacent markets, discussing how to treat, for instance, refusal to supply, margin squeeze, self-preferencing, and tying.Before dealing more extensively with each of these issues, however, we spell out a few principles that in our view should guide an effects-based approach of exclusionary abuse, and summarise the main arguments we shall make in our paper.1.1 General principlesWe welcome the EC’s intention to issue Guidelines on the enforcement of exclusionary abuse and to clarify how it intends to incorporate an effects-based approach (fully endorsed by the Union Courts in recent case law) in such enforcement. This will promote predictability and legal certainty.Consistently with the objective of improving legal certainty, it is important to stress that an ‘effects-based’ and ‘economically sound’ approach does not mean a ‘case-by-case’ approach where each case is assessed in a completely different way, nor that 1 This paper is based on two documents written for DG Competition of the European Commission. The information and views set out here are those of the authors and do not necessarily reflect the official opinion of the Commission. Without implicating them (on some of the issues, we ‘agree to disagree’), we have greatly benefited from discussions with Giulio Federico, David Kovo, Thomas Buettner, Lluis Saurí, Hans Zenger, as well as members of DG Competition’s Economic Advisory Group on Competition Policy (EAGCP), in particular Giacomo Calzolari, Patrick Rey and Emanuele Tarantino.2 Communication from the Commission. Amendments to the Commission Communication – Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conducts by dominant undertakings.3 Communication from the Commission -...
