Abuse of a dominant position
HOW TO ACT WHEN IN A DOMINANT POSITION?
Competition law prohibits abusive behaviour by companies in a dominant market position.
A dominant position is not defined merely by market share, but by classification as a market leader. Typically, a company is considered to hold a dominant position if it has a market share of more than 40%, but even a market share of 15% may be considered dominant if it is the largest player in a fragmented market. Determining the market dominance of any given company requires detailed and in-depth analysis in close collaboration with the Legal Department.
It is not illegal to be in a dominant position, but it is illegal to abuse one’s market power in order to prevent or restrict competition.
Behavior considered lawful for a company not in a dominant position may be illegal when carried out by a company in a dominant market position.
✓ — Refuse to sell to a customer if you have an objective and justified reason for the refusal.
✗ — Offer loyalty rebates which put pressure on the customer to purchase products
✗ — Use “tying” sales, i.e. the practice of selling one product only under the condition that the buyer purchases another product
✗ — Offer unequal service to similar customers with no objective justifications
✗ — Impose obligations of exclusivity on suppliers and customers.