On March 27, 2023, the European Commission (the “Commission”) announced it would revise its 2008 Guidance on enforcement priorities regarding Article 102 TFEU[1] (the “2008  Guidance”).  The Commission has amended its 2008 Guidance in a Communication and Annex.  It has also launched a consultation seeking feedback on the adoption of new Guidelines on exclusionary abuses of dominance that the Commission intends to adopt in 2025 after publishing a draft in 2024.  While the amendments in the 2008 Guidance bring it closer to the case law, they show the Commission seeking more discretion and leeway in its investigations.

The 2008 Guidance applied the Commission’s “more economic approach”[2] to Article 102 enforcement.  The Commission announced it would focus on “those type of conduct that are most harmful to consumers,”[3] and the effectsof the potentially abusive conduct on the competitive process and, hence, consumers.  While the 2008 Guidance sets out the Commission’s enforcement priorities and is not intended to state the law,[4] it has proved influential in shaping it.  The Court of Justice has largely confirmed the expansion of the “effects-based” approach to Article 102 supported by the 2008 Guidance, most notably with the as-efficient competitor test.[5]  However, the Commission has said that as “priorities have evolved,”[6] so must its 2008 Guidance.  The expansion of the effects-based approach by the EU Courts limits the Commission’s discretion to modify its approach.  The amendments to the 2008 Guidance, however, demonstrate a desire for discretion and may signal a desire to depart from the “more-economic approach.” 

The following are some key changes set out in the Annex to the amended Communication:

  • The Commission will no longer consider the profitability of the dominant undertaking’s abuse as relevant for its enforcement priorities.  Rather, the key factor is whether the dominant undertaking’s conduct adversely impacts an effective competitive structure,[7] allowing it to negatively influence “prices, production, innovation, variety or quality of goods and services” to its own advantage and to the detriment of consumers.
  • The Commission considers that the price-cost “as-efficient competitor test” is optional under the CJEU’s case law,[8] and “may” rather than “will” examine economic data relating to cost and sales prices.[9]  Further, its amended 2008 Guidance now states that the Commission will “generally” rather than “normally” intervene where the dominant undertaking threatens an as-efficient undertaking, deeming that “genuine competition may also come from undertakings that are less efficient than the dominant firm, in terms of their cost structure.”[10]  In its Policy Brief, the Commission believes that this is the case in markets where barriers to entry and expansion are “significant,” including where there are network effects and economies of scale, highlighting digital markets in particular.  The original 2008 Guidance already referred to the potential relevance of less efficient competitors, but the signal the Commission’s appetite to give them more prominence. 
  • The Commission also introduces changes to its assessment of input foreclosure conduct.  The 2008 Guidance largely operated on the assumption that a refusal to supply, margin squeeze, and other “constructive refusal to supply” raised similar economic considerations and should be treated in the same way.  However, under the amended 2008 Guidance, for the case to be an enforcement priority, an input will no longer need to be indispensable in cases of “constructive refusal to supply” and margin squeezes.[11]  This amendment aligns with developments in the case law.

It remains to be seen if and how these changes will affect Union Courts’ reviews of Commission Decisions.  Interested parties are invited to submit their views on the proposed Guidelines within four weeks from March 27, 2023. 

[1]              Communication from the Commission – Guidance enforcement priorities in applying Article 82 of the EC Treaty, dated  (“2008 Guidance”). Article 102 of the TFEU prohibits the abuse of a dominant position that may affect trade between Member States.

[2]              M Monti, ‘“A Competition Policy for Today and Tomorrow”’ (2000) 23 World Competition 1.

[3]              2008 Guidance, paragraph 5.

[4]              2008 Guidance, paragraph 3.

[5]              See, for example Intel v. Commission (Case C-413/14 P) EU:C:2017:632, paragraphs 133-135 “Nor does [Article 102] seek to ensure that competitors less efficient than the undertaking with the dominant position should remain on the market […] that is why Article 102 TFEU prohibits a dominant undertaking from, among other things, adopting pricing practices that have an exclusionary effect on competitors considered to be as efficient as it is itself.”

[6]              Communication from the Commission, Amendments to the Communication from the Commission Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings C(2023) 1923 final, paragraph 7.

[7]              Judgment of 19 January 2023, Unilever Italia Mkt.Operations Srl v Autorita Garante della Concorrenza e del Mercato, Case C-680/20, EU:C:2023:33, paragraph 36.

[8]              Unilever Italia Mkt.Operations v Autorita Garante della Concorrenza e del Mercato, (Case C-680/20) EU:C:2023:33, paragraphs 62.

[9]              Annex to the Communication from the Commission (C(2023) 1923 final, page 2.

[10]             Ibid., page 1.

[11]             Ibid., page 3-4.