Abuse of Dominance - Exploitative Abuses

Article 102 TFEU has been interpreted as prohibiting not only exclusionary abuses, but also exploitative ones. In particular, sub-section (a), which prohibits ‘directly or indirectly imposing unfair purchase or selling prices' by a dominant firm, has been understood as proscribing not only unfair low prices (predatory prices) but also unfair high prices per se, that is without need of proof of anti-competitive conduct or intent.The prohibition against excessive prices is one of the most intriguing competition law prohibitions. Its analysis involves a moral, economic and sociological exploration, with long historical roots. Such regulation encapsulates issues such as the goals and the underpinnings of competition law; the equilibrium point which is adopted to balance between the forces of Darwinian capitalism and those of social justice; the role of government regulation; the balance between practical problems and theoretical principles; and the assumptions regarding the relative administerability of various types of regulation. Monopoly pricing regulation is thus, in many ways, a microcosm of competition law. Accordingly, this chapter analyzes the rationales of the prohibition as well as its ability to achieve them in practice. It combines a doctrinal analysis with a critical one.The chapter is structured as follows. Part I analyzes the rationales that stand at the basis of the excessive pricing prohibition: economic, moral and political economy rationales, as well as its historical roots. Part II analyzes the conceptual challenges that it raises. Part III focuses on the elements of the prohibition as well as the methodologies that were developed for applying it. Part IV challenges the prohibition on practical grounds. A conclusion ensues