European Commission Invites Comment on Proposed Article 82 Exclusionary Abuses

On December 19, the European Commission released its long-awaited discussion paper on "exclusionary abuses" under Article 82 of the EC treaty. Article 82, which is analogous to Section 2 of the Sherman Act, prohibits companies that occupy a "dominant position" (i.e., a position of market power) from "abusing" that position. The Commission has dealt with a number of high-profile Article 82 cases in recent years, including cases against Coca-Cola, IMS Health and Microsoft.

The Commission launched its review of Article 82 last year in response to criticism from business and antitrust practitioners that the Commission's enforcement practices and the rather limited body of case law under Article 82 had a chilling effect on many companies, stifling innovation and preventing companies from competing vigorously to the benefit of consumers. In most of these cases, the immediate impact of the practice in question is not to harm customers or consumers but to exclude competitors from access to customers or to necessary inputs. Defendants in such cases often claim that these practices benefit consumers and should therefore be allowed, regardless of their effect on competitors. Recent cases have included discount policies that create strong disincentives to purchase competitors' products, refusals to grant access to interface information necessary to allow rivals to compete in neighboring markets, and price squeezes by incumbent telecom operators who charge consumers less for ADSL services than they charge rival operators for access to the necessary infrastructure to provide competing services. The discussion paper therefore sets out proposed guidelines for evaluating such "exclusionary abuses." The Commission is inviting interested parties to submit written comments before March 31, 2006.

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