Definition

Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it, as incompatible with the internal market, insofar as it may affect trade between Member States. Article 102 TFEU also provides examples of abusive practices. This entry examines the constituent elements of the prohibition found in Article 102 TFEU.

Introduction

Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits the abuse of a dominant position within the internal market or in a substantial part of it, as incompatible with the internal market, insofar as it may affect trade between Member States. This entry examines the constituent elements of the prohibition found in Article 102 TFEU. These elements are (i) one or more undertakings of a dominant position within the internal market or in a substantial part of it, (ii) effect on trade between Member States, and (iii) abuse.

One or More Undertakings of a Dominant Position Within the Internal Market or in a Substantial Part of It

The Concept of an “Undertaking”

First and foremost, it is clear from Article 102 TFEU that a dominant position can only be held by “one or more undertakings” for the purposes of that provision. An “undertaking” for the purposes of EU competition law is “every entity engaged in an economic activity regardless of the legal status of the entity and the way in which it is financed” (Case C-41/90 Hofner and Elser v Macrotron GmbH [1991] ECR I-1979 [21]). In turn, “economic activity” is defined as “any activity consisting in offering goods or services on a given market” (Cases C-180/98 etc Pavel Pavlov and others v Stichting Pensioenfonds Medische Specialisten [2000] ECR I-6451 [75]). A “functional approach” is adopted when determining whether an entity is an “undertaking” for the purposes of competition law, meaning that the same legal entity may be acting as an undertaking when carrying on one activity but not when carrying on another activity (Whish and Bailey 2012, 84–85). Similarly, the fact that the entity in question does not have a profit motive or economic purpose is irrelevant in establishing whether it is engaged in “economic activity” (Case C-67/96 etc Albany International BV v SBT [1999] ECR I-5751 [85]; Case 155/73 Italy v Sacchi [1974] ECR 409 [13–14]). Activities that are not economic are those provided on the basis of “solidarity” and those that consist in the exercise of public power and procurement pursuant to a noneconomic activity (Whish and Bailey 2012, 87 et seq). “Solidarity” in turn is defined as “the inherently uncommercial act of involuntary subsidisation of one social group by another” (Opinion of Advocate General Fennelly in Case C-70/95 Sodemare v Regione Lombardia [1997] ECR I-3395 [29]). The case law on this has mostly been concerned with national health services, compulsory insurance schemes, pension schemes, etc., as well as provision of services by public authorities which fulfill essential functions of the State.

Dominant Position

Dominant position is not defined in the Treaty. As is clear from Article 102 TFEU, it can be held by one or more undertakings. Where the dominant position is held by more than one undertaking, they would have a position of “collective dominance.” The first step in establishing whether an undertaking enjoys a dominant position for the purposes of Article 102 TFEU is to define the “relevant market.” This is because a dominant position cannot be held in the abstract but can only be held over a relevant market.

Market Definition

Defining the relevant market delineates the products or services that are in competition and enables one to gauge how much power an undertaking has over its competitors and consumers (Rodger and MacCulloch 2015, 95). For the purposes of competition law, the relevant market has to be defined with regard to product, geography, and occasionally time. According to the Court of Justice of the European Union (CJEU), the definition of the market is one of establishing interchangeability: if products or services are seen as interchangeable, then they are part of the same market (e.g., Case 6/72 Europemballage Corporation and Continental Can Company Inc v EC Commission [1973] ECR 215 [32]). The European Commission has published a Notice on the definition of the relevant market ([1997] OJ C 372/5). According to the Notice, the main purpose of market definition is to identify in a systematic way the competitive constraints that the relevant undertakings face (Notice [2]). The objective of defining a market in both its product and geographic dimension is to identify those actual competitors of the undertaking involved that are capable of constraining that undertaking’s behavior and of preventing it from behaving independently of effective competitive pressure (Notice [2]). Consequently, market definition makes it possible inter alia to calculate market shares that would convey meaningful information regarding market power for the purposes of assessing dominance (Notice [2]).

There are three main sources of competitive constraints on an undertaking’s conduct: demand substitutability, supply substitutability, and potential competition (Notice [13]). In the Notice, regarding demand substitutability, the Commission adopts the so-called “hypothetical monopolist” test. This test asks whether a hypothetical small but significant non-transitory increase in price (SSNIP) of the product produced by the undertaking under investigation would lead to customers switching to other products (Notice [17]). The range of such an increase is usually 5–10%. If customers would switch to other products following such an increase, then the product of the undertaking under investigation and those other products to which the customers would switch are considered to be in the same product market (Notice [18]). Supply substitutability seeks to establish if other suppliers would switch their production to the products of the undertaking under investigation and market them in the short term without incurring significant additional costs, if there was a small and permanent increase in the price of the product under investigation (Notice [20]). However, the Notice stipulates that the Commission would take into account supply substitutability only where its effects are equivalent to those of demand substitution in terms of effectiveness and immediacy (Notice [20]). Other than the relevant product market, the relevant geographical market has to be also defined. According to the CJEU, the geographical market is limited to an area where the objective conditions of competition applying to the product in question are sufficiently homogenous for all traders (Case 27/76 United Brands Continentaal BV v EC Commission [1978] ECR 207 [11]). In certain cases, it may be necessary to define the temporal market as well since competitive conditions may change depending on season, weather, time of the year, etc. It should be noted that the narrower that the market is defined, the more likely that the undertaking under investigation will be found to be dominant.

Establishing Dominance

Once the relevant market is defined, then it can be established whether a given undertaking is dominant. The CJEU has defined dominant position as “a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers” (United Brands [65]). Such a position does not exclude some competition – which it does where there is a monopoly or quasi-monopoly – but enables the undertaking which profits by the position, if not to determine, at least to have an appreciable influence on the conditions under which that competition will develop and in any case to act largely in disregard of it so long as such conduct does not operate to its detriment (Case 85/76 Hoffmann-La Roche & Co AG v EC Commission [1979] ECR 461 [39]). Although the definitions from case law appear to relate to only undertakings on the supply side, clearly, an undertaking on the buying side can also be a dominant undertaking for the purposes of competition law, as was the case in, for example, British Airways (see Case C-95/09 P British Airways v EC Commission [2007] ECR I-2331).

According to the European Commission, dominance entails that competitive constrains are ineffective, and hence, the undertaking in question enjoys substantial market power over a period of time (Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings [2009] OJ C45/7 [20]). An undertaking which is capable of profitably increasing prices above the competitive level for a significant period of time does not face sufficiently effective competitive constraints and can thus generally be regarded as dominant (Guidance [11]). The assessment of dominance will take into account the competitive structure of the market and in particular factors, such as (i) constraints imposed by existing supplies from, and the position on the market of, actual competitors, (ii) constraints imposed by the credible threat of future expansion by actual competitors or entry by potential competitors, and (iii) constraints imposed by the bargaining strength of the undertaking’s customers (countervailing buyer power) (Guidance [12–18]). Regarding the first of these factors, market shares provide a useful first indication of the market structure and of the relative importance of various undertakings on the market (Guidance [13]). However, market shares will be interpreted in light of the relevant market conditions and, in particular, of the dynamics of the market and of the extent to which products are differentiated (Guidance [13]). According to the CJEU, “although the importance of the market share vary from one market to another the view may legitimately be taken that very large shares are in themselves, and save in exceptional circumstances, evidence of the existence of a dominant position” (Case 85/76 Hoffmann-La Roche & Co v EC Commission [1979] ECR 461 [41]). Interestingly, in AKZO the CJEU held that a market share of 50% could be considered to be very large, and in the absence of exceptional circumstances, an undertaking with such a market share would indeed be presumed to be dominant (Case C-62/85 AKZO Chemie BV v Commission [1991] ECR I-3359 [60]). Consequently, an undertaking with 50% of market share would have to rebut this presumption to prove that it is not dominant. Interestingly, in its Guidance, instead of referring to a presumption of dominance, the Commission refers to the fact that low market shares are generally a good proxy for the absence of substantial market power: dominance is not likely if the undertaking’s market share is below 40% in the relevant market (Guidance [14]). It should be noted that the Guidance is not intended to constitute a statement of the law and is without prejudice to the interpretation of Article 102 TFEU by the CJEU or the General Court; the Guidance sets the enforcement priorities of the European Commission in applying Article 102 TFEU to certain types of abusive practices (see Akman 2010 on the Guidance and its legal position as a soft law instrument). It is noteworthy that the lowest market share that an undertaking has been held to be dominant by the Commission and confirmed on appeal by the General Court is 39.7% in British Airways. In any case, the Commission also acknowledges in the Guidance that there may be specific cases below the threshold of 40% market share where competitors are not in a position to constrain effectively the conduct of a dominant undertaking, for example, where they face serious capacity limitations, and such cases may also deserve the attention of the Commission (Guidance [14]).

Other than market shares, potential competition is also important for establishing dominance. Assessing potential competition entails identifying the potential threat of expansion by actual competitors, as well as potential entry by other undertakings into the relevant market. These are relevant factors since competition is a dynamic process and an assessment of the competitive constraints on an undertaking cannot be based merely on the existing market situation (Guidance [16]). An undertaking can be deterred from increasing prices if expansion or entry is likely, timely, and sufficient (Guidance [16]). According to the Commission, in this context, “likely” refers to expansion or entry being sufficiently profitable for the competitor or entrant, taking into account factors such as barriers to expansion or entry, the likely reactions of the allegedly dominant undertaking and other competitors, and the risks and costs of failure (Guidance [16]). For expansion or entry to be considered “timely,” it must be sufficiently swift to deter or defeat the exercise of substantial market power (Guidance [16]). Finally, to be “sufficient,” expansion or entry has to be more than small-scale entry and be of such a magnitude to be able to deter any attempt to increase prices by the allegedly dominant undertaking (Guidance [16]).

The issue of potential competition brings to the fore the discussion of “barriers to entry or expansion.” There is considerable debate over what should be included within the term “barriers to entry” (Rodger and MacCulloch 2015, 101): one school of thought (Chicago) would only accept as a barrier to entry a cost to new entrants which was not applicable to the existing operators when they entered the market, whereas another school of thought (including the European Commission) views barriers to entry to be much wider, including any factor that would tend to discourage new entrants from entering the market. According to the Commission, barriers to expansion or entry can take various forms, such as legal barriers, tariffs or quotas, and advantages enjoyed by the allegedly dominant undertaking (such as economies of scale and scope, privileged access to essential input or natural resources, important technologies, or an established distribution and sales network) (Guidance [17]). Barriers to expansion or entry can also include costs and other impediments faced by customers in switching to a different supplier (Guidance [17]). Furthermore, the allegedly dominant undertaking’s own conduct may also create barriers to entry, for example, where it has made significant investments which entrants or competitors would have to match or where it has concluded long-term contracts with its customers that have appreciable foreclosing effects (Guidance [17]). Considering the conduct of the undertaking to be an entry barrier is clearly controversial since conduct is normally taken into account when assessing the “abuse” element of the provision rather than the element of dominance. Such an approach is circular in that conduct will not normally be considered abusive until dominance is established, but if conduct can also indicate dominance, then the likelihood of a finding of abuse clearly increases (Rodger and MacCulloch 2015, 102).

The final factor to be taken into account in establishing dominance is countervailing power held by the trading partners of the allegedly dominant undertaking. Competitive constraints may be exerted not only by actual or potential competitors but also by customers (or suppliers, if the dominant undertaking is on the buying side) of the allegedly dominant undertaking. According to the Commission, even an undertaking with a high market share may not be able to act to an appreciable extent independently of customers (or suppliers, if the dominant undertaking is on the buying side) with sufficient bargaining strength (Guidance [18]). Such bargaining power may result from the trading partner’s size, commercial significance, ability to switch, ability to vertically integrate, etc. (Guidance [18]).

Dominant Position “Within the Internal Market or in a Substantial Part of It”

According to Article 102 TFEU, to be subject to the prohibition therein, the relevant undertaking has to have a dominant position “within the internal market or in a substantial part” of the internal market. This has been noted to be the equivalent of the de minimis doctrine under Article 101 TFEU, according to which agreements of minor importance are not caught by the prohibition found in Article 101 TFEU (Whish and Bailey 2012, 189). Clearly, where dominance is established to exist throughout the EU, there is no difficulty in deciding that the dominant position is held within the internal market or in a substantial part of the internal market. Where dominance is more localized than this, then it will have to be decided what “substantial” refers to. Substantiality does not simply refer to the physical size of the geographic market within the EU (Whish and Bailey 2012, 190). Rather, what matters is the relevance of the market in terms of volume and economic opportunities of sellers and buyers (Cases 40/73 etc Suiker Unie and others v EC Commission [1975] ECR 1663 [371]). Each Member State is likely to be considered to be a substantial part of the internal market, as well as parts of a Member State (Whish and Bailey 2012, 190).

Effect on Trade Between Member States

The prohibition in Article 102 TFEU is only applicable to the extent that the conduct of the dominant undertaking “may affect trade between Member States.” This is a jurisdictional criterion that establishes whether EU competition law is applicable, as well as demarcating the application of EU competition law from national competition laws of the Member States. The Commission has published Guidelines on the effect on trade concept contained in Articles 101 and 102 TFEU ([2004] OJ C 101/81). First and foremost, Articles 101 and 102 TFEU are only applicable where the effect on trade between Member States is appreciable (Guidelines [13]). Second, the concept of “trade” is not limited to exchange of goods/services but covers all cross-border economic activity, including the establishment of agencies, branches, subsidiaries, etc. in Member States (Guidelines [19, 30]). The concept of “trade” also includes cases where conduct results in a change in the structure of competition on the internal market (Cases 6 and 7/73 Commercial Solvents v EC Commission [1974] ECR 223 [33]; Guidelines [20]).

Regarding the notion of “may affect” trade between Member States, the CJEU has noted that this means that it must be possible to foresee, with a sufficient degree of probability on the basis of a set of objective factors of law or of fact, that the conduct may have an influence, direct or indirect, actual or potential, on pattern of trade between Member States (Guidelines [23]). It should be noted that this is a neutral test; it is not a condition that trade be restricted or reduced (O’Donoghue and Padilla 2013, 864).

Abuse

According to the CJEU, a finding of a dominant position is not in itself a recrimination, but means that irrespective of the reasons for which it has such a position, the dominant undertaking has a “special responsibility” not to allow its conduct to impair genuine undistorted competition on the internal market (Case 322/81 Michelin v EC Commission [1983] ECR 3461 [57]). Although the Court has created this concept of “special responsibility” for dominant undertakings, what exactly it entails – and if it entails anything above the parameters of the prohibition in Article 102 TFEU itself – is debatable. It has been suggested in the literature that dominant undertakings do not have any responsibility over and above complying with Article 102 TFEU itself (Akman 2012, 95).

Article 102 TFEU prohibits the abuse of a dominant position and lists examples of abuse in a non-exhaustive manner (Continental Can [26]). In general, it is considered that abusive conduct can be categorized as: (i) exploitative and (ii) exclusionary. Exploitative abuse relates to the dominant undertaking directly harming its customers (including consumers) as a result of, for example, the reduction in output and the increase in prices that the dominant undertaking can effect due to its market power. It has been defined as the dominant undertaking receiving advantages to the disadvantage of its customers that would not be possible but for its dominance (Akman 2012, 95, 303). In contrast, exclusionary abuse concerns the dominant undertaking’s conduct that harms the competitive position of its competitors, mainly by foreclosing the market. Most of the decisional practice under Article 102 TFEU has concerned exclusionary conduct, despite the fact that the examples listed in Article 102 TFUE are mostly – if not only – concerned with exploitative abuse. Indeed, it has been argued in the literature that Article 102 TFEU itself is merely concerned with exploitation and not exclusion (see Joliet 1970; Akman 2009, 2012). In line with the decisional practice, the Commission’s Guidance on enforcement priorities – the only official document on the application of Article 102 TFEU adopted by the Commission – is limited to exclusionary conduct. It must be noted that the Guidance was published at the end of a long period of debate on the role and application of Article 102 TFEU as the Commission’s enforcement of this provision, as well as the European Courts’ jurisprudence thereon had been criticized by many commentators for not being based on economic effects but on the form of conduct, for failing to fall in line with the Commission’s more modern approach to Article 101 TFEU and merger control, and “for protecting competitors, not competition” (see, e.g., O’Donoghue and Padilla 2013, 67 et seq. for an overview of the reform).

Exploitative Abuses

Unfair Pricing and Unfair Trading Conditions

Article 102(a) TFEU prohibits the imposition of unfair prices or unfair trading conditions. Although the prohibition is one of “unfair” pricing, it has been mostly interpreted as one of excessive pricing. In any case, there have been very few cases prohibiting prices as “excessive” or “unfair” since the prohibition poses many problems, such as the difficulty of defining what an “excessive” or “unfair” price is, the potential adverse effects on innovation and investment the prohibition could lead to, the lack of legal certainty resulting from a lack of a test for “excessive” or “unfair” prices, the inappropriateness of price regulation by competition authorities and courts, etc. As for the interpretation of “unfair pricing” by the CJEU, there is a two-staged test established in United Brands: first, it should be determined whether the price-cost margin is excessive, and if so, it should be determined whether a price has been imposed that is either “unfair in itself” or “when compared to competing products.”

Regarding the abuse of imposing unfair trading conditions, there is similarly limited case law. Examples of unfair trading conditions include imposing obligations on trading partners which are not absolutely necessary and which encroach on the partners’ freedom to exercise its rights, imposing commercial terms that fail to comply with the principle of proportionality, unilateral fixing of contractual terms by the dominant undertaking, etc. (Case 127/73 Belgische Radio on Televisie v SV SABAM [1974] ECR 313; DSD (Case COMP D3/34493) [2001] OJ L166/1; Case 247/86 Alsatel v SA Novasam [1988] ECR 5987 respectively).

Exclusionary Abuses

According to the Guidance paper, the Commission’s enforcement activity in relation to exclusionary conduct aims to ensure that dominant undertakings do not impair effective competition by foreclosing their competitors in an anticompetitive way, thus having an adverse impact on consumer welfare, whether in the form of higher prices than would have otherwise prevailed or in some other form such as limiting quality or reducing consumer choice (Guidance [19]). In turn, “anticompetitive foreclosure” refers to a situation where effective access of actual or potential competitors to supplies or markets is hampered or eliminated as a result of the conduct of the dominant undertaking whereby the dominant undertaking is likely to be in a position to profitably increase prices (or to influence other parameters of competition, such as output, innovation, quality, variety, etc.) to the detriment of consumers (Guidance [19]). It must be noted that the Guidance has not received formal approval from the EU Courts as they have not yet had to deal with a case in which the Commission applied the principles of the Guidance and the EU Courts have not necessarily been keen to revise their case law in order to adopt a more economic effects-based approach. The rest of this section will consider some common types of exclusionary conduct that have been identified as priorities in the Commission’s Guidance paper. It should be noted that the Guidance paper distinguishes between price-based and non-price-based exclusionary conduct. For price-based exclusionary conduct, the test promoted in the Guidance is that of the “as efficient competitor” test, according to which, the Commission will only intervene where the conduct concerned has already been or is capable of hampering competition from competitors which are considered to be as efficient as the dominant undertaking (Guidance [23]). This test was used in some earlier case law already, but it is noteworthy that in the recent appeal of Intel, the General Court has found the test to be a neither necessary nor sufficient test of abuse, at least for the particular conduct in question, namely, rebates (Case T-286/09 Intel Corp v European Commission (not yet published) [143–146]).

Exclusive Dealing

A dominant undertaking may foreclose its competitors by hindering them from selling to customers through use of exclusive purchasing obligations or rebates, which the Commission together refers to as “exclusive dealing” (Guidance [32] et seq.). “Exclusive purchasing” refers to an obligation imposed by the dominant undertaking on a customer to purchase exclusively or to a large extent only from the dominant undertaking (Guidance [33]). According to the CJEU, it is irrelevant whether the request to deal exclusively comes from the customer, and it is also irrelevant whether the exclusivity obligation is stipulated without further qualification or undertaken in return for a rebate (Hoffmann-La Roche [89]).

Regarding rebates granted to customers to reward them for a particular form of purchasing behavior, particularly the European Courts have adopted a very formalistic approach. Specifically, rebates that create “loyalty” to the dominant undertaking are condemned to a degree which some might argue to be a per se prohibition. For example, recently in Intel the General Court held that fidelity/exclusivity rebates are abusive if there is no justification for granting them, and the Commission does not have to analyze the circumstances of the case to establish a potential foreclosure effect (Intel [80–81]). Quantity rebates, namely, rebates which are linked solely to the volume of purchases from the dominant undertaking which reflect the cost savings of supplying at higher levels, are generally deemed not to have foreclosure effects (Intel [75]).

Tying and Bundling

Tying refers to situations where customers that purchase one product (the “tying product”) are required to also purchase another product from the dominant undertaking (the “tied product”) and can be contractual or technical (Guidance [48]). Bundling refers to the ways the dominant undertaking offers and prices its products: pure bundling occurs where products are only sold together in fixed proportions, whereas mixed bundling occurs where products are available separately, but the price of the bundle is lower than the total price when they are sold separately (Guidance [48]). As well as having potential efficiency benefits for customers, tying and bundling can also be used by the dominant undertaking to foreclose the market for the tied product by leveraging its market power in the tying product market to the tied product market. For example, in the case of Microsoft, the tying of Microsoft Media Player to the Windows Operating System was found to be an abuse of Microsoft’s dominant position (Case T-201/04 Microsoft Corp v EC Commission [2007] ECR II-3601).

Predatory Pricing

Predation involves the dominant undertaking selling its products at a price below cost. As such, the dominant undertaking deliberately incurs losses or foregoes profits in the short term, so as to foreclose or be likely to foreclose one or more of its actual or potential competitors, with a view to strengthening or maintaining its market power (Guidance [63]). The obvious difficulty with sanctioning predation is that an erroneous condemnation would imply the prohibition of low prices, and price competition leading to low prices is clearly part of legitimate competition. In AKZO the CJEU decided that prices below average variable costs (costs that vary according to the quantity produced) by means of which a dominant undertaking seeks to eliminate a competitor must be regarded as abusive since a dominant undertaking has no interest in applying such prices except that of eliminating competitors so as to enable it subsequently to raise its prices by taking advantage of its monopolistic position, since each sale generates a loss (AKZO [71]). As for prices between average variable costs and average total costs (variable costs plus fixed costs), the Court held that such prices will be held abusive if they are part of a plan for eliminating a competitor (AKZO [72]). In its Guidance, the Commission uses average avoidable cost instead of average variable cost ([64] et seq.). It is not necessary to prove that the dominant undertaking can possibly recoup its losses for predation to be abusive (see, e.g., Case C-202/07 P France Télékom v Commission [2009] ECR I-2369 [110]).

Refusal to Supply and Margin Squeeze

Despite the fact that generally any undertaking, dominant or not, should have the right to choose its trading partners and to dispose freely of its property, there are occasions on which a dominant undertaking can abuse its position by refusing to deal with a certain trading partner (Guidance [75]). Such a finding entails the imposition of an obligation to supply on the dominant undertaking, and the Commission acknowledges that such obligations may undermine undertakings’ incentives to invest and innovate and, thereby, possibly harm consumers (Guidance [75]). According to the Commission, typically competition problems arise when the dominant undertaking competes on the downstream market with the buyer whom it refuses to supply (Guidance [76]). The downstream market refers to the market for which the refused input is needed in order to manufacture a product or provide a service (Guidance [76]). It is irrelevant whether the customer to whom supply is refused is an existing customer or a new customer, but it is more likely that the termination of an existing relationship will be found to be abusive than a de novo refusal to supply (Guidance [79], [84]). Instead of refusing to supply, a dominant undertaking may engage in “margin squeeze”: it may charge a price for the product on the upstream market which, compared to the price it charges on the downstream market, does not allow an equally efficient competitor to trade profitably in the downstream market on a lasting basis (Guidance [80]).

For refusal to supply and margin squeeze to constitute abuse, it must be the case that the refusal relates to a product or service that is objectively necessary (“indispensable”) to be able to compete effectively on the downstream market, is likely to lead to elimination of effective competition on the downstream market, and is not objectively justified (Whish and Bailey 2012, 699). A particularly controversial application of this doctrine is the area of intellectual rights where a finding of abuse implies that these rights may be made subject to compulsory licensing. For example, in Microsoft, abuse was found in Microsoft’s refusal to provide interoperability information to its competitors which would enable them to develop and distribute products that would compete with Microsoft on the market for servers. According to the General Court, Microsoft’s conduct limited technical development under Article 102(b) TFEU (Microsoft [647]).

Objective Justification

Article 102 TFEU does not contain an exemption or exception clause like that found in Article 101(3) TFEU, which would “save” otherwise abusive conduct from breaching Article 102 TFEU due to any procompetitive gains the conduct might produce. However, the decisional practice and the case law have developed the concept of “objective justification” as a defense on the part of the dominant undertaking. The dominant undertaking may demonstrate that its conduct is objectively necessary or that the anticompetitive effect produced by the conduct is counterbalanced or outweighed by advantages in terms of efficiencies that also benefit consumers (Case C-209/10 Post Danmark A/S v Konkurrenceradet, not yet reported [41]; Guidance [28–31]). According to some commentators, the defense of objective justification is somewhat a tautology (O’Donoghue and Padilla 2013, 283). This is because, as noted by Advocate General Jacobs in Syfait, the very fact that conduct is characterized as abusive suggests that a negative conclusion has already been reached, and therefore, a more accurate conception would be to accept that certain types of conduct do not fall within the category of abuse at all (Case C-53/03 Syfait and others v GlaxoSmithKline plc and another [2005] ECR I-4609 [53]).