European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Injury to the Union industry depends on the effect of imports on prices, which is assessed with respect to a comparison between the prices of imported products and the prices of European like products . The Commission must seek whether dumped imports have led to significant price undercutting as compared to the price of a European like product, caused prices to depress or prevented price increases …

Effects of imports on prices

Injury to the Union industry depends on the effect of imports on prices, which is assessed with respect to a comparison between the prices of imported products and the prices of European like products . The Commission must seek whether dumped imports have led to significant price undercutting as compared to the price of a European like product, caused prices to depress or prevented price increases (Regulation No 2016/1036, Article 3(3)) . 

The undercutting margin is distinguished from the dumping margin which results from a comparison between the export price and the price on the domestic market of the exporting country concerned. The undercutting calculation must result in a reasonable volume of sales being covered for both the exporting producers and the Union industry, while taking into account the main factors that influence prices. The undercutting determination consists in comparing a larger number of products sold by a larger number of parties, whilst the dumping margin is calculated from categories of products which result in the most part of a comparison between the various products offered by a specific company .

The traditional method when calculating price undercutting consists in comparing the exporting producer's sales prices charged to the first independent customers in the market of the Union with those of the Union industry, net of all types of rebates or discounts . Account is taken of the various costs incurred between import and the time when the customers effectively receive the products. The products are purchased at the FOB price , then converted into the CIF price , on the basis of information supplied by importers having cooperated. To set an ex-importer warehouse price, the CIF price is adjusted by a margin reflecting the selling and financing costs incurred by European importers: unloading, inspection, screening, degradation, etc . Export prices are not compared to their actual level but to the level they would have reached in the absence of dumping, where the prices of the Union industry had previously suffered a downward effect on prices for a long period which resulted in their decrease . A hypothetical turnover, obtained by multiplying the average price per category of the Union industry by the tonnage of the comparable imported categories may be the basis of calculation of a weighted undercutting margin to appropriately take into account both the quantity imported and the amplitude of price variation between different categories of European like product .

The comparison must relate on like products, i.e. types of comparable products, in similar conditions of sales on the domestic market, in the same Member State, to the same customers  or at the same level of trade . Where certain types of products are sold in certain Member States by the exporting producer and not by the Union producer, or vice versa, sales prices of the various types of products may be compared by Member State and on a customer-by-customer basis . Where there is a large diversity of products, a combination of calculation methods is used to establish an undercutting average margin. A first comparison may be made on a category-by-category basis between import prices and selling prices in the Union of Union producers at the same level of trade. A second undercutting exercise is carried out by comparing models exported to the Union in the greatest volumes, including dumping calculation samples, with identical or comparable models produced by the Union producers in the verification sample .

Where differences affect price comparability an adjustment may be made. Differences in product quality may thus justify a distinct comparison of the various types of products . Objective technical differences are, however, insufficient to justify an adjustment. These differences must be perceived by users  and affect the use of the product . Account may also be taken of the safety of supplies, customer service or cost of packing  or differences in materials used at the production stage where they result in objective market value differences . Where the products conform to international standards, the existing differences between the imported products and the European like products do not justify an adjustment .

The comparison must be carried out at the same level of trade and may therefore require adjustment to be made in order to arrive at this level. Post-importation costs, such as handling, financing and transport costs, repackaging costs and customs duty payable  or selling and financing costs incurred by importers, and the profit margin achieved on the basis of the weighted average profitability reported by those importers during the investigation period , may be taken into consideration. Where the exporting producers mainly sell to wholesalers and the Union industry sells to end users, an adjustment to user price is also justified in order, in particular, to take discounts granted into account .

Only factors which affect comparability justify an adjustment. This is not the case for different lead times between order and delivery and different price-setting mechanisms  or differences in product branding . Where only the exporting producer is able to supply large industrial users, and thus to obtain higher prices for this part of European consumption, the determination of undercutting must be limited to this part of the market for which competition exists with the Union industry . 

Undercutting must be significant. This is not the case where it mainly concerns non-homogeneous products with a great variety of features and technical differences and subject to rapid technological development  or where the prices of imported products which are an average of 6% lower than those of the Union industry only cover a limited volume of imports .

2) Depression of prices/freezing of price increases

The Commission must consider whether “the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree” (Regulation No 2016/1036, Article 3(3)). This second assessment factor enables a calculation of the effects of dumping in the absence of significant undercutting. The rather low price undercutting margins must, however, be seen in the light of the significant price depression suffered by the Union industry in the investigation period, as evidenced by the losses incurred . Even if they are not lower, import prices may cause injury to the Union industry where a price suppression , a strong price depression with a view to recorded losses , or the decreasing profitability of the Union industry  result from dumping. Downward pressure may result from pricing behavior of exporters -loss-making prices or undercut offers - which forces Union producers to match the prices of the dumped products to try and keep their market share . 

A cumulative assessment of imports may be made where products from more than one third country are simultaneously subject to anti-dumping investigation (Regulation No 2016/1036, Article 3(4)). This overall assessment allows the European authority to take appropriate measures with respect to all exporters, even if the volume of each individual exporter's exports is relatively small , provided, however, that it is above the de minimis threshold. Imports are regarded as negligible where they represent a market share of below 1%, unless such countries collectively account for 3% or more of European consumption (Regulation No 2016/1036, Article 9(3) which refers to Article 5(7)). Where the levels of the undercutting margin are not in the range depending on the countries concerned, the cumulative assessment is possible only if the margin of dumping of each country exceeds the 2% de minimis level .

According to the anti-dumping regulation (Art. 3(8)), "The effect of the dumped imports shall be assessed in relation to the production of the Union industry of the like product when available data permit the separate identification of that production on the basis of such criteria as the production process, producers' sales and profits. If such separate identification of that production is not possible, the effects of the dumped imports shall be assessed by examination of the production of the narrowest group or range of products, which includes the like product for which the necessary information can be provided".

Case T-383/17 Hansol Paper Co. Ltd, Judgment of 2 April 2020, LawLex202000001666JBJ, restating that it is not sufficient that the imported goods are dumped, as it is also necessary that their release for free circulation should cause injury. It is precisely for determining whether there has been injury, that an objective examination of the effect that imports have on the prices of like products on the Union market must be made and that, to that end, consideration is to be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product, or whether the effect of such imports is otherwise to depress prices to a significant degree or to prevent price increases, which would otherwise have occurred, to a significant degree.

Commission Regulation (EC) No 2479/2001 of 17 December 2001, imports of recordable compact disks (Taiwan), LawLex200900002827JBJ.

Council Regulation (EU) No 1965/98 of 9 September 1998, imports of polysulphide polymers (United States of America), LawLex200900002483JBJ.

Council Regulation (EU) No 467/98 of 22 May 1998, imports of certain footwear with uppers of leather or plastics (China, Indonesia, Thailand), LawLex200900002465JBJ.

See, inter alia, as regards undercutting of prices recalculated by taking account of the tensile strength of certain cables as tensile strength influences the price: Council Regulation (EU) No 1601/2001 of 2 August 2001, imports of certain iron or steel ropes and cables (the Czech Republic, Russia, Thailand, Turkey), LawLex200900002610JBJ; See, as regards objective market value difference found depending on the raw material used: Council Regulation (EU) No 2080/2001 of 23 October 2001, imports of internal gear hubs for bicycles (Japan), LawLex200900002607JBJ.

See Commission Regulation (EC) No 1103/93 of 30 April 1993, imports into the Community of certain electronic weighing scales (Singapore, Korea), LawLex200900002729JBJ; Case T-121/95 EFMA v Council [1997] ECR II-87, LawLex200900001898JBJ.

Commission Decision No 283/2000 of 4 February 2000, imports of certain flat rolled products of iron or non-alloy steel (Bulgaria, India, South Africa, Taiwan, Yugoslavia, Iran), LawLex200900002909JBJ.

Council Regulation (EU) No 2022/95 of 16 August 1995, imports of ammonium nitrate (Russia), LawLex200900002393JBJ.

Council Regulation (EU) No 2080/2001 of 23 October 2001, imports of internal gear hubs for bicycles (Japan), LawLex200900002607JBJ.

Commission Decision No 1758/2000 of 9 August 2000, imports of certain hot-rolled flat products of non-alloy steel (China, India, Rumania), LawLex200900002848JBJ.

Commission Regulation (EC) No 1732/97 of 4 September 1997, imports of stainless steel fasteners and parts (China, India, Malaysia, Korea, Taiwan and Thailand), LawLex200900002808JBJ; Council Regulation (EU) No 2155/97 of 29 October 1997, imports of certain footwear with textile uppers (China, Indonesia), LawLex200900002456JBJ; Commission Regulation (EC) No 1084/98 of 28 May 1998, imports of stainless steel bars (India), LawLex201100000510JBJ.

Council Regulation (EU) No 1796/1999 of 12 August 1999, on imports of steel ropes and cables (China, Hungary, India, Mexico, Poland, South Africa, Ukraine, Korea), LawLex200900002509JBJ.

Commission Decision No 2730/2000 of 14 December 2000, imports of coke of coal (China), LawLex200900002847JBJ.

Commission Regulation (EC) No 1084/98 of 28 May 1998, imports of stainless steel bars (India), LawLex201100000510JBJ; Council Regulation (EU) No 1522/2000 of 10 July 2000, imports of synthetic staple fibres of polyester (Australia, Indonesia, Thailand), LawLex200900002567JBJ; Commission Decision No 1238/2000 of 14 June 2000, imports of coke of coal (China), LawLex200900002869JBJ.

Commission Regulation (EC) No 1084/98 of 28 May 1998, imports of stainless steel bars (India), LawLex201100000510JBJ.

Council Regulation (EU) No 1050/2002 of 13 June 2002, imports of recordable compact disks (Taiwan), LawLex200900002510JBJ.

Commission Decision No 1999/55 of 21 December 1998, imports of certain laser optical reading systems (Japan, Korea, Malaysia, China, Taiwan), LawLex201100000520JBJ.

Commission Decision No 90/507 of 7 September 1990, imports of dense sodium carbonate originating in the United States of America, LawLex201100000575JBJ.

Council Regulation (EU) No 950/2001 of 14 May 2001, imports of certain aluminum foil (China, Russia), LawLex200900002608JBJ.

Commission Regulation (EC) No 1092/97 of 16 June 1997, imports of advertising matches (Japan), LawLex200900002803JBJ, price increase in Europe, by 4% as compared to 40% for exporters' prices; No 1251/2003 of 14 July 2003, imports of hollow sections (Turkey), LawLex200900002651JBJ.

Commission Regulation (EC) No 1662/2002 of 18 September 2002, imports of certain filament yarns of cellulose acetate (United States of America, Lithuania), LawLex200900002770JBJ; No 1235/2003 of 10 July 2003, imports of silicon (Russia), LawLex200900002652JBJ.

Commission Regulation (EC) No 1092/97 of 16 June 1997, imports of advertising matches (Japan), LawLex200900002803JBJ; No 1251/2003 of 14 July 2003, imports of hollow sections (Turkey), LawLex200900002651JBJ.

Commission Regulation (EC) No 1742/2000 of 4 August 2000, imports of certain polyethylene terephthalate (India, Indonesia, Malaysia, Korea, Taiwan, Thailand), LawLex200900002850JBJ; Council Regulation (EU) No 2263/2000 of 9 October 2000, imports of black colorformers (Japan), LawLex200900002583JBJ.

Case 294/86 Technointorg v Commission and Council [1988] ECR 6077, LawLex200900002333JBJ.

Council Regulation (EU) No 132/2001 of 22 January 2001, imports of ammonium nitrate (Poland, Ukraine, Lithuania), LawLex200900002603JBJ.

FOB: Free On Board, i.e. without the costs of transport, insurance and other related costs and taxes.

See, for example, Commission Decision No 1238/2000 of 14 June 2000, imports of coke of coal (China), LawLex200900002869JBJ; See also Commission Regulation (EC) No 1732/97 of 4 September 1997, imports of stainless steel fasteners and parts (China, India, Malaysia, Korea, Taiwan and Thailand), LawLex200900002808JBJ, in which credit and repacking costs are taken into account.

Case 277/85 Canon v Council [1988] ECR 5731, LawLex200900002332JBJ.

European Business Law

421. Effects of imports on prices

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421. Effects of imports on prices

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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