European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

Applying Article 102 TFEU assumes the existence of a dominant position and the abuse thereof. The existence of an intellectual property right alone is not sufficient to confer a dominant position on its owner , let alone constitute an abuse .

By contrast, the exercise of an intellectual property right may give rise to abuse due to the exclusive right it grants . Thus, an undertaking which engages in “patent ambush” and claims abusive royalties for the use of its patents , adopts conduct contrary to Article 102 . This is also true where the undertaking in a dominant position obtains an exclusive right to which it is not entitled, or to which it is entitled for a shorter period by means of conduct liable to mislead the public authorities . Exploiting copyrights seems particularly conducive to abuse of dominant position. Thus, the fact that an undertaking in charge of exploiting copyrights imposes on its members commitments that are not indispensable to the achievement of its corporate purpose , or on composers to execute a general assignment of all categories of rights throughout the entire world  or scales of fees which are appreciably higher than those charged in other Member States  characterizes an abuse. According to the Court of Justice , in order to examine whether a copyright management organization applies unfair prices, it is appropriate to compare its rates with those applicable in neighboring States as well as with those applicable in other Member States adjusted in accordance with the power parity (PPP) index, provided that the reference Member States have been selected in accordance with objective, appropriate and verifiable criteria and that the comparisons are made on a consistent basis. It is permissible to compare the rates charged in one or several specific user segments if there are indications that the excessive nature of the fees affects those segments; a significant and persistent difference between the rates compared is indicative of abuse of a dominant position and it is for the copyright management organization holding a dominant position to show that its prices are fair by reference to objective factors that have an impact on management expenses or the remuneration of rightholders; the difference between the rates compared must be regarded as appreciable if that difference is significant and persistent. An undertaking in a dominant position holding copyrights that refuses access to the market may also be regarded as abusive. Such is the case of the refusal to enter into management agreements with artists who are nationals of another Member State  or granting licenses to secure a monopoly in a derivative market and preventing the emergence of a new product .

Independently of abuses committed by intermediaries (e.g. collective management societies), the exercise of an exclusive right by the proprietor may in exceptional circumstances involve abusive conduct . This is the case where the exercise of an IP right exceeds what is necessary to fulfill the essential function of the right . In the Magill case, seemingly sacrificing copyright to the requirements of competition law, the General Court , with the approval of the Court of Justice , ruled that by reserving the exclusive right to publish the weekly copyright-protected program schedules, a television company abuses its dominant position. In fact, it was not the exercise of the intellectual property right that was simply identified as an abuse of dominant position but the conduct of the dominant undertaking which was considered abusive as it prevented a new product from entering the market and excluded all potential competition on a secondary market . Those limits were then subsequently clarified in the Ladbroke ruling  which laid down the principle according to which “refusal to supply the applicant could not fall within the prohibition laid down by Article [101 TFEU] unless it concerned a product or service which was either essential for the exercise of the activity in question, in that there was no real or potential substitute, or was a new product whose introduction might be prevented, despite specific, constant and regular potential demand on the part of consumers”. Lastly, in the IMS ruling , the Court of Justice clearly listed the requirements for the classification of an abuse of dominant position. Thus, the refusal to grant a licence for the use of a product or service indispensable in order to carry on a particular business is an abuse of a dominant position where three conditions are fulfilled:  

-  the undertaking which requested the licence intends to offer, on the relevant market, new goods or services not offered by the owner of the right and for which there is a potential consumer demand;

- the refusal of the request for a licence is justified by objective considerations, and;

- the refusal is such as to reserve to the copyright owner the market for the supply of the data in the Member State concerned by eliminating all competition on that market.

See Case 24/67 Parke, Davis & Co. v Probel and others [1968] ECR 81, LawLex200500005415JBJ, for a patent; Case 86/75 EMI Records v CBS Grammofon [1976] ECR 871, LawLex200400002898JBJ, for a trade mark right; Case 238/87 Volvo v Veng [1988] ECR 6211, LawLex200400002941JBJ, for protected designs and models.

Case 102/77 Hoffman-La Roche v Centrafarm [1978] ECR 1139, LawLex200400002972JBJ.

Case 7/82 GVL v Commission [1983] ECR 483, LawLex200400002960JBJ.

Case T-69/89 RTE v Commission [1991] ECR II-485, LawLex200400002913JBJ and Case T-76/89 ITP v Commission [1991] ECR II-575, LawLex200400002914JBJ; Cases C-241/91 P and C-242/91 P RTE and ITP v Commission [1995] ECR I-743, LawLex200400002891JBJ.

Case C-241/91 P RTE [1995] ECR I-743, LawLex200400002891JBJ.

Case T-69/89 RTE v Commission, cited above.

Case T-76/89  ITP v Commission [1991] ECR p. II-575, LawLex200400002914JBJ.

In this case, we can ask whether there was a situation of "misappropriation" of copyright and if the protected work actually merited protection.

Case T-504/93 Tiercé Ladbroke SA [1997] ECR p. II-923, LawLex200400002919JBJ.

Case C-418/01 IMS Health GmbH & Co. OHG [2004] ECR p. I-5039, LawLex200500004507JBJ.

On the monopoly granted by the exclusive management of copyrights, see Commission Decision No 71/224/EC of 2 June 1971, GEMA (not available in English).

On the other hand, an undertaking which holds a patent which is essential to a standard established by a standardization body to which it has given an undertaking to grant licences under "fair, reasonable and non-discriminatory" conditions (FRAND) does not abuse its dominant position by bringing an action for infringement of its patent and seeking the rendering of accounts in relation to past acts of use of that patent or an award of damages in respect of those acts, Case C-170/13 Huawei Technologies Co. Ltd., Judgment of 16 July 2015, LawLex201500000955JBJ.

Commission Decision No 38/636/EC of 9 December 2009, Rambus, LawLex201000000664JBJ.

Case T-321/05 AstraZeneca AB [2010] ECR II-2805, LawLex201000001311JBJ.

Case 127/73 BRT v SABAM [1974] ECR 51, LawLex200400002886JBJ; see CJEU Case C-372/19, Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Weareone.World BVBA et Wecandance NV,  Judgment of 25 November 2020, not available in English: the application of a remuneration model that takes into account the quantity of musical works actually performed may nevertheless be abusive when another method exists which enables the use of those works and the audience to be identified and quantified more precisely and that method is capable of achieving the same legitimate aim, which is the protection of the interests of composers and music editors, without however leading to a disproportionate increase in the costs incurred for the management of the contracts and the supervision of the use of musical works protected by copyright.

Case 22/79 Greenwich Film v SACEM [1979] ECR 3275, LawLex200400002969JBJ.

Cases 110/88; 241/88; 242/88 Lucazeau and others v SACEM and others [1989] ECR 2811, LawLex200400002936JBJ and Case 395/87 Criminal proceedings against Tournier [1989] ECR 2521, LawLex200400002927JBJ.

Case C-177/16 Autortiesibu un komunicešanas konsultaciju agentura / Latvijas Autoru apvieniba, Judgment of 14 September 2017, LawLex201800000344JBJ.

165. Conditions for prohibition