Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

German law, like EU law, does not seek to challenge the mere existence of a dominant position; rather, it prohibits the abuse of this position (Section 19 GWB). The prohibition is automatic and does not require a decision of the Federal Cartel Office (FCO) to bring it into effect.
The law sets out a definition of dominance: an undertaking is considered dominant if it has no competitors, is not exp …

Abuse of a dominant position

German law, like EU law, does not seek to challenge the mere existence of a dominant position; rather, it prohibits the abuse of this position (Section 19 GWB). The prohibition is automatic and does not require a decision of the Federal Cartel Office (FCO) to bring it into effect.

The law sets out a definition of dominance: an undertaking is considered dominant if it has no competitors, is not exposed to any substantial competition or has an extremely strong market position compared to its competitors (Section 18(1)). The 9th amendment to the GWB of March 2017 introduces the possibility of monitoring dominance on certain two-sided or multi-sided markets such as social media or search engines, by stating that a market exists even where a service is provided free of charge. 

Section 18(3) GWB provides criteria by which dominance may be assessed: market share, financial power, access to supplies or markets, links with other undertakings, or the ability to shift supplies or demand to other goods. Under the new provisions of the 9th amendment, the FCO will be able to assess market power in digital markets in the light of new criteria such as network effects, economies of scale, access to sensitive information etc.

A dominant position may be held by one undertaking, or collectively by a number of undertakings, insofar as no substantial competition exists between them with respect to certain kinds of goods or commercial services and they jointly satisfy the conditions of Section 18(1) GWB.

A dominant position may be presumed under Section 18(4) and Section 18(6) GWB by reference to the market share of an undertaking. These Sections, as amended by the 8th Amendment to the GWB of June 2013, provides that a market share of 40% (33% previously) is considered a dominant position for one undertaking, of 50 percent for three or fewer undertakings, or a combined share of two thirds for five or fewer undertakings.

Section 19(2) provides five examples of abuse of a dominant position. Abuse occurs when the dominant undertaking:

- interferes with the ability of another undertaking to compete in a manner affecting competition in the market without objective justification; 

- imposes payment or other business terms which differ from those that would very likely arise if effective competition existed. This is a form of price cap regulation. To prove that a price is excessive, one has to compare it with that of a “comparable market”. However, this requirement has made it impossible to prove that a price is excessive because the courts consider price comparisons invalid;

- imposes less favorable payment or other business terms compared to those of similar purchasers in comparable markets, unless there is an objective justification;

- refuses to allow another undertaking access to its own network or other infrastructure facilities in exchange for adequate remuneration. The reason of the introduction of the essential facilities doctrine was to improve competition, particularly in the German telecommunications and energy markets. However, the essential facilities doctrine is not considered to apply “if the dominant undertaking demonstrates that for operational or other reasons such (...) use is impossible or cannot reasonably be expected”;

- uses its market position to invite or cause other undertakings to grant it advantages without any objective justification.

Finally, Sections 20(1) to 20(5) GWB prohibit market dominating undertakings from using their dominant position to directly or indirectly hinder another undertaking in an unfair manner. 

 Section 20 GWB prohibits an undertaking in a dominant position, legal cartels or undertakings which set retail prices from directly or indirectly hindering in an unfair or discriminatory manner another undertaking where such treatment cannot be objectively justified. The prohibition also applies to those undertakings upon which SMEs are in a position of dependency as regards the supply of goods or services.

A dependent undertaking is one that does not have the possibility of resorting to other undertakings to perform its economic activity. In defining whether a state of dependency exists, the authorities first attempt to define the relevant market in order to consider whether within this market there are other undertakings to which the SMEs in question can turn. Dependency frequently arises where a distributor must have access to a particular brand or product if the distributor is to viably remain in the market in question (sortimentsbedingte Abhängigkeit). For instance, denial of access to data on which an undertaking relies may constitute an unreasonable hindrance within the meaning of Section 20 GWB. It can also arise in industries such as the manufacturing of motor vehicles, including cases where a supplier adapts its production process to the specific needs of one manufacturer (unternehmensbedingte Abhängigkeit). This occurs, for example, where a supplier concentrates its efforts on making one sole part for an automobile manufacturer.

Global Competition Law

307. Abuse of a dominant position

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Les notions juridiques connexes

307. Abuse of a dominant position

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise