European Competition Law - Essay Example

d in which the conditions of competition are sufficiently homogeneous”. (Europa, 2007) The SSNIP test (Small but Significant and Non-transitory Increase in Price) is an important criterion in relation to abuse of dominance and mergers. The commission formally adopted SSNIP in 1997 EU Commission Notice on Market Definition. Camesasca et al state that the notice refers to theoretical insights gained in industrial economics and mentions a range of econometric techniques helpful in delineating the relevant market.

  Therefore, primarily it is important to decide whether the undertaking is dominant or not. The question of dominance hinges on several factors and the interpretation of the facts available under the specific circumstances. It was held in United Brands Company and United Brands Continental BV v Commission of the European Communities, “The dominant position referred to in Article 86 relates to a position of economic strength enjoyed by an undertaking which enables to prevent effective competition…In general a dominant position derives from a combination of several factors, which taken separately, are not necessarily determinative” (Eur-Lex, 1978), and thus it connotes wide meaning and interpretation.

Vatiero states that “In competition law the dominant position is accepted, that is, an undertaking having a dominant position is not itself a recrimination”. The policy underlining the law is with reference to the power to behave independent of its competitors to an appreciable extent. For instance, an undertaking cannot stop supplying a long standing customer under some pretext or other as this conduct is inconsistent with Article 3(F) of the treaty and paragraph B and C of Article 86 with in respect prejudicial or discriminatory treatment.

Chamberlin (1962, p.61) states that both patents and trade-marks may be conceived of as monopoly elements of the goods to which they are attached. It is also necessary to consider the shift in policy towards conflicting interests arising out of the rights over patents or trade-marks and competition. Entry barriers constitute as major stumbling block in promoting competition, which may result into monopoly. Papasava (2004) states, “The Chicago school perceives…that a true barrier to entry is a cost to new entrants which was not applicable to the existing market operators when they entered the market” The monopoly with reference to the pricing depends upon the elasticity of the demand for the product as well as the substitutes available.

“ … Monopoly may not equate to an economic monopoly if the relevant market is wider than the protected market. However, the fact that access to a market is protected by intellectual property rights may be relevant as a factor