In France Télécom v Commission (Case C-202/07 P, judgment of 2 April 2007), the ECJ disagreed with the Advocate General and agreed with my earlier blog posting (I am under no illusion that the ECJ is aware of my blog) that recoupment is not a pre requisite for a finding of price predation. There are three salient points in this judgment.
1. Objective evidence of a plan to eliminate competition
The Court confirms that you can use an undertaking's internal documents to furnish evidence of a predatory strategy. Wrong, I think.
2. A restatement of Article 82 principles
Paragraphs 103-114 are at the heart of the issue under appeal and also offer a restatement of the ECJ's approach to Article 82. I leave it to others to reflect on how much the ECJ's view tallies with that in the Commission's Guidance Paper.
3. Recoupment
The basic reason why recoupment isn't needed is that the aim of Article 82 is to protect a competitive market structure. Thus harm to the competitive process, not harm to consumer welfare is the factor that motivates Article 82, contrary to the views of the Advocate General.
Unfortunately the Court also inserted paragraph 111 which says that the Commission may find a reason to use proof of likely recoupment in certain cases: (a) when pricing is below AVC and the defendant advances an objective justifictaion, the likelihood of recoupment may be used to deny the defence (highly unlikely); (b) when prices are below ATC and above AVC then proof of recoupment can serve to show that there is eliminatory intent. (This I think is wrong because it does not sit well with the principle that you want to protect the competitive process. Though you might argue that if one is keen to punish predation when it threatens the competitive process, any proof of a 'plan' to damage competition is unnecessary because it is a poor proxy.
21 April 2009
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9 comments:
I think it is great article on the very important topic like this.One thing is inspire me that you have explain the three main silent points,Such as A restatement,I think it is called some times Recoupment is the practice.
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