The treatment of dominant undertakings under EU competition law: time for a new approach?

Article 102 of the Treaty on the Functioning of the European Union (“TFEU”) prohibits abuse of a dominant position by undertakings. It is clear therefore that Article 102 TFEU restricts the conduct of dominant undertakings. Although less evident, Article 101 TFEU, which prohibits anti-competitive agreements, also restricts the conduct of dominant undertakings. In fact, dominant undertakings famously have a ‘special responsibility’ not to distort competition on the market. It is the argument of this thesis that the way in which the competition rules, in particular Article 102 TFEU, are now applied takes this special responsibility too far. The form-based approach evident in most Article 102 TFEU cases effectively means that dominant undertakings cannot contemplate entering into exclusive dealing arrangements, granting loyalty rebates or refusing supplies to existing customers. Although more rigorous testing is required by the existing case law, refusing supplies to new customers and squeezing competitors’ margins is also generally prohibited. There is already some literature on how this impacts markets and dominant undertakings generally. However, there is next to no literature on how this impacts small jurisdictions and dominant undertakings in small jurisdictions. This thesis therefore builds upon the existing literature on the impact of the current application of the competition rules on markets and dominant undertakings but specifically considers the case of small jurisdictions. One of the smallest Member States of the European Union, Malta, is used as a case study to analyse how the application of EU competition law affects small jurisdictions. This thesis considers both the definition of dominance and its assessment (Part I) as well as the application of the law to four ‘types’ of conduct common in small jurisdictions (Part II), in order to determine whether it is now time for a new approach to the treatment of dominant undertakings under EU competition law, particularly in small jurisdictions. The thesis concludes that a new approach is indeed necessary and proposes how it might be achieved, primarily through an effects-based approach to EU competition law