Judgment of 12 May 2022, Servizio Elettrico Nazionale and Others, C‑377-20, EU:C:2022:379 (Servizio or ENEL) CURIA LINK
Key takeaways
Q. What's the objective of the EU's competition rules?
A. It's to protect competitive process, rather than consumer welfare (stricto sensu), albeit being subject to efficiency considerations.
... 47 Therefore, a competition authority discharges its burden of proof if it shows that a practice of an undertaking in a dominant position could impair, by using resources or means other than those governing normal competition, an effective competition structure, without it being necessary for that authority to prove that that practice may also cause direct harm to consumers. The dominant undertaking concerned may nevertheless escape the prohibition laid down in Article 102 TFEU by showing that the exclusionary effect that could result from the practice at issue is counterbalanced or even outweighed by positive effects for consumers. ...
Q. Is Intel's doctrine applicable to all exclusionary practices or limited to royalty rebates?
A. In the light of the (procedural) right to be heard, a general principle, the doctrine applies to every exclusionary conduct.
...51 Consequently, where a dominant undertaking submits, during the administrative procedure and with supporting evidence, that its conduct was not capable of restricting competition, the competition authority concerned is required to examine whether, in the particular circumstances, the conduct in question was indeed capable of doing so (see, to that effect, judgment of 6 September 2017, Intel v Commission, C‑413/14 P, EU:C:2017:632, paragraphs 138 and 140).
52 In those circumstances, in accordance with the right to be heard, which, according to a consistent body of case-law, is a general principle of EU law which applies where the authorities are minded to adopt a measure which will adversely affect an individual, competition authorities have, inter alia, the obligation to hear the undertaking concerned, which means that they must pay due attention to the observations thus submitted by that undertaking, examining carefully and impartially all the relevant aspects of the individual case, and, in particular, the evidence submitted by that undertaking (see, by analogy, judgment of 16 October 2019, Glencore Agriculture Hungary, C‑189/18, EU:C:2019:861, paragraphs 39 to 42). ...
Q. Should competition authorities show actual effects, in addition to the capability of restricting competition, to establish a breach of 102 TFEU?
A. No. Proving the capability is enough to establish abuse. It is only true that the capability "may" be (not necessarily) found to not exist when the undertaking concerned presents counter-evidence showing the absence of actual effects of conduct. That is, the absence or presence of actual effects can be regarded only as a factor.
... 53 That being said, it must be borne in mind that the characterisation of a practice of a dominant undertaking as abusive does not mean that it is necessary to show that the result of a practice of such an undertaking, intended to drive its competitors from the market concerned, has been achieved and, accordingly, to prove an actual exclusionary effect on the market. The purpose of Article 102 TFEU is to penalise abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it, irrespective of whether such practice has proved successful (see, to that effect, judgment of 30 January 2020, České dráhy v Commission, C‑538/18 P and C‑539/18 P, not published, EU:C:2020:53, paragraph 70 and the case-law cited). ...
... 55 Therefore, the evidence produced by an undertaking in a dominant position attesting to the lack of actual exclusionary effects cannot be regarded as sufficient of itself to preclude the application of Article 102 TFEU.
56 By contrast, that fact may constitute evidence that the conduct in question was not capable of producing the alleged exclusionary effects. That evidence must, however, be supplemented, by the undertaking concerned, by items of evidence intended to show that that absence of actual effects was indeed the consequence of the fact that that conduct was unable to produce such effects. ...
57 It follows that, in the present case, the fact (on which the companies concerned rely in order to dispute the existence of abuse of a dominant position) that EE obtained, by means of the use of the SEN lists, just 478 clients, that is to say, 0.002% of the customers in the protected market, cannot be regarded as sufficient of itself to show that the practice in question was not capable of producing an exclusionary effect.
Q. How to find the departure from competition on the merits?
A. No economic interest; In the case of pricing practices - AEC test; In the case of non-pricing practices - irreparability test
...75 Consequently, although undertakings in a dominant position can defend themselves against their competitors, they must do so by using means which come within the scope of ‘normal’ competition, that is to say, competition on the merits.
...77 Any practice the implementation of which holds no economic interest for a dominant undertaking, except that of eliminating competitors so as to enable it subsequently to raise its prices by taking advantage of its monopolistic position, must be regarded as a means other than those which come within the scope of competition on the merits (see, to that effect, judgment of 3 July 1991, AKZO v Commission, C‑62/86,EU:C:1991:286, paragraph 71).
78 The same applies, as observed by the Advocate General in points 69 to 71 of his Opinion, to a practice that a hypothetical competitor – which, although it is as efficient, does not occupy a dominant position on the market in question – is unable to adopt, because that practice relies on the use of resources or means inherent to the holding of such a position.
79 The relevance of the material or rational impossibility for a hypothetical competitor, which is as efficient but not in a dominant position, to imitate the practice in question, in order to determine whether that practice is based on means that come within the scope of competition on the merits, is clear from the case-law on practices both related and unrelated to prices.
80 Regarding the first of these two categories of practices, which includes loyalty rebates, low-pricing practices in the form of selective or predatory prices and margin-squeezing practices, it is clear from the case-law that those practices must be assessed, as a general rule, using the ‘as-efficient competitor’ test, which seeks specifically to assess whether such a competitor, considered in abstracto, is capable of reproducing the conduct of the undertaking in a dominant position (see, inter alia, judgment of 17 February2011, TeliaSonera, C‑52/09, EU:C:2011:83, paragraphs 41 to 43).
...83 Regarding the second category of practices referred to in paragraph 79 of the present judgment, namely practices not related to pricing, such as refusal to supply goods or services, the Court has emphasised that the choice of an undertaking in a dominant position to reserve to itself its own distribution network does not constitute refusal to supply contrary to Article 102 TFEU where, specifically, it is possible for a competitor to create a similar network for the distribution of its own goods (see, to that effect, judgment of 26 November 1998, Bronner, C‑7/97, EU:C:1998:569, paragraphs 44 and 45).