Leveraging abuses

Leveraging abuse is an infringement of Article 102 TFEU committed by an undertaking active in several markets and dominant in one of them, which uses its position on the dominated market to distort competition on the non-dominated horizontally- or vertically-related market.Although leveraging abuse can consist in any of the actions described in Article 102 TFEU, the most significant and often met variations are tying and refusal to provide downstream operators with access to necessary input.

In order to be considered leveraging abuse, the conduct of the undertaking with dominant position must satisfy the following criteria:

1.The existence of a separate horizontal or vertical market to which the market power can be transferred

This condition for the purpose of definition of vertical leveraging was addressed by the Court of Justice in IMS Health v. NDC Health judgment: “it was relevant, in order to assess whether the refusal to grant access to a product or a service indispensable for carrying on a particular business activity was an abuse, to distinguish an upstream market, constituted by the product or service, …, and a (secondary) downstream market, on which the product or service in question is used for the production of another product or the supply of another service ”. 

The Court of First Instance also provided analysis of the conditions that signified that there was a separate horizontal market to which an undertaking concerned was trying to extend its market power in Microsoft v Commission case.

2. Close connection between non-dominated and dominated market

As was stated by the Court of First Instance in British Airways plc v Commission judgment, “abuse of a dominant position committed on the dominated product market, but the effects of which are felt in a separate market on which the undertaking concerned does not hold a dominant position may fall within Article 82 ECprovided that separate market is sufficiently closely connected to the first”.Although the Court did not provide any unified criterion that could be used to define whether the markets are “sufficiently closely connected” in its decision, the following factors that indicate the presence of necessary link between the markets can be derived from the practice of using this criterion in other cases:

-the favored status of the undertaking in the non-dominated market as a result of its dominant position on another market;

-high probability of company’s customers in one market becoming customers in the other;

-the presence of an undertaking and its competitors on both dominated and non-dominated markets.

3. An abusive conduct has to stem from the dominant position of an undertaking

In the Tetra Pak International SA v Commission judgement, the Court of Justice mentioned that “application of Article 86 presupposes a link between the dominant position and the alleged abusive conduct”. The causation requirement implies that a conduct of the company is caught by Article 102 TFEU only if it was caused by its dominant position on one of the markets. However, leveraging itself can not serve as a ground of abuse and has to be the result of dominant undertaking’s conduct that is considered abusive. 

Robert O’Donoghue and Jorge Padilla distinguish three situations in which the actions of dominant undertaking are likely to be considered a leveraging abuse:

-the effects of abusive conduct of an undertaking on the dominated market can be observed on non-dominated market;

-an undertaking commits an abuse on a non-dominated market with the purpose of strengthening or keeping its position on a dominated market;

-the company commits the abuse on a non-dominated market that is related to and connected with dominated market.