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Moreover, as we have previously stated, dominance implies the possibility of acting independently of your customers. Countervailing buyer power might lead to the finding of lack of dominance, for example, where the buying side is highly concentrated (few buyers with high shares).

 II. Distinct products

 

The products to be tied or bundled should be distinct. Two products are distinct if, in the absence of tying or bundling, a substantial number of customers would purchase or would have purchased the tying product without also buying the tied product from the same supplier, thereby allowing stand-alone production for both the tying and the tied product.

Evidence that two products are distinct could include direct evidence that, when given a choice, customers purchase the tying and the tied products separately from different sources of supply, or indirect evidence, such as the presence on the market of undertakings specialized in the manufacture or sale of the tied product without the tying product ( or of each of the products bundled by the dominant undertaking, or evidence indicating that undertakings with little market power, particularly in competitive markets, tend not to tie or not to bundle such products.

The Commission set therefore a demand test to identify whether customers have independent demands for each product as well as supply tests (there are companies that offers the products separately or are there manufacturers specializing in the production of the tied good only?).

Sometimes, it may be hard to determine if there are indeed two tied products. For example, in Microsoft, the undertaking claimed that you could not speak of separate products since there would be no demand for an operating system without a streaming media player. The Court rejected the argument, stating that just because two products are complimentary it does not mean that the practice is not an abuse.

 

  III. Coercion

 

 As mentioned above, coercion to purchase two products was one of the relevant elements used in Microsoft case in order to establish abusive tying

. Coercion may take several forms. (a) contractual coercion - when the requirement to buy product B is a condition for the sale of product A, i.e .a refusal to supply the tying  product separately (b) Technical coercion is preventing the user from using the dominant product without the tied product.. (c) Financial coercion, on the other hand, is a package discount making it meaningless to buy the tied product separately. This may be explicit in an agreement (for e.g. Tetra Pack II case) or de facto (for e.g. Hilti case).

 

IV. Anticompetitive effects

 Regarding the condition of “anti-competitive foreclosure” is used to describe a situation where effective access of actual or potential competitors to supplies or markets is hampered or eliminated as a result of the conduct of the dominant undertaking whereby the dominant undertaking is likely to be in a position to profitably increase prices to the detriment of consumers. 

 

Factual evidence of foreclosure is not necessary as a constituent element of tying under art. 102 but it is enough to show that tying may have a possible foreclosure effect on the market. In other words, the mere risk of foreclosure can result in a finding against a dominant company.

According to the British Sugar case

, “reserving for itself the separate activity of delivering sugar” was sufficient as an anticompetitive effect. In Hilti case

, the Commission took the view that depriving the consumer of the choice of buying the tied products from separate suppliers was in itself abusive exploitation.

 

With respect to the method used for analyzing the anticompetitive effects (possible foreclosure on the market of the tied product) the assessment of the foreclosure effect on the tied market can be considered to consist of two parts.(a) First, to establish which customers are “tied” in the sense that competitors to the dominant company cannot compete for their business. (b) Second, to establish whether these customers “add up” to a sufficient part of the market being tied.

 

V. Objective and Proportionate Justification

As per the Discussion Paper’s