1. Introduction

Article 102 prohibits the “abuse by one or more undertakings of a dominant position”. Hence, Article 102 applies only where the undertaking has a “dominant position”. This section introduces the relevancy of market shares to assess “dominant position.”

2.Analysis

2.1 Findings of dominance

The dominant position is assessed in two steps: i) defining the relevant market by SSNIP test, ii) assessing the position of the undertaking under investigation within the relevant market.

In the second step, market shares provide valuable information about the structure of the market and of the relative importance of the various undertakings active on the market.

However, according to the Commission, market share is only a useful indication. The Commission interprets market shares in the light of relevant market conditions, and in particular of the dynamics of the market and of the extent to which products are differentiated. In other word, market shares themselves do not determine whether a firm has a dominant position. As the court in United Brand pointed out, “in general a dominant position derives from a combination of several factors which, taken separately, are not necessarily determinative”.

According to the Commission, in order to assess the dominant position, following three factors will take into account.

1) the position of the undertaking and its competitor

2) expansion and entry

3)countervailing buyer power

2.2 Relevance of market shares

Having said above, however, the Court have required high market shares to infer monopoly power. The Court of Justice in Hoffmann-La Roche said “although the importance of the market shares may vary from one market to another the view may legitimately be taken that very large market shares are in themselves, and save exceptional circumstances, evidence of the existence of a dominant position. An undertaking which has very large market share and holds it for some time…is by virtue of that share in a position of strength”. According to the Case law of ECJ, the following conclusions regarding relevance of market shares assessing dominance are led.

1) Dominance where an undertaking has a market share of 50 per cent or more.

Ever since AKZO, it is believed that EU case law adopts rebuttable presumption of dominance at 50 per cent market share.

2) Dominance where an undertaking has market shares in the range of 40% to 50 %

In United Brands vs. Commission,the Court said market shares above 40 per cent may be relevant to find dominance. However in the case of 40%- 50%, the conclusions depend on i) changes of market share in the long term, ii) the strength and number of the competitors, iii) the market shares of second place.

3) Dominance where an undertakings has market share in the range of 30%-40%

 In the case of undertakings has market shares in the range of 30% to 40%, it is necessary to proof the disparity in the market shares or significant market entry barriers. However, according to the Commission’s experience, “dominance is not likely if the undertaking’s market share is below 40% in the relevant market.”

3. Conclusion.

As described above, market shares do not in themselves determine whether an undertaking has a dominant position. Nevertheless, market shares are the most important factor to assess dominance.