by Nuno Calaim Lourenço, Managing Associate at SRS Advogados
On 19 April 2018, the European Court of Justice (ECJ) delivered its judgment in the MEO – Serviços de Comunicações e Multimedia S.A. v. Competition Authority (C-525/16) case. The judgment provides important criteria of analysis with regard to the constituent elements of an abuse of a dominant position by discrimination, under the regime of Article 102 (c) of the Treaty on the Functioning of the European Union (TFEU) and advances the proposition that such conduct is not subject to a per se prohibition rule. The judgment clarifies, in particular, that in the case of second-degree price discrimination (directed at customers in a downstream market with whom the dominant undertaking does not compete) an infringement of competition rules only occurs if the discrimination entails actual or potential anti-competitive effects that may distort competition between downstream operators. In other words, it is the effective competitive disadvantage that results from discrimination, which must be demonstrated by reference to the actual circumstances of the case, including the impact on the costs, income and profitability structures of the affected party – rather than the practice of discrimination considered in abstract – which constitutes the criterion for the existence of an abuse. Although it does not create any ‘safe harbours’, this important clarification allows dominant companies greater flexibility in adapting their pricing policies to different market realities and does not coerce them into applying uniform tariffs.
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