Demonstration of a Dominant Position

‭Demonstration of a dominant position‬ -‭ THE‬‭relevant market‬‭:geographical dimension + substitutability‬‭of products or services.‬ ‭-There‬‭dominant position‬‭:‭i‬t is a position of economic‬‭power giving the power to‬ ‭obstruct the maintenance of effective competition in the market‬‭.‬ ‭ xamples of abuse of dominant position:‬ E ‭-‬‭Refusal of access to a resource‬‭:an E in a dominant‬‭position can impose prices on its‬ ‭suppliers which advantage it to the detriment of its competitors.‬ ‭Ex: Free filed a complaint in 2007 and 2009 against Orange for restricting access to underground‬ ‭fiber infrastructure.‬ -‭ THE‬‭predatory prices‬‭:prices lower than Y's costs to‬‭force a competitor out of the market or‬ ‭prevent the entry of a competing firm. It can then increase its prices and record profits which‬ ‭more than offset the losses recorded during the period of predation.‬ ‭ rosecution against agreements and cartels: detection through leniency:‬ P ‭Collecting evidence being very difficult, the law provides for leniency for E who denounce a cartel‬ ‭or agreement of which they are part.‬‭In Europe, 80%‬‭of cartels are sanctioned following a‬ ‭tip-off.‬ ‭ ction of a‬‭cartel‬‭:set a floor price; quantitative,‬‭geographical and market distribution by clientele.‬ A ‭-But faced with the stability problem described by the‬‭prisoner's dilemma‬‭(incited to betray).‬ ‭-‬‭E. Combe‬‭:Average lifespan of a cartel is 7 years.‬ ‭-Often cartels when: oligopoly / homogeneous goods / barriers to entry or exit.‬ ‭ )‬‭Competition policy in the face of public intervention:‬ c ‭Industrial policy objectives:‬‭Interventionist‬ ‭measures aimed at:‬ ‭-To promote structural change for strategic‬‭reasons‬ ‭-HAS‬‭help E or sectors in difficulty, to preserve activity‬‭and‬ ‭employment‬‭. May therefore conflict with the policy‬‭of the design.‬ ‭ he disadvantages of industrial policy‬‭:‬ T ‭-‬‭The State does not have the information necessary‬‭to act in a relevant manner‬‭(asymmetry of‬ ‭information on the E, sectors etc. which leads to bad decisions).‬ ‭-‬‭The State does not know how to disengage‬‭:Paris technos‬‭are risky, we must quickly identify‬ ‭failures and stop supporting these projects. This is what I do privately, but it is harder to stop public‬ ‭support. The beneficiaries of the subsidies are organizing themselves to prevent their cessation‬ ‭(‬‭capture‬‭).‬ ‭ hat industrial policy?‬ W ‭According to Troll In The‬‭economy of the common good‬‭, a good industrial policy must respect 7‬ ‭criteria: 1)‬ ‭Responding to a market failure‬‭(this is the case because‬‭the US and China do not play the game).‬ ‭1)‬‭Must rely on independent‬‭expertise‬‭(because EU not‬‭necessarily qualified to know which E to‬ ‭support)‬ ‭2)‬‭Must Help‬‭existing projects‬‭(and not emerging projects‬‭so we do not know the viability).‬ ‭3)‬ ‭Don't‬‭must not distort competition‬ ‭4)‬ ‭Culture of‬‭ex-post evaluation of expenditure‬‭(because the EU is not careful enough after its‬ ‭I).‬ ‭5)‬ ‭Must involve the private sector in risk-taking‬‭(because‬‭if the private sector refuses, it's not‬ ‭a good sign).‬ ‭6)‬ ‭Must be part of the evolution of economies.‬ ‭-Good criteria for EU because it guides policy intelligently, because EU has a low budget and‬ ‭therefore cannot waste.‬ ‭ he state aid regime:‬ T ‭Essential instrument of the European design policy allowing:‬ ‭-To establish fair conditions of competition between E on the internal market‬ ‭-To ensure good use of public money (limit inefficient spending).‬ ‭-To avoid a race for subsidies between Member States.‬ ‭-‬‭In 2016, member states spent 0.7% of EU GDP on state‬‭aid‬‭(according to the EC in 2017)‬