By judgment delivered on 12 May 2022, the Court of Justice of the European Union clarified the criteria for identifying abusive conduct engaged in by an undertaking in a dominant position, pursuant to Article 102 TFEU.
In particular, in May 2020, the Italian Council of State, called upon to review the conduct of a historic operator in the context of the liberalization of the electricity market, referred to the Supreme Court of the European Union, by way of a preliminary ruling, certain clarifications regarding the interpretation and application of Article 102 TFEU concerning the abusive exploitation by one or more undertakings of a dominant position on the internal market and, consequently, the correct identification of such conduct.
The Court of Justice of the European Union, thus seizing the opportunity afforded to it, conducted a thorough and exhaustive examination of the matter in question, establishing important rules and interpretative principles that will undoubtedly find application and follow-up not only in Italy.
Indeed, the supreme judicial body of the European Union noted, in the first place, that conduct constituting an abuse of competition by an undertaking in a dominant position on the internal market (or on a substantial part thereof) is any practice which is in itself capable of prejudicing the structure of effective competition, implemented by resorting to resources or means other than those on which normal competition based on merit is founded, without it being necessary that such practice additionally has the capacity to cause direct harm to consumers.
In any case, the dominant undertaking retains the possibility of escaping the prohibition set out in Article 102 TFEU by demonstrating that the exclusionary effect which may result from the practice in question is counterbalanced, if not outweighed, by positive effects for consumers, in particular in terms of prices, choice, quality and innovation.
In other words, the criterion for identifying the abusive conduct of a dominant undertaking is to be found solely in the capacity and suitability of the practice adopted by the said undertaking to produce anticompetitive effects even if merely abstract in nature, it not being necessary, moreover, that the expected result of such conduct aimed at excluding competitors from the market in question be achieved and without regard to the specific intent of the undertaking itself.
The Court continues by observing that there is a violation of the only lawful competition, namely that based on merit, whenever an undertaking in a dominant position adopts a practice to outstrip competitors in a manner that could not be adopted in analogous fashion by a hypothetical competitor equally efficient on the market in question; it follows from this, moreover, that the undertaking which loses its legal monopoly must refrain, throughout the entire phase of liberalization of the market in question, from resorting to the means at its disposal by virtue of its previous monopoly, and thus not available to all competitors thereon, in order to illegally preserve a dominant position on the market in question recently liberalized, unless the same undertaking demonstrates that the exclusionary effect which may result from the practice in question is, also in this case, counterbalanced, if not outweighed, by advantages in terms of efficiency which also benefit consumers.
Finally, the Court of Justice of the European Union expresses itself on the hypothesis in which the dominant position is exploited abusively by one or more “subsidiary” companies belonging to an economic unit: in such case – which is presumed when at least the vast majority of the capital of such “subsidiary” companies is held by the “parent” company – the latter company is also to be considered ex officio responsible for the abuse perpetrated by the “subsidiary” companies, save in the event that it demonstrates that the “subsidiary” companies acted autonomously.
