Brussels to soften stance on dominant companies

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Big companies are likely to face a reduced threat from the European Union’s top antitrust regulator, after Brussels said it would in future require stronger evidence before punishing a company for abusing its dominant position.

The European Commission said it wanted to pay more attention to the real economic effects a company’s behaviour had on the market, rather than follow the rigid approach of the past.

Such a move would bring European antitrust enforcement closer to the policies of US regulators. It would probably also lead to fewer Commission investigations against large companies.

The new approach is revealed in a working paper on Article 82 of the EU treaty that allows the regulator to punish companies for abusing their dominant position. The paper, presented in Brussels on Monday, is not legally binding, but could form the basis for formal Commission guidelines later on.

Neelie Kroes, competition commissioner, said: “Dominant companies should be allowed to compete effectively. Putting this policy objective into a consistent legal and economic framework is ambitious, but it is worthwhile for the clarity it will give to companies and their advisers.”

Antitrust experts welcomed the paper’s thrust.

Several lawyers said the changes were likely to have the biggest impact on dominant companies keen to pursue aggressive rebate and discount schemes.

Thomas Vinje, a partner at Clifford Chance in Brussels, said: “In the past, the Commission has followed an overly formalistic and mechanistic approach that has led dominant companies to refrain from certain competitive behaviour. Consumers would have benefited from more in the way of rebates and discounting behaviour from dominant companies.”

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