AKZO Chemie BV v Commission of the European Communities.
Date: 1991-07-03
16 In that respect it should be observed that, as the Court held in Joined Cases 43 and 63/82 VBVB and VBBB v Commission [1984] ECR 19, paragraph 25, "although regard for the rights of the defence requires that the undertaking concerned shall have been enabled to make known effectively its point of view on the documents relied upon by the Commission in making the findings on which its decision is based, there are no provisions which require the Commission to divulge the contents of its files to the parties concerned".
29 The statement of objections must specify clearly the facts upon which the Commission relies and its classification of those facts.
51 In its judgment in Case 31/80 L' Oréal v De Nieuwe AMCK [1980] ECR 3775, paragraph 25) the Court held that when considering the possibly dominant position of an undertaking within a particular market, "the possibilities of competition must be judged in the context of the market comprising the totality of the products which, with respect to their characteristics, are particularly suitable for satisfying constant needs and are only to a limited extent interchangeable with other products".
60 With regard to market shares the Court has held that very large shares are in themselves, and save in exceptional circumstances, evidence of the existence of a dominant position (judgment in Case 85/76 Hoffman-La Roche v Commission [1979] ECR 461, paragraph 41). That is the situation where there is a market share of 50% such as that found to exist in this case.
69 It should be observed that, as the Court held in its judgment in Case 85/76 Hoffman-La Roche v Commission [1979] ECR 461, paragraph 91, the concept of abuse is an objective concept relating to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is weakened and through recourse to methods which, different from those which condition normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition.
70 It follows that Article 86 prohibits a dominant undertaking from eliminating a competitor and thereby strengthening its position by using methods other than those which come within the scope of competition on the basis of quality. From that point of view, however, not all competition by means of price can be regarded as legitimate.
71 Prices below average variable costs (that is to say, those which vary depending on the quantities produced) by means of which a dominant undertaking seeks to eliminate a competitor must be regarded as abusive. A dominant undertaking has no interest in applying such prices except that of eliminating competitors so as to enable it subsequently to raise its prices by taking advantage of its monopolistic position, since each sale generates a loss, namely the total amount of the fixed costs (that is to say, those which remain constant regardless of the quantities produced) and, at least, part of the variable costs relating to the unit produced.
72 Moreover, prices below average total costs, that is to say, fixed costs plus variable costs, but above average variable costs, must be regarded as abusive if they are determined as part of a plan for eliminating a competitor. Such prices can drive from the market undertakings which are perhaps as efficient as the dominant undertaking but which, because of their smaller financial resources, are incapable of withstanding the competition waged against them.
73 These are the criteria that must be applied to the situation in the present case.
74 Since the criterion of legitimacy to be adopted is a criterion based on the costs and the strategy of the dominant undertaking itself, AKZO' s allegation concerning the inadequacy of the Commission' s investigation with regard to the cost structure and the pricing policy of its competitors must be rejected at the outset.
2. The various aspects of the abuse
149 With regard to the exclusive supply obligation it should be borne in mind that the Court held in its judgment in Hoffman-La Roche, cited above, at paragraph 89, that if an undertaking having a dominant position on the market ties buyers - even if it does so at their request - by an obligation or promise on their part to obtain all or most of their requirements from that undertaking, this constitutes an abuse of a dominant position within the meaning of Article 86 of the Treaty.
162 In that respect it must be observed that the infringement committed by AKZO is particularly serious, since the behaviour complained of was intended to prevent a competitor from extending its activity into a market in which AKZO held a dominant position.