Post Danmark A/S v Konkurrencerådet.
Date: 2012-03-27
20. It is apparent from case-law that Article 82 EC covers not only those practices that directly cause harm to consumers but also practices that cause consumers harm through their impact on competition (see Case C‑52/09 TeliaSonera Sverige  [2011] ECR I‑0000, paragraph 24 and case-law cited).  It is in the latter sense that the expression ‘exclusionary abuse’ appearing in the questions referred is to be understood.
21. It is settled case-law that a finding that an undertaking has such a dominant position is not in itself a ground of criticism of the undertaking concerned (Case 322/81 Nederlandsche Banden-Industrie-Michelin  v Commission [1983] ECR 3461, paragraph 57, and Joined Cases C‑395/96 P and C‑396/96 P Compagnie maritime belge transports and Others  v Commission [2000] ECR I‑1365, paragraph 37).  It is in no way the purpose of Article 82 EC to prevent an undertaking from acquiring, on its own merits, the dominant position on a market (see, inter alia, TeliaSonera Sverige , paragraph 24).  Nor does that provision seek to ensure that competitors less efficient than the undertaking with the dominant position should remain on the market.
22. Thus, not every exclusionary effect is necessarily detrimental to competition (see, by analogy, TeliaSonera Sverige , paragraph 43).  Competition on the merits may, by definition, lead to the departure from the market or the marginalisation of competitors that are less efficient and so less attractive to consumers from the point of view of, among other things, price, choice, quality or innovation.
23. According to equally settled case-law, a dominant undertaking has a special responsibility not to allow its behaviour to impair genuine, undistorted competition on the internal market (Case C‑202/07 P France Telecom  v Commission [2009] ECR I‑2369, paragraph 105 and case-law cited).  When the existence of a dominant position has its origins in a former legal monopoly, that fact has to be taken into account.
24. In that regard, it is also to be borne in mind that Article 82 EC applies, in particular, to the conduct of a dominant undertaking that, through recourse to methods different from those governing normal competition on the basis of the performance of commercial operators, has the effect, to the detriment of consumers, of hindering the maintenance of the degree of competition existing in the market or the growth of that competition (see, to that effect, AKZO  v Commission , paragraph 69; France Télécom  v Commission , paragraphs 104 and 105; and Case C‑280/08 P Deutsche Telekom  v Commission  [2010] ECR I‑0000, paragraphs 174, 176 and 180 and case-law cited).
25. Thus, Article 82 EC prohibits a dominant undertaking from, among other things, adopting pricing practices that have an exclusionary effect on competitors considered to be as efficient as it is itself and strengthening its dominant position by using methods other than those that are part of competition on the merits.  Accordingly, in that light, not all competition by means of price may be regarded as legitimate (see, to that effect, AKZO  v Commission , paragraphs 70 and 72; France Télécom  v Commission , paragraph 106; and Deutsche Telekom  v Commission , paragraph 177).
26. In order to determine whether a dominant undertaking has abused its dominant position by its pricing practices, it is necessary to consider all the circumstances and to examine whether those practices tend to remove or restrict the buyer’s freedom as regards choice of sources of supply, to bar competitors from access to the market, to apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, or to strengthen the dominant position by distorting competition (see, to that effect, Deutsche Telekom  v Commission , paragraph 175 and case-law cited).
28. Thus, in order to assess the lawfulness of a low-price policy practised by a dominant undertaking, the Court has made use of criteria based on comparisons of the prices concerned and certain costs incurred by the dominant undertaking, as well as on the latter’s strategy ( AKZO  v Commission , paragraph 74, and France Télécom  v Commission , paragraph 108).
29. As to whether Post Danmark pursued an anti-competitive strategy, it can be seen from the documents before the Court that the complaint at the source of the main proceedings was based on the suggestion that Post Danmark, by a policy of low prices directed at certain of its competitor’s major customers, might drive that competitor from the market in question.  However, as is apparent from the order for reference, it could not be established that Post Danmark had deliberately sought to drive out that competitor.
30. Moreover, contrary to the line of argument put forward by the Danish Government, which has submitted observations in these proceedings in support of the Konkurrencerådet’s position in the main proceedings, the fact that the practice of a dominant undertaking may, like the pricing policy in issue in the main proceedings, be described as ‘price discrimination’, that is to say, charging different customers or different classes of customers different prices for goods or services whose costs are the same or, conversely, charging a single price to customers for whom supply costs differ, cannot of itself suggest that there exists an exclusionary abuse.
31. In the present case, it emerges from the case-file that, for the purpose of carrying out a price-cost comparison, the Danish competition authorities had recourse, not to the concept of ‘variable costs’ mentioned in the case-law stemming from AKZO  v Commission , but to another concept, which those authorities termed ‘incremental costs’.  In this respect, it can be seen from, in particular, the written observations of the Danish Government and its written replies to the questions asked by the Court, that those authorities defined ‘incremental costs’ as being ‘those costs destined to disappear in the short or medium term (three to five years), if Post Danmark were to give up its business activity of distributing unaddressed mail’.  In addition, that government stated that ‘average total costs’ were defined as being ‘average incremental costs to which were added a portion, determined by estimation, of Post Danmark’s common costs connected to activities other than those covered by the universal service obligation’.
32. However, as the Danish Government stated in its written replies to those questions, a notable feature of the case in the main proceedings is that there are considerable costs related both to the activities within the ambit of Post Danmark’s universal service obligation and to its activity of distributing unaddressed mail.  These ‘common’ costs are due, in particular, to the fact that, at the material time, Post Danmark was using the same infrastructure and the same staff for both the activity of distributing unaddressed mail and the activity reserved to it in connection with its universal obligation for certain addressed items of mail.  That government states that, according to the Konkurrencerådet, because Post Danmark’s unaddressed mail activity used the undertaking’s ‘common distribution network resources’, the costs of its universal service obligation activities could be reduced over a period of three to five years if Post Danmark were to give up distributing unaddressed mail.
33. In those circumstances, it emerges from the case-file, and in particular from paragraphs 148 to 151 and 200 of the Konkurrencerådet’s decision of 24 November 2004, mentioned in paragraph 13 above, that for the purpose of estimating what it described as ‘average incremental costs’, the Konkurrencerådet included, among other things, not only those fixed and variable costs attributable solely to the activity of distributing unaddressed mail, but also elements described as ‘common variable costs’, ‘75% of the attributable common costs of logistical capacity’ and ‘25% of non-attributable common costs’.
34. In the specific circumstances of the case in the main proceedings, it must be considered that such a method of attribution would seem to seek to identify the great bulk of the costs attributable to the activity of distributing unaddressed mail.
35. When that estimation was completed, it was found, among other things, that the price offered to the Coop group did not enable Post Danmark to cover the average total costs attributed to the activity of unaddressed mail distribution taken as a whole, but did enable it to cover the average incremental costs pertaining to that activity, as estimated by the Danish competition authorities.
40. If the court making the reference, after carrying out that assessment, should nevertheless make a finding of anti-competitive effects due to Post Danmark’s actions, it should be recalled that it is open to a dominant undertaking to provide justification for behaviour that is liable to be caught by the prohibition under Article 82 EC (see, to this effect, Case 27/76 United Brands and United Brands Continentaal  v Commission  [1978] ECR 207, paragraph 184; Joined Cases C‑241/91 P and C‑242/91 P RTE and ITP  v Commission  [1995] ECR I‑743, paragraphs 54 and 55; and TeliaSonera Sverige , paragraphs 31 and 75).
41. In particular, such an undertaking may demonstrate, for that purpose, either that its conduct is objectively necessary (see, to that effect, Case 311/84 CBEM  [1985] ECR 3261, paragraph 27), or that the exclusionary effect produced may be counterbalanced, outweighed even, by advantages in terms of efficiency that also benefit consumers (Case C‑95/04 P British Airways v Commission [2007] ECR I‑2331, paragraph 86, and TeliaSonera Sverige , paragraph 76).
42. In that last regard, it is for the dominant undertaking to show that the efficiency gains likely to result from the conduct under consideration counteract any likely negative effects on competition and consumer welfare in the affected markets, that those gains have been, or are likely to be, brought about as a result of that conduct, that such conduct is necessary for the achievement of those gains in efficiency and that it does not eliminate effective competition, by removing all or most existing sources of actual or potential competition.
44. Having regard to all the foregoing considerations, the answer to be given to the questions referred is that Article 82 EC must be interpreted as meaning that a policy by which a dominant undertaking charges low prices to certain major customers of a competitor may not be considered to amount to an exclusionary abuse merely because the price that undertaking charges one of those customers is lower than the average total costs attributed to the activity concerned, but higher than the average incremental costs pertaining to that activity, as estimated in the procedure giving rise to the case in the main proceedings.  In order to assess the existence of anti-competitive effects in circumstances such as those of that case, it is necessary to consider whether that pricing policy, without objective justification, produces an actual or likely exclusionary effect, to the detriment of competition and, thereby, of consumers’ interests.
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