Dominance (economics)

Dominance is a term of antitrust law. He refers to a situation in which a company is exposed to no or insufficient competitive pressure. The exact definition varies depending on the legislation. An entity may be dominant in the market supply and demand. It is possible that in a market several companies jointly own a dominant position. In this case, spoken of collective dominance.

Company in a dominant position under the administrative control of abusive practices by the competition authority. In addition, the Antitrust normally prohibited mergers through which creates a dominant position or strengthening.

  • 4.1 Germany
  • 4.2 Switzerland

Definition in laws

Germany

According to the German Act against Restraints of Competition (GWB ) a company is dominant when in the relevant market, which is determined by a market definition,

  • Has no competitors or is not exposed to significant competition or
  • Superior in relation to its competitors market position has.

The Act against Restraints of Competition ( GWB § 18 para 4 ) was up to the 8th amendment from a market share of one-third ( § 19 para 3 sentence 1 GWB ), since June 30, 2013 from at least 40 percent believed that a company is dominant. However, these assumptions are not in the sense of civil procedure ( § 292 ZPO). Rather, antitrust and cartel court, market conditions have to be elucidated. Only if this explanation is unsuccessful, and the dominance can not be established properly, the presumption prevails. A number of undertakings is considered dominant if it consists of at most three companies that together achieve a market share of 50 percent, or a maximum of five companies, the combined market share of two thirds of reach ( § 19 paragraph 3, sentence 2 of the ARC ). This is due to the arranged burden of proof ( " unless the undertakings demonstrate dass .. " ) a real presumption in civil actions. The market share is to be determined usually by the turnover only subsidiary shall be based on the sales figures.

From the dominant position must be distinguished in German law the strong market position.

Switzerland

In the Swiss Federal Act on Cartels and Other Restraints of Competition of 6 October 1995 ( Competition Act, KG, SR 251 ) are considered as dominant companies single or multiple companies that are on the market in a position to stand out from other market participants ( competitors, suppliers or demanders ) to a significant extent independently to behave (Article 4 paragraph 2 KG ). In which entered into force on 1 April 2004 revision of the Cartel Act, the bracket formulation " ( competitors, suppliers or demanders )" was inserted. Whether this insertion represents a clarification or extension of the dominance concept (on the so-called relative dominance ) is debatable in teaching. Presumptions in relation to the dominant position does not know the Swiss Cartel Act.

Determination

In order to establish a dominant position, the relevant market and the company's position in this market are to be determined. Criteria for determining the position on the market can be:

  • The distribution of market shares on the market,
  • The development of market shares,
  • The financial strength,
  • Access to procurement and sales markets,
  • Links with other companies,
  • Legal or real barriers to entry,
  • Number and strength of competitors.

Abuse offenses

The antitrust law prohibited abuse of a dominant position can be done in many ways. The antitrust laws of Germany and Switzerland therefore know only a non-exhaustive list of possible abuse offenses. Unacceptable can be about the desire of inappropriate charges or other terms and conditions, discrimination between trading partners, the denial of access to infrastructure or the targeted undercutting of prices ( predatory pricing ).

Practice

Germany

Due to the strengthening of dominant positions, the Federal Cartel Office said on 19 January 2006, the takeover of ProSiebenSat.1 Media AG by Axel Springer Verlag. Then gave the Axel Springer Verlag known on 31 January 2006, to refrain from taking over distance.

2002 the Federal Cartel Office prohibited the acquisition of Ruhrgas AG E.ON 's However, a ministerial authorization enabled then the project.

Switzerland

Swisscom Mobile was occupied by the Competition Commission on 5 February 2007 with a sanction of 333 million francs, because they for the period 1 April 2004 to 31 May 2005 the desire of unreasonably high termination fees in a dominant position at the termination of calls on had abused its mobile network. Appeal against the decision was announced.

In a decree of 5 March 2001, the Competition Commission found that the Freiburg Electricity abuse a dominant position in the regional electricity distribution, by refusing to conduct electricity of the rival company Watt on their network. The decision was supported by the Federal Court on 17 June 2003.

Swell

  • Antitrust
Supply (economics) Sanctions (law)
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