Podcast
Questions and Answers
Under Article 102 TFUE and Article 2 LDC, what commercial behavior is prohibited for a company recognized as dominant in its market?
Under Article 102 TFUE and Article 2 LDC, what commercial behavior is prohibited for a company recognized as dominant in its market?
- Offering discounts to loyal customers to maintain market share.
- Investing heavily in research and development to create innovative products.
- Charging prices that are above the average market price to maximize profits.
- Engaging in practices that exploit the market power, such as unfair pricing or tying contracts. (correct)
Which scenario exemplifies 'discriminatory pricing' as prohibited by Article 102 TFUE and Article 2 LDC?
Which scenario exemplifies 'discriminatory pricing' as prohibited by Article 102 TFUE and Article 2 LDC?
- A company increases prices across the board due to rising production costs.
- A company offers promotional discounts to attract new customers.
- A company charges different prices to different customers for the same product without justifiable reasons. (correct)
- A company offers a lower price to customers who buy in bulk.
What is the key characteristic of a 'tying contract' that makes it an abuse of dominance under Article 102 TFUE and Article 2 LDC?
What is the key characteristic of a 'tying contract' that makes it an abuse of dominance under Article 102 TFUE and Article 2 LDC?
- It allows customers to customize their product by choosing from a variety of add-ons.
- It requires customers to purchase a product they may not want as a condition of buying a desired product. (correct)
- It offers customers a discount for purchasing multiple products together.
- It bundles products to simplify the purchasing process for the customer.
A company with a dominant market share refuses to supply a critical component to a smaller competitor, effectively preventing the competitor from operating. How is this action classified under Article 102 TFUE and Article 2 LDC?
A company with a dominant market share refuses to supply a critical component to a smaller competitor, effectively preventing the competitor from operating. How is this action classified under Article 102 TFUE and Article 2 LDC?
In the Microsoft case, what specific action led to the €497 million fine imposed by the EU?
In the Microsoft case, what specific action led to the €497 million fine imposed by the EU?
Which of the following scenarios would most likely be considered an abuse of dominance related to 'unfair pricing'?
Which of the following scenarios would most likely be considered an abuse of dominance related to 'unfair pricing'?
A software company holds a near-monopoly in the market for operating systems. They announce that the latest version of their OS will only be compatible with their newly released office suite. This situation is most likely to be viewed as:
A software company holds a near-monopoly in the market for operating systems. They announce that the latest version of their OS will only be compatible with their newly released office suite. This situation is most likely to be viewed as:
A utility company is the sole provider of electricity in a region. It charges significantly higher rates to businesses compared to residential customers. This could be seen as discriminatory pricing unless:
A utility company is the sole provider of electricity in a region. It charges significantly higher rates to businesses compared to residential customers. This could be seen as discriminatory pricing unless:
What legal principle is most directly violated when a dominant company uses its position to impose unfair trading conditions on its suppliers?
What legal principle is most directly violated when a dominant company uses its position to impose unfair trading conditions on its suppliers?
Which of the following best describes the overarching goal of Article 102 TFUE and Article 2 LDC?
Which of the following best describes the overarching goal of Article 102 TFUE and Article 2 LDC?
Flashcards
Is dominance illegal?
Is dominance illegal?
Having a major market share is not illegal, but misusing that position is.
Article 102 TFUE
Article 102 TFUE
Article 102 of the Treaty on the Functioning of the European Union.
Article 2 LDC
Article 2 LDC
Article 2 of the Law on the Protection of Competition.
Unfair pricing
Unfair pricing
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Discriminatory pricing
Discriminatory pricing
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Tying contracts
Tying contracts
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Refusing to supply
Refusing to supply
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Microsoft EU Case
Microsoft EU Case
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Study Notes
- Legal frameworks state that holding a dominant position isn't illegal, but abusing that position is illegal.
- Article 102 TFUE and Article 2 LDC prohibit specific actions by dominant companies.
Prohibited actions include
- Unfair pricing practices, which includes setting prices too high or too low.
- Discriminatory pricing, which means charging different prices for equivalent transactions.
- Imposing tying contracts, which force buyers to purchase an unwanted product, often as part of a package deal.
- Refusing to supply essential goods or services to customers.
Microsoft Case
- Illustrates these principles; the EU fined Microsoft €497 million for bundling Windows Media Player with Windows.
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