Competition on The Merits

In his recent paper, Pablo Ibanez Colomo delves into the question of what constitutes competition on the merits. The relevance of this notion has surged, particularly following the exposure of a friction in the case law by Servizio Elettrico Nazionale. Noteworthy cases of the 2010s, such as Post Danmark I, TeliaSonera, or Intel, seemingly applied Article 102 TFEU without significant attention to the concept of competition on the merits.

As the discussion around competition on the merits takes center stage, Colomo’s paper addresses two interconnected questions: What precisely is competition on the merits? And does Article 102 TFEU apply exclusively to abnormal or wrongful conduct, or does it extend to normal business practices?

The paper begins by exploring the latter question, indicating that normal conduct can indeed fall under the purview of Article 102 TFEU. In this context, ‘normal’ refers to strategies that are potentially pro-competitive, available for non-exclusionary reasons, and applicable to both dominant and non-dominant firms.

Colomo points out that practices like exclusive dealing, tying, rebates, and even a refusal to deal with a third party are considered normal in this sense. However, he underscores that these practices may transform into an abuse of dominant position under specific conditions.

Moving on to the concept of competition on the merits, the paper elucidates that this notion has become a source of confusion and friction in the case law. Colomo attributes these tensions, in part, to the introduction of the concept during a time when prevailing ideas about abusive conduct differed significantly from the present. In the 1960s and 1970s, the assumption was that abusive practices could be identified in advance and in the abstract, with a clear distinction between unlawful conduct and legitimate expressions of competition on the merits…

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