Revitalizing Antitrust in Its Second Century: Essays on Legal, Economic, and Political Policy

By Harry First; Eleanor M. Fox et al. | Go to book overview

small British producer ( Engineering and Chemical Suppliers Ltd. (ECS)) having its main activities in flour additives (80 percent of its turnover), so as to stop any expansion of ECS into the plastics sector. The UK flour additive sector was of little importance to Akzo compared with the EEC market for plastics, and Akzo could afford to sustain losses in this specialized sector to protect its position in the bigger plastic market. It should be noted that, according to the Commission's decision, no per se test based on marginal cost has to be applied. The test is whether the price cutting or other behavior, which may include bait pricing, tie-in sales, and exclusive requirements obligations, constitutes unreasonable behavior intended to eliminate or damage the particular competitor. 15

In the presence of entry barriers, expected cross-market interactions among multiproduct firms may also help in maintaining explicit and implicit oligopolistic agreements. This throws light on the possible links between explicit or tacit collusive behavior and exclusionary conducts.

Another source of exclusionary conduct is based on privileged connections with public institutions. Long-term agreements with the state and government shareholding may facilitate discrimination by incumbents and blockage of entry to others. It may produce anticompetitive changes in technical norms, health regulations affecting products, rules of granting government credits or subsidies, and fiscal legislation or legislation regarding access to the profession. In mixed economies some large industrial groups are indeed capable of controlling part of their legal and institutional environment and of using it in order to implement anticompetitive courses of conduct. This is often the case in the EEC where nontariff barriers, including public procurement, have had a strong negative effect on intra-EC trade.

It must be recalled here that, in principle, European rules of competition apply to member states and to public enterprises as well as to the private sector. 16 Therefore, without facing some of the difficult U.S. problems of federalism, Europe has tools to harmonize public restrictions with European competition policy.


NOTES
1.
Commission of the European Economic Community (EEC), White Paper on Completing the Internal Market ( 1985).
2.
Treaty Establishing the European Economic Community, Mar. 25, 1957.
3.
Hoffmann-La Roche v. Commission, 1979 E.C.R. 461, [ 1978- 1979 Transfer Binder] Common Mkt. Rep. (CCH) 8527.
4.
N.V. Nederlandsche Banden-Industrie Michelin v. Commission, 1983 E.C.R. 3461, [ 1983- 1985 Transfer Binder] Common Mkt. Rep. (CCH) 14,031.

-265-

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