AKZO Chemie BV v Commission
Prices below average variable cost by a dominant undertaking are presumed abusive, and prices between average variable and average total cost are abusive if part of a plan to eliminate a competitor.
Facts
AKZO was a dominant producer of organic peroxides used in the plastics industry and as flour additives. ECS, a small competitor which supplied flour additives, began to expand into the plastics sector. AKZO threatened ECS, and then offered flour additives to ECS's customers at very low prices, in order to force ECS out of the plastics market. The European Commission found that this was predatory pricing.
Legal principle
The Court of Justice largely upheld the Commission's decision. The court said that prices below average variable costs, by means of which a dominant undertaking seeks to eliminate a competitor, must be regarded as abusive, because a dominant undertaking has no interest in applying such prices except that of eliminating competitors so as to enable it subsequently to raise its prices. Prices below average total costs but above average variable costs must be regarded as abusive if they are determined as part of a plan for eliminating a competitor. The evidence of AKZO's threats to ECS showed such a plan. The AKZO test remains the basic test for predatory pricing.
Related cases on predatory and excessive pricing, refusal to supply and essential facilities
- Alphabet Inc v Autorità Garante della Concorrenza e del Mercato (Android Auto) Case C-233/23, EU:C:2025:110
- Competition and Markets Authority v Flynn Pharma Ltd [2020] EWCA Civ 339
- Huawei Technologies Co Ltd v ZTE Corp Case C-170/13, EU:C:2015:477
- IMS Health GmbH & Co OHG v NDC Health GmbH & Co KG Case C-418/01, [2004] ECR I-5039
- Istituto Chemioterapico Italiano SpA and Commercial Solvents Corp v Commission Joined Cases 6 and 7/73, [1974] ECR 223
- Konkurrensverket v TeliaSonera Sverige AB Case C-52/09, [2011] ECR I-527
- Oscar Bronner GmbH & Co KG v Mediaprint Case C-7/97, [1998] ECR I-7791
- Radio Telefis Eireann v Commission (Magill) Joined Cases C-241/91 P and C-242/91 P, [1995] ECR I-743
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