Post Danmark A/S v Konkurrencerådet (Post Danmark I)

Not every exclusionary effect is detrimental to competition, because competition on the merits may lead to the departure of less efficient competitors, and selective low prices are not abusive unless they exclude as efficient competitors.

Citation
Case C-209/10, EU:C:2012:172
Court
Court of Justice of the European Union
Year
2012
Subject
Competition Law
Topic
Dominance and exclusionary abuse

Facts

Post Danmark, the Danish postal operator, which held a dominant position in the distribution of unaddressed mail, offered low prices to former customers of its main competitor, Forbruger-Kontakt, which were lower than the prices it charged its existing customers, but which covered its average incremental costs. The Danish competition authority found that this was an abuse of a dominant position.

Legal principle

The Court of Justice held that a policy of charging low prices to certain former customers of a competitor could not be considered an exclusionary abuse merely because the price was lower than the average total costs attributed to the activity, but higher than the average incremental costs. The court said that article 102 does not seek to ensure that competitors less efficient than the dominant undertaking should remain on the market, and that competition on the merits may, by definition, lead to the departure from the market or the marginalisation of competitors that are less efficient and so less attractive to consumers. A dominant undertaking may also justify its conduct by showing that it is objectively necessary or produces efficiencies.

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