Toolkit

Table of Contents Table of Practice Notes Table of Reference Documents Glossary
Module 1 Overview & Module 6 Executive Summary are also available in French, Spanish, Russian, Arabic and Chinese.
 

2.5.1 Abuse of Dominance

Abuse of dominance occurs when a dominant firm adopts predatory or exclusionary business practices with the aim of eliminating or substantially lessening competition and excluding competitors. Abuse of dominance may entail:

  • Refusals to deal, for example a refusal to supply an essential facility to a competitor,
  • Exclusive dealing arrangements, in which a seller prevents its distributors from selling competing products or services,
  • Tying and bundling, where a firm sells makes the purchase of one product or service conditional on the purchase of a second product or service,
  • Predatory pricing, where a firm sets prices below cost in order to force a competitor out of the market,
  • Non-price predation, where a firm adjusts the quality of its product offering to customers with the aim of harming its competitor. For example, a incumbent might offer an improved level of service to just those customers served by a new entrant.

A firm does not need to be dominant (in the sense of possessing a high market share) in order to implement these strategies. However, the consequences for competition can be particularly severe when the firm concerned is dominant.

RELATED INFORMATION

Remedies for Abuse of Dominance

Practice Notes

Last updated 02 Oct 2008

The ICT Regulation Toolkit is a joint production of infoDev and the International Telecommunication Union.

  infoDev logo ITU logo
 
Site by CaudillWeb