, Mid-term assignment
Week 2, question 1: What factors have contributed to the creation of the Single Market?
Discuss the concept of abuse of market power within the European Union (EU) competition
framework. Define what constitutes abuse of market power and provide examples of
behaviors that may be considered as such under EU competition law. Furthermore, analyse
the legal and economic rationales behind prohibiting abuse of market power.
Contributions to the creation of the single market
1. Economic Integration: One of the primary objectives of removing the barriers was the
free movement of goods, services, capital and labour. “An area without internal frontiers
in which the free movement of goods, persons, services and capital is ensured.”1 The
single market was to harmonise laws and regulatory standards to create a level playing
field for businesses and encourage competition. Eliminating customs duties and other
trade barriers facilitated the flow of goods across borders, promoting trade and economic
growth.
2. The white paper: The Commission, which was led by Jacque Delors, released
“Completing the Internal Market”, which was made up of three chapters and 300 specific
proposals that needed to be implemented to complete the internal market. This legislation
was the Single European Act (SEA) that was released in 1986. 2
3. Eurosclerosis: In the 1970s, a pattern of economic stagnation in Europe may have
resulted from government over-regulation and overly social benefits policies. This
stagnation ended the post-war economic expansion period from 1945 to 1973. In 1973,
the first oil crisis hit; in 1971, Bretton Woods collapsed, and the inflation was high. This all
resulted in a period of stagnation and inflation in the economy. In the 1980s crisis, the
American Central Bank launched an anti-inflationary policy with high-interest rates, which
caused an unemployment crisis. 3
Abuse of market power
Abuse of market power is defined in Article 102 of The Treaty on The Functioning of The
European Union (further mentioned as TFEU); this article prohibits “any abuse by one or
more undertakings of a dominant position within the common market”.4 This article is aimed
at monopolies/oligopolies because they contain a big part of the market, so if they were to
abuse their power, that would make a lot of impact. When there is a case of illegal abuse, the
Commission can fine, cease or break up companies by forcing them to sell.5 These are two
examples of abuse of market power:
1. Discriminatory practices: Judgment of the General Court in Case T-604/18 | Google
and Alphabet v Commission (Google Android): Google's Universal Search algorithm
promoted Google's own products in search engine results pages and demoted links to
competing for comparative shopping services and deprived end users of competition on
the merits of the products and services so promoted. Google is one of the more
prominent search engines. It must respect the simple principle of equal treatment in its
search results for its comparison and rival shopping products. Google has to apply the
same processes and methods to position and display rival comparison-shopping services
in Google's search results pages as it gives to its comparison-shopping service.6
2. Refusal to supply: When a dominant tomato supplier refuses to supply tomatoes to
specific competitors without a valid justification, for example, not wanting to provide
1
Richard Pomfret, The Economic Integration of Europe (Harvard University Press, 2021), 58.
2
Ibid., 58.
3
Ibid., 42-43.
4
Article 102 TFEU
5
Stephen Wilks, Competition Policy Defending the Economic Constitution (Oxford: Oxford University
Press eBooks, 2017), 149.
6
European Commission, Antitrust: Commission Fines Google €2.42 Billion for Abusing Dominance as
Search Engine by Giving Illegal Advantage to Own Comparison Shopping Service – Factsheet, June
17, 2017.
Week 2, question 1: What factors have contributed to the creation of the Single Market?
Discuss the concept of abuse of market power within the European Union (EU) competition
framework. Define what constitutes abuse of market power and provide examples of
behaviors that may be considered as such under EU competition law. Furthermore, analyse
the legal and economic rationales behind prohibiting abuse of market power.
Contributions to the creation of the single market
1. Economic Integration: One of the primary objectives of removing the barriers was the
free movement of goods, services, capital and labour. “An area without internal frontiers
in which the free movement of goods, persons, services and capital is ensured.”1 The
single market was to harmonise laws and regulatory standards to create a level playing
field for businesses and encourage competition. Eliminating customs duties and other
trade barriers facilitated the flow of goods across borders, promoting trade and economic
growth.
2. The white paper: The Commission, which was led by Jacque Delors, released
“Completing the Internal Market”, which was made up of three chapters and 300 specific
proposals that needed to be implemented to complete the internal market. This legislation
was the Single European Act (SEA) that was released in 1986. 2
3. Eurosclerosis: In the 1970s, a pattern of economic stagnation in Europe may have
resulted from government over-regulation and overly social benefits policies. This
stagnation ended the post-war economic expansion period from 1945 to 1973. In 1973,
the first oil crisis hit; in 1971, Bretton Woods collapsed, and the inflation was high. This all
resulted in a period of stagnation and inflation in the economy. In the 1980s crisis, the
American Central Bank launched an anti-inflationary policy with high-interest rates, which
caused an unemployment crisis. 3
Abuse of market power
Abuse of market power is defined in Article 102 of The Treaty on The Functioning of The
European Union (further mentioned as TFEU); this article prohibits “any abuse by one or
more undertakings of a dominant position within the common market”.4 This article is aimed
at monopolies/oligopolies because they contain a big part of the market, so if they were to
abuse their power, that would make a lot of impact. When there is a case of illegal abuse, the
Commission can fine, cease or break up companies by forcing them to sell.5 These are two
examples of abuse of market power:
1. Discriminatory practices: Judgment of the General Court in Case T-604/18 | Google
and Alphabet v Commission (Google Android): Google's Universal Search algorithm
promoted Google's own products in search engine results pages and demoted links to
competing for comparative shopping services and deprived end users of competition on
the merits of the products and services so promoted. Google is one of the more
prominent search engines. It must respect the simple principle of equal treatment in its
search results for its comparison and rival shopping products. Google has to apply the
same processes and methods to position and display rival comparison-shopping services
in Google's search results pages as it gives to its comparison-shopping service.6
2. Refusal to supply: When a dominant tomato supplier refuses to supply tomatoes to
specific competitors without a valid justification, for example, not wanting to provide
1
Richard Pomfret, The Economic Integration of Europe (Harvard University Press, 2021), 58.
2
Ibid., 58.
3
Ibid., 42-43.
4
Article 102 TFEU
5
Stephen Wilks, Competition Policy Defending the Economic Constitution (Oxford: Oxford University
Press eBooks, 2017), 149.
6
European Commission, Antitrust: Commission Fines Google €2.42 Billion for Abusing Dominance as
Search Engine by Giving Illegal Advantage to Own Comparison Shopping Service – Factsheet, June
17, 2017.
