Journal of European Competition Law & Practice, 2019
Legal Tests in EU Competition Law: Taxonomy
and Operation
Pablo Ibáñez Colomo*
I. Introduction
The Court of Justice (hereinafter, the ‘Court’, or the
‘ECJ’) defines the conditions under which practices are
in principle prohibited or allowed. These conditions
form the legal test to establish liability under Articles
101 and/or 102 TFEU. There is not a unique legal test
in EU competition law. Some practices are deemed
unlawful without it being necessary to establish their
effects. This is the case, just to mention the most obvi-
ous example, of cartel arrangements.1 Other practices
are deemed prima facie lawful. For instance, quantity
rebates fall in principle outside the scope of Article 102
TFEU.2 There are, finally, practices that lie in between
the prima facie lawful and the prima facie unlawful. In
such cases, it is necessary to show, at the very least, that
the behaviour under consideration has, or is likely to
have, a negative impact on competition in the specific
factual and regulatory circumstances in which it is
implemented.3
Even though it is clear from the case law that the
legal tests to establish liability vary from one practice to
another, this reality is not always acknowledged, or not
studied systematically. As a result, questions about the
boundaries between the various legal tests often arise in
relation to new cases or new factual scenarios. In fact,
even the legal test that applies to well-known categories
of conduct is occasionally a source of uncertainty or
debate. Suffice to mention an example in this sense. The
Court ruled – in Deutsche Telekom and TeliaSonera –
that a ‘margin squeeze’ is only caught by Article 102
TFEU where it has, or is likely to have, anticompetitive
effects. However, statements repeating this established
aspect of the case law attract the attention of commen-
tators, as if they were controversial or as if the question
had not been unambiguously settled.4 Against this back-
ground, one of the objectives of the paper is to draw the
* London School of Economics and College of Europe. E-mail: P.Ibanez-
Colomo@lse.ac.uk. I am also a Joint General Editor of the Journal
European Competition Law & Practice. I am grateful to Martin Farley
and Andriani Kalintiri for their comments on a previous version of this
article. In accordance with the ASCOLA declaration of ethics, I am happy
to clarify that I have nothing to disclose.
1 The legal status of cartels as restrictive by object was clear from the
outset. See in this sense Case 57/69 Azienda Colori Nazionali – ACNA
SpA v Commission, EU:C:1972:78, paras 84–85.
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Key Points
• There is not a unique legal test in EU competition
law. There is conduct that is prima facie unlawful
irrespective of its effects, and conduct that is lawful.
In between, some practices are prohibited where
actual or likely effects can be shown.
• This paper seeks to map the various tests by which
conduct is assessed under Articles 101 and 102
TFEU and to explain the rationale and operation in
practice of these tests.
• The analysis explains, inter alia, how firms can
rebut the presumption that practices are capable of
having restrictive effects in light of the relevant eco-
nomic and legal context of which they are a part.
• The paper also explains why indispensability is an
element of the legal test in the context of some
practices (for instance, refusals to deal) but not
others (for instance, ‘margin squeeze’ and tying
conduct). In this sense, it is submitted that, as the
law stands, the nature of the remedy determines the
application of one test or the other.
map of the existing legal tests, and to clarify where each
of the practices stands along a spectrum ranging from
those deemed prohibited irrespective of their effects and
those deemed lawful. A second objective is to explain
the operation of these tests – that is, how they work in
practice.
Third, this paper seeks to explain the logic behind the
application of a legal test to specific practices. What
explains that a given practice is deemed unlawful irre-
spective of its impact on competition and another is
deemed lawful? To use a concrete example: why is it
that an outright refusal to deal appears to be abusive
2 Case 85/76 Hoffmann-La Roche & Co. AG v Commission, EU:C:1979:36,
paras 89–90.
3 See for instance Case C-234/89 Stergios Delimitis v Henninger Bräu AG,
EU:C:1991:91 and Case C-280/08 P Deutsche Telekom AG v Commission,
EU:C:2010:603.
4 Henry Vane, ‘Margin squeeze proof requires effects, says ECJ official’
Global Competition Review (London, 30 October 2014).
2 of 15 ARTICLE
only where the relevant input is indispensable and such
a condition does not seem to apply to ‘margin squeeze’
conduct? Addressing these questions is helpful not only
because it makes it easier to navigate the case law, but
also because it helps tackle the challenges raised by new
practices. It is not unusual that more than one legal test
is seen as potentially applicable to a factual scenario that
does not fit neatly into existing categories. For instance,
a new practice may be simultaneously seen as analogous
to a ‘margin squeeze’ but also analogous to an outright
refusal to deal. Making sense of the rationale behind the
case law helps identify the most reasonable approach to
the assessment of conduct for which there are no prece-
dents unambiguously supporting a particular outcome.
This exercise, it is submitted, is valuable for several
reasons, in particular at this juncture. First, mapping the
case law, explaining its practical operation and uncover-
ing its underlying rationale all contribute to the clarity,
predictability and consistency of the law. The exercise is
crucial, in other words, to ensure that like practices are
treated alike and, by the same token, to avoid arbitrary
decision-making. The legal test that applies to a given
practice does not and should not depend on the way it
is labelled (whether by a firm or a competition author-
ity), but on the underlying issues to which it gives rise,
and on the extent to which these issues are comparable
to one or more of the potentially applicable precedents.
The Court has consistently made clear that it is sub-
stance, not form, that matters in relation to the inter-
pretation of EU competition law provisions. Concerning
conduct potentially falling within the scope of Article
101 TFEU, for instance, the ECJ has consistently held
that the legal status of agreements depends on their
nature, which is to be assessed in light of the economic
and legal context of which they are a part.5 Second, this
article comes at a time when some recent developments
in the field, which sometimes involve practices for
which there are no clear-cut precedents, have revealed
gaps in the literature.
The remainder of this piece is organised as follows.
Section 2 presents the variety of legal tests that exists in
the case law and maps the various practices along a
spectrum. Section 3 seeks to explain why some practices
are deemed prima facie unlawful irrespective of their
effects and to shed light on the practical operation of
this legal test (in particular on the instances in – and
5 See in this sense Case C‑32/11 Allianz Hungária Biztosító Zrt. and Others
v Gazdasági Versenyhivatal, EU:C:2013:160, para 36; Case C-67/13 P
Groupement des cartes bancaires v Commission, EU:C:2014:2204, para 53;
and Case C‑345/14 SIA ‘Maxima Latvija’ v Konkurences padome, EU:
C:2015:784, para 25.
6 The rule is qualified in the sense that it is always possible for the parties
to bring forward evidence showing that, even though the agreement is
Journal of European Competition Law & Practice, 2019
the conditions under – which firms involved in these
practices can escape the prohibition). Section 4, in turn,
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moves to the opposite end of the spectrum, with a view
to clarifying why some practices are deemed compatible
with Articles 101 and/or 102 TFEU (and how a claimant
or authority can show that they should be prohibited in
the specific circumstances of a case). Finally, Section 5
tackles the practices the legality of which is contingent
on a case-by-case assessment of their effects on compe-
tition. In particular, this last section purports to explain
why indispensability is a condition in relation to some –
but not all – conduct.
II. The variety of legal tests in EU
competition law
A. The spectrum of legal tests: from the prima
facie unlawful to the prima facie lawful
The legal tests to establish liability under Articles 101
and 102 TFEU fall somewhere along a spectrum,
depicted in Fig. 1. As shown, there is conduct that is
prima facie unlawful irrespective of its effects on compe-
tition. These are practices, in other words, that are sub-
ject to a (qualified) prohibition rule.6 Accordingly,
evidence that these practices have been implemented is
in principle sufficient for them to be caught by Articles
101 and/or 102 TFEU. The example of cartels, men-
tioned in the introduction, is one that comes to mind
immediately, but is not the only one. In Intel, the Court
reasserted the principle laid down in Hoffmann-La
Roche, whereby exclusivity agreements and rebates con-
ditional upon exclusivity are prohibited by their very
nature under Article 102 TFEU.7 Conversely, there are
practices that are deemed compatible with the above-
mentioned provisions (that is, practices subject to a
legality rule). Under certain conditions, selective distri-
bution and franchising fall outside the scope of Article
101(1) TFEU and are thus not prohibited, whether by
object or effect.
In between these two ends of the spectrum, there is
conduct that is neither prohibited by its very nature nor
prima facie lawful. As far as these practices are con-
cerned, a claimant or authority would have to show not
only that they have been implemented, but that they
have, or are likely to have, a negative impact on
caught by Article 101(1) TFEU, it fulfils the conditions laid down in
Article 101(3) TFEU. Similarly, it is always possible for a dominant firm
to bring forward evidence showing that its behaviour is objectively
justified or that the efficiencies it generates are sufficient to outweigh its
(actual or likely) anticompetitive effects.
7 Hoffmann-La Roche (n 2), paras 89–90.
Pablo Ibáñez Colomo . Legal Tests in EU Competition Law
Fig. 1: Spectrum of legal tests in EU Competition Law.
competition in the specific context in which they are
implemented. Practices subject to a case-by-case evalu-
ation of their anticompetitive effects are, in principle, in
the middle of the spectrum. However, legal tests can be
calibrated to bring these practices closer to one or the
other ends of the spectrum. For instance, a court may
introduce additional conditions that go beyond a trad-
itional analysis of effects. As a result, evidence of the
likely impact of a practice on competition would no
longer suffice to trigger liability. Conversely, they may
rely on filters and proxies that move the legal test in the
opposite direction, in the sense that they may dispense
claimants or authorities from the need to engage in a
full-blown analysis of anticompetitive effects.
B. The spectrum of legal tests under Article 101
(1) TFEU
As the law stands, the spectrum of legal tests under
Article 101 TFEU is relatively straightforward. At one
end of the spectrum (depicted in Fig. 2), there are three
broad categories of practices that are subject to a pro-
hibition rule, and thus prima facie unlawful irrespective
of their effects. This is conduct that is deemed to have
as its object the restriction of competition. The first cat-
egory is that of cartel arrangements. The second com-
prises agreements aimed at limiting or eliminating
cross-border trade within the EU, and in particular
agreements giving absolute territorial protection to a
distributor8 and agreements hindering distributors’ abil-
ity to resell the contractual goods in other Member
States.9 Finally, vertical price-fixing is deemed restrictive
of competition by its very nature, as the Court expressly
held in Binon.10
There are other practices that are not restrictive of
competition, whether by object or effect, and thus sub-
ject to a legality rule. Some of these agreements have
been mentioned above. In Metro I, the Court clarified
that, under certain conditions, qualitative selective
8 Joined Cases 56/64 and 58/64 Établissements Consten S.à.R.L. and
Grundig-Verkaufs-GmbH v Commission, EU:C:1966:41.
9 Joined Cases C-501/06 P, C-513/06 P, C-515/06 P and C-519/06 P
GlaxoSmithKline Services Unlimited v Commission, EU:C:2009:610.
10 Case 243/83 SA Binon & Cie v SA Agence et messageries de la presse, EU:
C:1985:284.
11 Case 26/76 Metro SB-Großmärkte GmbH & Co. KG v Commission, EU:
C:1977:167 (‘Metro I’). These conditions were further confirmed in, inter
alia, Case C-439/09 Pierre Fabre Dermo-Cosmétique SAS v Président de
l’Autorité de la concurrence and Ministre de l’Économie, de l’Industrie et
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distribution systems fall outside the scope of Article 101
(1) TFEU altogether.11 In Pronuptia, it ruled that
clauses that are ‘strictly necessary’ to preserve the know-
how and the uniformity and reputation of a franchise
are not restrictive of competition, whether by object or
effect.12 These two cases are manifestations of a broader
doctrine (the so-called ancillary restraints doctrine),
according to which clauses in an agreement that are
objectively necessary to attain its (pro-competitive) aims
– and thus ancillary to them – are not caught by Article
101(1) TFEU.
Finally, there are practices that are only prohibited
under Article 101(1) TFEU where a claimant or author-
ity can show, to the requisite legal standard, that they
have, or are likely to have, restrictive effects on competi-
tion. The leading example in this sense is Delimitis. In
that case, the Court ruled that exclusive dealing agree-
ments are not prohibited by their very nature.
Accordingly, they are only caught by Article 101(1)
TFEU where it can be shown that access to the market
is foreclosed to new entrants and, in addition, that the
bundle of agreements under consideration makes an
appreciable contribution to foreclosure. The same test
applies to practices having a similar nature and objective
purpose, in particular the arrangements at stake in
Maxima Latvija.13 The analysis of effects also featured
prominently in cases like Cartes Bancaires14 – where the
Court concluded that it was inappropriate to categorise
the practice as a ‘by object’ infringement – and
MasterCard.15
C. The spectrum of legal tests under Article 102
TFEU
In the context of Article 102 TFEU, there are practices
that are subject to a prohibition rule. The legal treat-
ment given to such conduct is not dissimilar to that
given to agreements prohibited by object under Article
101(1) TFEU. Exclusionary practices that amount,
de l’Emploi, EU:C:2011:649; and Case C-230/16 Coty Germany GmbH v
Parfümerie Akzente GmbH, EU:C:2017:941.
12 Case 161/84 Pronuptia de Paris GmbH v Pronuptia de Paris Irmgard
Schillgallis, EU:C:1986:41, paras 16–17.
13 Maxima Latvija (n 5), paras 25–29.
14 Cartes Bancaires (n 5). See also Case T-491/07 RENV Groupement des
cartes bancaires v Commission, EU:T:2016:379.
15 Case T-111/08 MasterCard, Inc. and Others v Commission, EU:
T:2012:260; and Case C-382/12 P MasterCard Inc. and Others v
Commission, EU:C:2014:2201.
4 of 15 ARTICLE
Fig. 2: Spectrum of legal tests in the context of Article 101(1) TFEU.
prima facie, to an abuse of dominance irrespective of
their effects comprise exclusivity agreements and rebate
schemes having an equivalent object or effect, including
rebates conditional upon exclusivity or quasi-
exclusivity16 and rebate schemes that set individual tar-
gets corresponding to the customers’ needs.17 It is clear
from Hilti, Tetra Pak II and Microsoft I that tying
arrangements are also prohibited by their very nature
under Article 102 TFEU.18 Finally, it is abusive for a
dominant firm to charge prices below its average vari-
able costs (or to sell below average total costs as part of
an exclusionary strategy).19
At the other end of the spectrum, as shown in Fig. 3,
there is conduct that is subject to a legality rule, and
thus deemed prima facie lawful even when implemented
by a dominant firm. The category comprises, first, quan-
tity rebates, that is, rebates conditional upon the volume
sold. The legality rule applies insofar as the rebates are
given in respect of each individual order and reflect the
cost savings made by the dominant supplier.20 In such
instances, liability can only be established if the author-
ity or the claimant can show that the rebates given bear
no relationship with the economies of scale made by the
dominant firm.21 Second, it is not abusive for a domin-
ant firm to price aggressively (whether it does so select-
ively or across the board) provided that the prices
charged remain above average total costs.22 As a matter
of principle, equally efficient rivals would be able to
match such prices, as they would not force them to sell
at a loss.23
The spectrum of exclusionary behaviour subject to
an analysis of effects is richer in the context of Article
102 TFEU. There are, first, practices that are only
16 Hoffmann-La Roche (n 2), paras 89–90.
17 Case 322/81 NV Nederlandsche Banden Industrie Michelin v Commission,
EU:C:1983:313 (‘Michelin I’); and Case C-95/04 P, British Airways plc v
Commission, EU:C:2007:166.
18 Case T-30/89 Hilti AG v Commission, EU:T:1991:70, paras 99–101; Case
T-83/91 Tetra Pak International SA v Commission, EU:T:1994:246 (‘Tetra
Pak II’), para 135; and Case T-201/04 Microsoft Corp v Commission, EU:
T:2007:289 (‘Microsoft I’), para 1054.
19 Case C-62/86 AKZO Chemie BV v Commission, EU:C:1991:286, para
71–72.
20 Case C-23/14 Post Danmark A/S v Konkurrencerådet, EU:C:2015:651
(‘Post Danmark II‘), para 28.
21 See in this sense Case C-163/99 Portugal v Commission, EU:C:2001:189,
paras 52–53; and Case T-203/01 Manufacture française des pneumatiques
Michelin v Commission, EU:T:2003:250 (‘Michelin II’), paras 58–60.
Journal of European Competition Law & Practice, 2019
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prohibited when it can be shown that they have, or are
likely to have, anticompetitive effects. Such practices are
subject to an analysis that is in every way similar to that
laid down in Delimitis. This test is referred to herein-
after as the ‘standard effects’ test. To begin with, the
Court clarified in Deutsche Telekom that a ‘margin
squeeze’ that forces an equally efficient rival to sell at a
loss on the relevant downstream market is not abusive
in itself.24 Accordingly, it is necessary to consider the
economic and legal context in which the practice is
implemented, including factors such as the extent of the
dominant position as well as the features of the product
and of the relevant market. Evidence that the input at
stake in a case is indispensable for downstream rivals to
compete can be taken into consideration in this
regard.25 Where a standardised rebate scheme is neither
purely conditional on volume nor on exclusivity, liabil-
ity is also contingent on an analysis of its likely impact
on competition. As explained in Post Danmark II, fac-
tors such as the coverage of the practice and the length
of the obligations are of particular relevance in the
analysis.26
There are practices that are subject to what is
referred to hereinafter as an ‘enhanced effects’ test, by
which it is meant that the standard analysis described
above does not, alone, suffice to establish liability.
Conduct evaluated under ‘enhanced effects’ test is clo-
ser in the spectrum to practices deemed prima facie
lawful. As shown in Fig. 4, one can identify two add-
itional points at the right end of the spectrum. One can
identify, first, cases where prima face liability is contingent
on evidence showing that the input to which access is
requested is indispensable to compete on a neighbouring
22 This is implicit from AKZO (n 19), paras 70–71. The point was
confirmed in Case C-209/10 Post Danmark A/S v Konkurrencerådet, EU:
C:2012:172 (‘Post Danmark I’), in particular paras 22, 30 and 33.
23 See in particular Post Danmark I (n 22), para 38 (‘to the extent that a
dominant undertaking sets its prices at a level covering the great bulk of
the costs attributable to the supply of the goods or services in question, it
will, as a general rule, be possible for a competitor as efficient as that
undertaking to compete with those prices without suffering losses that
are unsustainable in the long term’) and Post Danmark II (n 20), para 66.
24 Deutsche Telekom (n 3), para 250.
25 Ibid, para 255.
26 Post Danmark II (n 20), paras 39–46.
Pablo Ibáñez Colomo . Legal Tests in EU Competition Law
Fig. 3: Spectrum of legal tests in the context of Article 102 TFEU.
Fig. 4: The ‘enhanced effects’ test in the context of Article 102 TFEU.
market.27 According to the Court in Bronner, indispens-
ability is an element of the relevant legal test in instances
where a vertically integrated firm withdraws access to a
physical input or refuses to deal with a would-be rival on
a neighbouring market.28 Such is the case, for instance,
where a dominant firm decides to stop supplying a raw
material to a customer once it decides to start manufac-
turing the final product itself (the issue at stake, for
instance, in Commercial Solvents).29 Such is also the case,
Bronner implies, where a newspaper publisher requests
access to a delivery service.30
Second, there are instances where evidence of indis-
pensability is as such insufficient to establish liability.
These instances include – at the very least – factual
scenarios where the relevant input is an intangible asset
protected by intellectual property rights.31 Accordingly,
a refusal to license a copyright or a patent is abusive not
simply because the relevant input is indispensable
within the meaning of Bronner, but also because, in
addition, the refusal prevents the emergence of a new
product for which there is potential consumer
demand.32 There is not much guidance in the case law
concerning the boundaries of this ‘new product’ condi-
tion. It would seem from the Magill case, in any event,
that a new product is one that places a competitive
27 See in particular Joined Cases 6 and 7/73 Istituto Chemioterapico Italiano
S.p.A. and Commercial Solvents Corporation v Commission, EU:
C:1974:18; Case 311/84 Centre belge d’études de marché - Télémarketing v
SA Compagnie luxembourgeoise de télédiffusion and Information publicité
Benelux, EU:C:1985:394; and Case C-7/97 Oscar Bronner GmbH & Co.
KG v Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co. KG,
Mediaprint Zeitungsvertriebsgesellschaft mbH & Co. KG and Mediaprint
Anzeigengesellschaft mbH & Co. KG, EU:C:1998:569
28 Bronner (n 27), paras 38–41.
29 Commercial Solvents (n 27) and CBEM-Télémarketing (n 27).
30 Bronner (n 27), para 41.
31 Joined Cases C-241/91 P and C-242/91 P Radio Telefis Eireann (RTE) and
Independent Television Publications Ltd (ITP) v Commission, EU:
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constraint on existing products but that, vice versa, is
not constrained by them.33
The legal tests in Bronner (which required indispens-
ability to trigger liability) and Magill (which required, in
addition to indispensability, evidence that the refusal pre-
vents the emergence of a new product) are different from
the ‘standard effects’ test endorsed in Deutsche Telekom
and Post Danmark II in another respect. Under the test
laid down in the latter two judgements, it is sufficient to
show that the anticompetitive effects are likely. It would
appear that it would be enough to establish that such
effects are ‘more likely than not’ to occur.34 The probabil-
ity of harm occurring, in other words, would be at >50%.
The threshold in Bronner and Magill, on the other hand,
is set at a higher level. The test laid down in the two cases
suggests that establishing that anticompetitive effects are
‘more likely than not’ to occur is not enough. Bronner
and Magill, together with IMS Health, make it clear that
liability requires evidence that the refusal would lead to
the elimination of ‘all competition’ on the relevant down-
stream market. This vocabulary – when considered
together with the indispensability condition – suggests
that intervention is only justified where it can be shown
that anticompetitive effects are certain or virtually certain
to occur in the event of a refusal.35
C:1995:98 (‘Magill’). The question of whether intangible property that is
not protected by intellectual property rights would be subject to the same
test is an open question. The issue was discussed in Microsoft (n 18),
paras 283–290.
32 Magill (n 31), para 54. See also Case C-418/01 IMS Health GmbH & Co.
OHG v NDC Health GmbH & Co. KG, EU:C:2004:257, paras 48–49.
33 For a discussion of this question, see Robert O’Donoghue and Jorge
Padilla, The Law and Economics of Article 102 TFEU (2nd edn, Hart
Publishing 2013) 559–562.
34 See in this sense Opinion of AG Kokott in Case C-23/14 Post Danmark
A/S v Konkurrencerådet, EU:C:2015:343, para 82.
35 For an extensive analysis of this question, see Pablo Ibáñez Colomo, The
Shaping of EU Competition Law (Cambridge University Press 2018).
6 of 15 ARTICLE
III. Prima facie unlawfulness: rationale
and operation
A. The rationale behind the case law
As a matter of principle, practices are prima facie pro-
hibited irrespective of their effects where two cumulative
conditions are fulfilled. In the first place, the application
of a prohibition rule is considered appropriate in rela-
tion to practices that are deemed to have no plausible
pro-competitive object. These are instances, in other
words, where the restriction of competition is the only
plausible rationale of the behaviour under consideration.
There are several cases where the Court was explicit on
this point. In Hoffmann-La Roche, for instance, it took
the view that exclusive dealing, as well as rebates condi-
tional upon exclusivity, ‘are not based on an economic
transaction which justifies this burden or benefit but are
designed to deprive the purchaser of or restrict his pos-
sible choices of sources of supply’.36 In other words, the
Court suggested that the only purpose of such conduct
is to foreclose competition. AKZO is equally explicit. In
that case, the Court discussed the rationale behind the
prima facie prohibition, by its very nature, of pricing
below average variable costs. It explained that pricing at
such a level is in principle irrational for an undertaking.
Accordingly, such a profit sacrifice can only be plausibly
rationalised as part of a strategy to drive its rivals out of
the market.37 Similarly, the EU courts typically assumed
that tying has no purpose other than the exclusion of
competition.38
There are two main exceptions to this principle.
Thus, some practices are prohibited under Articles 101
(1) and 102 TFEU even though they have a plausible
pro-competitive object. This alternative line of case law
is relevant, first, when the integration of Member States’
economies is at stake. In such circumstances, practices
are prima facie unlawful irrespective of their effects
where it can be shown that the means used to achieve
the object of the agreement restrict cross-border trade.
Thus, it would be irrelevant, for instance, that an agree-
ment giving absolute protection to a distributor is a
plausible means to achieve a pro-competitive aim.39 The
36 Hoffmann-La Roche (n 2), para 90.
37 AKZO (n 19), para 71
38 See in particular Tetra Pak II (n 18), para 135.
39 See in this sense Opinion of AG Roemer in Joined Cases 56/64 and 58/64
Établissements Consten S.à.R.L. and Grundig-Verkaufs-GmbH v
Commission, EU:C:1966:19.
40 Joined Cases C-468/06 to C-478/06 Sot. Lélos kai Sia EE and Others v
GlaxoSmithKline AEVE Farmakeftikon Proïonton, formerly
Glaxowellcome AEVE, EU:C:2008:504.
41 Binon (n 10), para 42.
42 Ibid, para 46.
Journal of European Competition Law & Practice, 2019
fact that the agreement would completely insulate the
distributor from intra-brand competition would be suf-
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ficient, in and of itself, to trigger the prima facie prohib-
ition. The same would be true where a dominant firm
refuses to meet ordinary orders from its wholesalers
with a view to restricting cross-border trade.40 Second,
resale price maintenance is restrictive of competition by
object, even though its plausible pro-competitive bene-
fits were explicitly acknowledged by the Court in
Binon.41 As the law stands, such pro-competitive bene-
fits can only be invoked under Article 101(3) TFEU.42
In the second place, the prohibition rule applies only
where it is at least plausible that a restriction would
result from the implementation of the practice.
Conduct, in other words, is only prima facie unlawful
irrespective of its impact if it is at least capable of having
anticompetitive effects. This is true not only of practices
that are examined in accordance with the default condi-
tion described above but also of practices that depart
from it – that is, resale price maintenance and restric-
tions to cross-border trade. The case law suggests that
the capability threshold is relatively low. Accordingly, a
practice can be prima facie prohibited by its very nature
even when the anticompetitive effects are not particu-
larly likely, provided that the lessons of experience and
economic analysis do not suggest that a restriction is
implausible.43 In T-Mobile, for instance, the Court con-
cluded that the plausibility threshold could be met even
though the practice involved a single meeting in which
competitors exchanged sensitive information.44
Similarly, tying is prima facie unlawful under Article
102 TFEU even when it can be shown that rivals thrive
on the market and have other means to reach consu-
mers.45 The mere fact that tying gives the dominant
firm’s product a competitive advantage is sufficient to
trigger the prohibition.46
The fact that some behaviour is subject to the prima
facie prohibition only where anticompetitive effects are
plausible does not mean that an authority or a claimant
must establish, on a case-by-case basis, that such prac-
tices are capable of having a restrictive impact. As
already pointed out, they can discharge their burden of
43 See in this sense Ioannis Lianos, ‘Judging’ Economists: Economic
Expertise in Competition Law Litigation’ in Ioannis Kokkoris and Ioannis
Lianos (eds), The Reform of EC Competition Law: New Challenges
(Kluwer 2010).
44 Case C-8/08 T-Mobile Netherlands BV, KPN Mobile NV, Orange
Nederland NV and Vodafone Libertel NV v Raad van bestuur van de
Nederlandse Mededingingsautoriteit, EU:C:2009:343, para 31.
45 Microsoft I (n 18), para 1054.
46 Ibid. See also Microsoft (tying) (Case COMP/C-3/39.530) Commission
Decision of 16 December 2009 (‘Microsoft II’), para 39–46.
Pablo Ibáñez Colomo . Legal Tests in EU Competition Law
proof merely by showing that they have been imple-
mented. In this sense, the Court has consistently held
that object and effect are alternative conditions. Thus, if
it is shown that a practice has an anticompetitive object,
it need not be shown that it is capable or likely to have
restrictive effects on competition.47 This is also true in
the context of Article 102 TFEU, where the EU courts
have occasionally relied upon virtually identical vocabu-
lary to express the same idea.48 Against this back-
ground, it would seem that practices subject to a prima
facie prohibition are presumed to be at least capable of
having restrictive effects.
It is safe to presume that a practice that has no plaus-
ible purpose other than the restriction of competition is
at least capable of having anticompetitive effects. Since
such a practice would lack credible pro-competitive
benefits, a rational, profit-maximising firm can only be
expected to engage in it if the prospect of restricting
competition were at least a plausible one – in the sense
that such a prospect would be compatible with the les-
sons of experience and/or economic analysis. As
explained by the General Court in Michelin II, the two
cumulative conditions can be seen as two sides of the
same coin.49 The second cumulative condition – cap-
ability of the anticompetitive effects – can be safely
inferred from the first – the absence of a plausible pro-
competitive object. By the same token, if it appears that
the practice is incapable of having anticompetitive
effects, one can safely presume that it has a pro-
competitive object. If the restriction of competition is an
implausible outcome, then the rationale behind the con-
duct is, in all likelihood, a different one – again, one
cannot expect a profit-maximising firm to engage in a
course of action that, experience and economic analysis
suggest, it would not be able to attain.
B. Escaping the prima facie prohibition in
practice
It has been explained above that, inherent in the prima
facie prohibition there is a presumption that the
47 Case 56/65 Société Technique Minière, EU:C:1966:38, 249; T-Mobile (n
44), para 28; and Case C-286/13 P, Dole Food Company Inc. and Dole
Fresh Fruit Europe v Commission, EU:C:2015:184, paras 111–135.
48 See in particular Michelin II (n 21), paras 237–245.
49 Ibid, para 241: ‘[…] for the purposes of applying Article 82 EC,
establishing the anti-competitive object and the anti-competitive effect
are one and the same thing […]. If it is shown that the object pursued by
the conduct of an undertaking in a dominant position is to limit
competition, that conduct will also be liable to have such an effect’.
50 Joined Cases C-403/08 and C-429/08 Football Association Premier League
Ltd and Others v QC Leisure and Others and Karen Murphy v Media
Protection Services Ltd, EU:C:2011:631.
ARTICLE 7 of 15
practice under consideration is at least capable of
restricting competition. The Court has made clear –
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in Murphy,50 in relation to Article 101 TFEU, and in
Intel,51 in relation to Article 102 TFEU – that firms can
rebut this presumption by bringing forward evidence
showing that the behaviour is incapable of restricting
competition – in other words, that anticompetitive
effects are implausible in the economic and legal context
of which it is a part. In essence, the rebuttal consists of
showing that the behaviour is not capable of restricting
competition that would have existed in its absence.52 It
is clear from both Murphy and Intel that this analysis is
independent of that undertaken under Article 101(3)
TFEU and of the possibility of advancing an objective
justification and/or efficiency claims in the context of
Article 102 TFEU.53
There are essentially two ways in which the rebuttal
of the presumption of capability can take place in prac-
tice. First, firms can show that any actual or potential
effects on competition would not be attributable to their
behaviour. The absence of a causal link between the
practice and its effects can be established, to begin with,
by reference to the relevant legal context. There are
instances in which anticompetitive effects are implaus-
ible due to the fact that any scope for competition is
already restricted by the relevant regulatory framework.
It may be the case, for instance, that the legal regime
gives – de iure or de facto – exclusive rights to a par-
ticular firm. In such circumstances, any practice aimed
at restricting entry on the relevant market is incapable
of restricting competition that would otherwise have
existed. This is, in essence, the scenario at stake in E.On
Ruhrgas.54 Similarly, a firm may be able to show that
market entry would be implausible, with and without
the practice, by virtue of the intellectual property regime
in place. Such was the scenario at stake in Coditel II.55
In that case, what precluded the cross-border provision
of services was not the agreement granting an exclusive
territorial licence, but the copyright system, which gave
the right holder (and, crucially, the exclusive licensee)
the right to authorise or prohibit any communication
51 Case C-413/14 P Intel Corp v Commission, EU:C:2017:632.
52 In Société Technique Minière (n 47), 250, the Court explained that the
notion of competition ‘must be understood within the actual context in
which it would occur in the absence of the agreement in dispute’.
53 Murphy (n 50), paras 140 and 145; and Intel (n 50), para 140.
54 Case T-360/09, E.ON Ruhrgas AG and E.ON AG v Commission, para 104.
See also Case T-370/09, GDF Suez SA v Commission, para 97.
55 Case 262/81 Coditel SA, Compagnie générale pour la diffusion de la
télévision, and others v Ciné-Vog Films SA and others, EU:C:1982:334
(‘Coditel II’).
8 of 15 ARTICLE
to the public taking place in the Member State in
question.56
More generally, it is possible for firms to show that
harm to competition is implausible in light of the prac-
tice and the features of the relevant market. This is the
important clarification introduced by the Court in Intel.
As explained above, the principle whereby exclusive
dealing and rebates conditional upon exclusivity are pri-
ma facie prohibited irrespective of their effects was
upheld. On the other hand, the Court clarified that,
when a firm brings forward evidence57 showing that the
practice is incapable of having anticompetitive effects,
the Commission cannot simply dismiss this evidence. It
must examine the factors identified in cases like
Deutsche Telekom and Post Danmark II, and in particu-
lar, the extent of the dominant position, the coverage of
the practice as well as the precise features of the practice
(including the length of the obligations).
The Intel case provides an illustration of the sort of
evidence that may be advanced by a firm in this regard.
At stake in that case was the question of whether a
dominant firm can invoke the so-called ‘as efficient
competitor’ test (hereinafter, the ‘AEC test’) to show
that a rebate scheme is incapable, or unlikely, to have
anticompetitive effects.58 The AEC test seeks to ascer-
tain whether the rebate scheme put in place by the dom-
inant supplier would force an equally efficient rival to
sell its products below cost.59 A key premise behind the
test is that above-cost prices are incapable of driving
equally efficient rivals out of the market. Accordingly,
any anticompetitive effects of a scheme that does not
force rivals to sell at a loss would not be attributable to
it, but to rivals’ inefficiency. And, as the Court has con-
sistently held, Article 102 TFEU is not concerned with
the exclusion of rivals that are less efficient than the
dominant firm,60 or at least not in principle.61 Thus, the
AEC test can be, in a particular economic and legal
context, a powerful indicator that there is no causal
56 This point was clarified in a prior ruling relating to the same set of facts.
See Case 62/79 SA Compagnie générale pour la diffusion de la télévision,
Coditel, and others v Ciné Vog Films and others, EU:C:1980:84.
57 The level of the evidence that needs to be provided remains unclear at
present. There are reasons to believe that it is sufficient that this evidence
has an ‘air of reality’ to require the Commision to engage in an
assessment of the capability of the practice having restrictive effects. See
in this sense Pablo Ibáñez Colomo, ‘The Future of Article 102 TFEU after
Intel’ (2018) 9 Journal of European Competition Law & Practice 293.
58 For an overview of the questions, see the arguments of the parties in Intel
(n 51), paras 108–128 as well as Opinion of AG Wahl in Case C-413/14 P
Intel Corp v Commission, EU:C:2016:788. The applicability of the AEC
test gave rise to considerable controversy among commentators in the
context of the Intel case. See in particular Wouter PJ Wils, ‘The Judgment
of the EU General Court in Intel and the So-Called More Economic
Approach to Abuse of Dominance’ (2014) 37 World Competition 405;
Journal of European Competition Law & Practice, 2019
link between any actual or potential effects and the
practice.62
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Second, it is possible for firms to show that anticompe-
titive effects are implausible in light of the fact that a
practice is objectively necessary to attain a pro-
competitive aim and thus it is only capable of creating,
rather than restricting, competition. This idea was already
present in Société Technique Minière.63 In that case, the
Court explained that, if a restraint is really necessary for
a supplier to enter a new market, the said practice is not
capable of restricting competition that would otherwise
have existed.64 The Guidelines on vertical restraints elab-
orate on this point, and provide a concrete example of
the sort of evidence that firms can put forward. As
explained above, practices aimed at restricting cross-
border trade are prima facie prohibited under Article 101
(1) TFEU. This category includes clauses aimed at limit-
ing distributors’ ability to engage in passive selling. The
Commission explains in the abovementioned Guidelines,
however, that even distribution agreements restricting
passive sales can escape the prohibition where, given the
substantial investments required, the practice is object-
ively necessary for a supplier to enter a new market.65
There is no case law explicitly dealing with this question
in the context of Article 102 TFEU. However, there seems
to be no reason to rule out the possibility for a dominant
firm to avoid a prima facie prohibition by showing, against
the relevant counterfactual, that their practice is objectively
necessary to attain a pro-competitive aim. Several reasons
can be advanced in this regard. First, this possibility is argu-
ably implicit in Intel. Establishing that a practice is object-
ively necessary is indeed another way of showing that it is
incapable of restricting competition. Second, excluding this
possibility in the context of Article 102 TFEU but allowing
it under Article 101 TFEU would lead to an inconsistency
that would not be easy to justify. Finally, one cannot ignore
the fact that the analysis of effects in the context of Article
102 TFEU must not be ‘purely hypothetical’.66 Arguably, it
Patrick Rey and James S Venit, ‘An Effects-Based Approach to Article
102: A Response to Wouter Wils’ (2015) 38 World Competition 3.
59 Guidance on the Commission’s enforcement priorities in applying Article
82 of the EC Treaty to abusive exclusionary conduct by dominant
undertakings [2009] OJ C45/7 (hereinafter, the ‘Guidance’), paras 37–45.
60 Post Danmark I (n 22), para 22 and Intel (n 51), para 134.
61 See in this sense Post Danmark II (n 20), paras 51–62.
62 Post Danmark II (n 20), para 58 and Intel (n 51), paras 142–143.
63 Société Technique Minière (n 47), 250.
64 Ibid: ‘it may be doubted whether there is an interference with
competition if the said agreement seems really necessary for the
penetration of a new area by an undertaking’.
65 Guidelines on Vertical Restraints [2010] OJ C130/1, para 61.
66 Post Danmark II (n 20), para 65.
Pablo Ibáñez Colomo . Legal Tests in EU Competition Law
follows from this principle that the objective necessity of
the practice would inevitably have to be considered as part
of the economic and legal context of which the practice is
a part.
IV. Prima facie lawfulness: rationale
and practical operation
A. The rationale behind the case law
The discussion above is also helpful to understand why
some practices are prima facie lawful. To begin with,
there is behaviour that is deemed to fall outside the scope
of Articles 101 and 102 TFEU due to the fact that any
actual or potential effects identified would not be attrib-
utable to it. As already explained, above-cost pricing by a
dominant firm (whether applied selectively or across the
board) is in principle incapable of driving an equally effi-
cient rival out of the market. Accordingly, such behav-
iour is prima facie compatible with Article 102 TFEU.
The same is true of a ‘margin squeeze’ that would not
force equally efficient rivals to sell at a loss. In such cir-
cumstances, the downstream division of the dominant
firm would not be offering its goods or services below
cost. The prima facie legality of quantity rebates rests on
an identical premise. Where a rebate scheme reflects the
cost savings made in the context of a particular transac-
tion, any advantage resulting from it can be safely pre-
sumed to be explained by the dominant firm’s superior
efficiency alone. As such, it would be beyond reproach.
A second reason why some practices are deemed law-
ful under Articles 101 and/or 102 TFEU relates to
instances in which conduct is objectively necessary to
achieve the objectives of a pro-competitive transaction.
In their absence, the said transaction would simply not
take place and there would be less competition, not
more. This is the principle behind the so-called ancillary
restraints doctrine, mentioned above. In Metro I, the
Court acknowledged that a selective distribution system
cannot operate in the absence of some vertical
restraints, and in particular a prohibition imposed on
distributors from selling to non-members of the
67 Metro I (n 11), para 27 (‘[t]o be effective, any marketing system based on
the selection of outlets necessarily entails the obligation upon wholesalers
forming part of the network to supply only appointed resellers and,
accordingly, the right of the relevant producer to check that that
obligation is fulfilled’).
68 Pronuptia (n 12), paras 15–17 (‘[i]n order for the system to work two
conditions must be met. First, the franchisor must be able to
communicate his know-how to the franchisees and provide them with
the necessary assistance in order to enable them to apply his methods
[…]. Secondly, the franchisor must be able to take the measures
necessary for maintaining the identity and reputation of the network
bearing his business name or symbol […]’).
ARTICLE 9 of 15
network.67 Similarly, suppliers would not have recourse
to franchising agreements if they were not allowed to
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take the necessary measures to preserve their know-how
as well as the reputation and uniformity of the system.68
B. Challenging the prima facie lawfulness in
practice
It is possible for an authority or claimant to show why a
practice that is in principle lawful should be prohibited
in a given economic and legal context. One can identify
three main scenarios in this regard. To begin with, the
claimant or the authority can show why, in the specific
economic and legal context of which the practice is a
part, some of the principles underpinning the case law
should be disapplied. In particular, the Court seems to
accept that, in certain circumstances, the analysis of
effects should not be based on the position of an equally
efficient competitor. In Post Danmark II, it held that, in
the economic and legal context of the case, the AEC test
was of limited relevance to assess the lawfulness of the
practice. This is so due to the very large market share of
the dominant firm and the fact that it enjoyed structural
advantages flowing, in particular, from the protection by
exclusive rights of some of these activities.69
The claimant or the authority bear the burden of
explaining why even the exclusion of a less efficient rival
should justify intervention where the practice is prima
facie lawful. The Commission’s Guidance on exclusion-
ary abuses70 (hereinafter, the ‘Guidance’) provides some
examples of the arguments that may be advanced in this
sense. Aggressive above-cost pricing may be problem-
atic, for instance, where there are strong network effects
in a particular market.71 In such circumstances, any
competitive advantage enjoyed by the dominant firm
may have the effect of tipping the relevant market in its
favour, which may in turn justify action to prohibit pri-
ma facie lawful conduct. The legal and economic litera-
ture has explored other instances in which it may be
justified to depart from the principle whereby only the
exclusion of equally efficient competitor justifies inter-
vention under Article 102 TFEU.72
69 Post Danmark II (n 20), para 59 (‘in a situation such as that in the main
proceedings, characterised by the holding by the dominant undertaking
of a very large market share and by structural advantages conferred, inter
alia, by that undertaking’s statutory monopoly, which applied to 70% of
mail on the relevant market, applying the as-efficient-competitor test is of
no relevance inasmuch as the structure of the market makes the
emergence of an as-efficient competitor practically impossible’).
70 Guidance (n 59).
71 Ibid, para 24.
72 See for instance Aaron S Edlin, ‘Stopping Above-Cost Predatory Pricing’
(2002) 111 Yale Law Journal 941. For a general discussion, which builds
on the cited article, see US Department of Justice, Competition and
10 of 15 ARTICLE
One can think of a second scenario in which prima
facie lawful conduct could be prohibited under Articles
101 or 102 TFEU. As explained above, the status of
some practices as compatible with the said provision
relies on a series of premises. Underlying the prima facie
compatibility of quantity rebates there is the idea that
this contractual device reflects the cost savings made by
the dominant supplier in the context of an individual
transaction. Similarly, the premise behind the compati-
bility of quantitative selective distribution systems with
Article 101(1) TFEU is that some of the clauses are
objectively necessary for the operation of this distribu-
tion method. Against this background, it is possible for
a claimant or an authority to put forward evidence
showing that these underlying premises do not apply in
a particular context.
The case law provides several examples confirming
not only that this possibility is open to authorities or
claimants but also gives insights on the way in which it
may operate in practice. In Portugal v Commission, for
instance, the Commission successfully argued that, even
though the rebates applied by the State-owned airport
operator were formally contingent on volume, they had
been crafted in a way that favoured incumbent opera-
tors and were not justified by economies of scales or
other cost savings.73 The Commission advanced a simi-
lar argument in Michelin II.74 In Coty, the Court was
confronted with the question of whether some clauses
were objectively necessary for the operation of a select-
ive distribution system. More precisely, the claimant
argued that a ban on the use of online marketplaces was
not comparable to the clauses identified as prima facie
lawful in Metro I.75
There is, finally, a third scenario in which it may be
possible to establish liability in relation to a prima facie
lawful practice. This scenario does not entail a departure
from the principles of the case law, nor does it question
the premises on which the legality rule is based. Instead,
it brings forward factors relating to the economic and
legal context which do not affect, in principle, the legal
status of prima facie lawful conduct. In Metro I, the
Court clarified that it may be possible for a claimant or
an authority to bring forward considerations that are
not inherent in these practices but that may arise in a
given relevant market and may lead to them having
anticompetitive effects in the specific circumstances of
a case. For instance, even though selective distribution
systems are as such compatible with Article 101(1)
Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act
(September 2008), 58–60.
73 Portugal v Commission (n 21).
74 Michelin II (n 21), paras 237–245.
Journal of European Competition Law & Practice, 2019
TFEU, they may have a restrictive impact on competi-
tion where the cumulative implementation of parallel
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networks leads to foreclosure or to the softening of
competition among suppliers or distributors and, in
addition, the supplier under consideration makes a sig-
nificant contribution to such effects.76
V. Making sense of the ‘enhanced
effects’ test
A. The problem: the respective scope of each
legal test is unclear
It has been explained above that some practices are sub-
ject to a ‘standard effects’ test while other practices are
subject to an ‘enhanced effects’ one that requires, at the
very least, evidence that an input is indispensable to
compete on one of the relevant markets. The co-
existence of different legal tests – two of them stricter
than the standard test – is a source of uncertainty in
practice. It is not always easy to tell apart the practices
that are subject to different legal tests. This is the case,
in particular, of ‘margin squeeze’ practices, on the one
hand, and outright refusals to deal, on the other. It is
also difficult to distinguish in certain circumstances
between tying and refusal to deal. As a result of these
difficulties, there may be instances in which two or
more legal tests are seen as potentially applicable to a
factual scenario.
Consider, to begin with, the similarities between a
refusal to deal and ‘margin squeeze’ behaviour.
Typically, the two practices involve a vertically inte-
grated entity that supplies an input on which non-
integrated rivals rely to operate in a downstream mar-
ket. In such circumstances, an integrated operator with
an incentive to exclude its rivals from the downstream
market can achieve its objective in two ways. First, it
can refuse, outright, to start dealing with a would-be
rival (as in Bronner) or it can decide to discontinue,
altogether, its supplies (as in Commercial Solvents).
Second, it can refuse to give access (or stop supplying
access) in a constructive manner, that is, by dealing
with rivals on such conditions that make it impossible
for them to profitably operate on the relevant down-
stream market (at least in the long run).
Against this background, it would be reasonable to
conclude that the two scenarios (an outright and a con-
structive refusal) should be subject to the same legal
75 Coty (n 11). The argument was ultimately not successful, at least not in
the specific circumstances of the case.
76 Metro I (n 11), para 22. See also Case 75/84 Metro SB-Großmärkte GmbH
& Co. KG v Commission, EU:C:1986:399 (‘Metro II’).
Pablo Ibáñez Colomo . Legal Tests in EU Competition Law
test. This was in fact the position advanced by the
Commission in its Guidance. In that document, it pro-
posed to examine ‘margin squeeze’ practices as a par-
ticular manifestation of a refusal to deal, which would
only be prioritised by the authority where, inter alia,
there is evidence that the input in question is indispens-
able (or ‘objectively necessary’ to turn to the expression
used in the Guidance).77 The US Supreme Court
adopted a similar approach in the linkLine case, where
it refused to recognise ‘margin squeeze’ as a distinct cat-
egory of exclusionary conduct. In his opinion, Justice
Roberts explained that such conduct could give rise to
liability under Section 2 of the Sherman Act either
where it can be shown that the retail prices charged by
the vertically-integrated provider are predatory or where
a duty to deal can be established.78
As explained above, this route does not seem to be
the one taken by the Court in its case law. In
TeliaSonera, it was invited to rule, inter alia, on whether
indispensability is an element of the legal test to estab-
lish the abusive nature of a ‘margin squeeze’. In its rul-
ing, the Court followed the Commission’s submission,
which departed from the position expressed by the
authority in its Guidance.79 Thus, it concluded that
indispensability is not an element of the legal test, and
that ‘margin squeeze’ conduct is subject to a standard
approach to the analysis of effects. The Court argued, in
particular, that requiring evidence of indispensability in
such a factual scenario would mean that indispensability
would be a precondition to establish an abuse in every
case involving the application of Article 102 TFEU.
TeliaSonera gave rise to controversy, as commenta-
tors disputed the Court’s reasoning and the logical
inconsistency to which the judgment arguably led.80
More important than the controversy itself, however, is
the administrative practice that followed the ruling.
Subsequent Commission decisions reveal that drawing
the line between the respective scopes of application of
Bronner and TeliaSonera is a difficult, if not impossible,
exercise in practice. There is conduct in a grey area
between the two that can be categorised either as a
refusal to deal within the meaning of Bronner (or
Commercial Solvents) or as a ‘margin squeeze’ within
the meaning of TeliaSonera. Slovak Telekom illustrates
this idea particularly well. This case involved
77 Guidance (n 59), paras 80–81.
78 Pacific Bell Telephone Co v linkLine Communications, Inc, 555 US 438
(2009).
79 Submission of the Commission in Case C-52/09, on file with the author.
80 For a discussion of the issues, see O’Donoghue and Padilla (n 33)
399–404.
ARTICLE 11 of 15
simultaneously practices that were labelled as ‘margin
squeeze’ and as refusal to deal.81 Importantly, both
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groups of practices appeared to be part of a single, over-
all strategy aimed at foreclosing new entrants from the
relevant market. It is not obvious to see why, in such
circumstances, some practices would be subject to an
‘enhanced effects’ test and other practices to a ‘standard
effects’ test. According to the Commission’s position in
the case, both sets of practices should be subject to the
latter.82 This is, at the time of writing, still a contentious
issue, as the first instance judgment of the General
Court has been appealed.83
It is also difficult to distinguish, in some circum-
stances, between tying (which is prima facie unlawful
irrespective of its effects) and refusal to deal scenarios.
This is particularly the case where the mechanism
through which two products are combined is technical
(or technological) as opposed to contractual. Suppose
that two products – for instance, a piece of hardware
and a piece of software – are designed in such a way
that they do not work with products offered by rivals.
Such a scenario could be examined as a form of tying.
As a result of the design of the two products, the argu-
ment would go, customers are coerced to use one of the
products (say, the software) when they intend to use the
other (say, the hardware). It would thus make sense to
make the practice prima facie unlawful in accordance
with the test set out in Hilti and Microsoft I. On the
other hand, one could argue that such a scenario is, in
reality, not fundamentally different from the one at
stake in refusal to deal cases. After all, what a claimant
in such a case would be demanding is access to a plat-
form – the hardware – on non-discriminatory terms
and conditions.
The unclear boundaries between these two categories
became apparent in the context of the Microsoft saga. In
its 2004 decision (Microsoft I), the Commission argued
that the licensing of Microsoft’s operating system –
Windows – had been made conditional upon the acqui-
sition of Windows Media Player and took the view that
the practice amounted to unlawful tying.84 The remedy
applied to address the infringement – ordering
Microsoft to sell a version of Windows without
Windows Media Player – is the sort of intervention that
one would expect in ordinary tying cases. Crucially, it
81 Slovak Telekom (Case AT.39523) Commission Decision of 15 October
2014.
82 Ibid, paras 363–371.
83 Case T-851/14 Slovak Telekom, a.s. v Commission, EU:T:2018:929 and
Case C-165/19 P Slovak Telekom, a.s. v Commission, pending.
84 Microsoft (Case COMP/C-3/37.792) Commission Decision of 24 May
2004, paras 792–989.
12 of 15 ARTICLE
failed. The evolution of markets showed that there was
no demand for the operating system without a media
player functionality.85 The remedy endorsed in its
2009 decision (Microsoft II) was, unsurprisingly, dif-
ferent in nature. This second case was closed once
Microsoft accepted, inter alia, a ‘must-carry’ obliga-
tion, whereby the operating system would present
users with a ‘ballot box’ displaying Microsoft’s product
(Internet Explorer) together with rival web browsers.86
As observed by commentators at the time, this remedy
suggested that the case was not so much about tying –
even though the Commission presented it as such – as
about a refusal to deal.87 After all, the ‘ballot box’ rem-
edy in the case can be seen as a way of regulating the
conditions of access to a platform – the operating
system.
B. The remedy determines the applicability of the
‘enhanced effects test’
There is a way in which Bronner/Commercial Solvents,
on the one hand, and TeliaSonera, on the other, can
be reconciled. As already observed, the factual
scenario behind the two cases is similar, and it is rea-
sonable to view a ‘margin squeeze’ as a specific mani-
festation of a refusal to deal. There is, however, a key
difference between the two lines of case law, which is
the remedy. In scenarios like those at stake in Bronner
or Commercial Solvents, a finding of liability demands
from a court or authority the imposition of positive
obligations – an obligation to supply, assorted with
other conditions relating, typically, to the price at
which supplies are to take place. The case law provides
several examples of what the implementation of these
obligations involves in practice. In Commercial
Solvents, the Commission prescribed the quantities to
be supplied to a downstream rival and set a maximum
price for these supplies.88 In Magill, three broadcasters
were required to license their information on a non-
discriminatory basis to each other and to any request-
ing third party.89 In Microsoft, a similar obligation was
85 ‘EU ruling on Microsoft ‘flawed’’ (BBC News 24 April 2006) (‘‘As of
today no PC maker has shipped a version of XPN […] not a single one’
said Microsoft’s lawyer, Jean-Francois Bellis, noting that such companies
accounted for nine out of 10 sales of Windows. As for the rest, stores
ordered 1,787 copies of XPN among 35 m copies of Windows, giving it
an order ratio of 0.005%, he said’).
86 Microsoft II (n 46).
87 Nicolas Petit and Norman Neyrinck, ‘Back to Microsoft I and II: Tying
and the Art of Secret Magic’ (2011) 2 Journal of European Competition
Law & Practice 117.
88 See Article 2 of Zoja/CSC-ICI (Case IV/26.911) Commission Decision 72/
457/CEE [1972] OJ L299/51.
Journal of European Competition Law & Practice, 2019
imposed, and gave rise to litigation regarding the
appropriate price point that would only be solved sev-
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eral years later.90
The positive obligations imposed in refusal to deal
scenarios contrast greatly with the negative remedies
imposed in ‘margin squeeze’ cases like Deutsche
Telekom. In that case, the infringement could be
brought to an end simply by imposing a cease-and-
desist order on the company.91 The fundamental differ-
ence with Bronner – and the reason a negative remedy
was enough to bring the dominant firm’s behaviour in
line with Article 102 TFEU – relates to the regulatory
context underpinning the practice. Unlike refusal to
deal cases like Magill or Commercial Solvents, there was
already a sector-specific regime in place that ensured
that access to the infrastructure would be granted, and
this, on fair, reasonable and non-discriminatory condi-
tions.92 The positive obligations, in other words, existed
already by virtue of the applicable regulatory frame-
work, and did not have to be created via the application
of Article 102 TFEU.
Against this background, the scope of application of
the two sets of tests seems clear. What seems to deter-
mine the application of one test or the other is not the
label given to the practice (that is, whether conduct is
formally presented as a ‘margin squeeze’ or a refusal to
deal) but the remedy to bring the infringement to an
end. There can indeed be refusal to deal instances sub-
ject to a ‘standard effects’ test and, vice versa, ‘margin
squeeze’ behaviour subject to the stricter test. The latter
– ‘enhanced effects’ – appears appropriate whenever
remedial action would lead to the imposition of positive
obligations on firms – including, as already mentioned,
an obligation to supply on regulated terms and condi-
tions. As the examples discussed above show, the
design, implementation and/or monitoring of these pro-
active remedies is inherently more complex. The ‘stand-
ard effects’ test, on the other hand, seems appropriate in
instances where remedial action does not go beyond the
negative obligations – a cease-and-desist order, possibly
assorted with a fine.
89 See Article 2 of Magill TV Guide/ITP, BBC and RTE (Case IV/31.851)
Commission Decision 89/205/EEC [1989]
OJ L78/43.
90 Article 5 of the Commission Decision in Microsoft I (n 83). See also
Microsoft (Case COMP/C-3/37.792) Commission Decision of
Commission Decision of 27 February 2008 fixing the definitive amount
of the periodic penalty payment imposed on Microsoft Corporation
Decision C(2005)4420 final and Case T-167/08, Microsoft Corp v
Commission, EU:T:2012:323.
91 See Article 3 of Deutsche Telekom AG (Case COMP/C-1/37.451, 37.578,
37.579) Commission Decision 2003/707/EC [2003] OJ L263/9.
92 Ibid, paras 15–25.
Pablo Ibáñez Colomo . Legal Tests in EU Competition Law ARTICLE 13 of 15

The dilemma posed by Slovak Telekom can be easily C. The rationale behind the ‘enhanced effects’
solved by reference to this framework. The two sets of test

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practices in the case – ‘margin squeeze’ and refusal to
A legal filter such as the indispensability condition
deal – were evaluated by the Commission under a
ensures that, where intervention is proactive in nature
‘standard effects’ test, the choice of which was validated
(that is, where remedial action takes the form of positive
at first instance by the General Court.93 This is a sens-
obligations), liability is only established in exceptional
ible outcome that is line with the logic underpinning
circumstances. The introduction of this legal filter
the preceding case law. Remedial action in that case did
comes across as a sensible aspect of the case law. First
not involve setting up a regulatory apparatus by means
(and this is something discussed above), proactive rem-
of positive obligations. In fact, it would be appropriate
edies are inherently more complex to design, monitor
to characterise Slovak Telekom’s behaviour as an
and implement. With increased complexity the likeli-
attempt to avoid the regulatory constraints imposed by
hood that the remedy is ineffective also rises, as does
the sector-specific regime, and more precisely its obliga-
the likelihood that intervention has unintended conse-
tions relating to the unbundling of the local loop.94 As
quences. From this perspective, the failure of the Media
in Deutsche Telekom, the sector-specific regime defined
Player remedy in Microsoft I would not be an isolated
in detail the conditions under which the said firm had
instance, but a recurrent and foreseeable issue that can
to share its facilities with rivals. The ways in which the
be expected to emerge whenever positive obligations are
incumbent operator sought to avoid such obligations
imposed. These difficulties came to the fore again in
feature prominently in the decision.95
Google Shopping.96 Instead of crafting a particular rem-
These insights are also useful to identify the circum-
edy, the Commission left it for the firm to decide how
stances in which an ‘enhanced effects’ test may be neces-
to bring the infringement to an end.97 Not only did this
sary to establish liability in a case that is presented as an
approach prove controversial,98 but it extended the legal
instance of tying. As already mentioned, the formal label
uncertainty after the adoption of the decision.99
that is attached to the practice – tying or any other –
Second, one should bear in mind that, in EU compe-
would not be decisive. The relevant question relates
tition law, the restrictive nature of practices is not exam-
instead to the way in which the hypothetical infringe-
ined from an ex post perspective alone. Ex ante
ment would be brought to an end. In a traditional
considerations play a crucial role in the analysis – and
instance of tying, where coercion is achieved by means
this is true across the board. For instance, such consid-
of a contractual device, a negative obligation – an obliga-
erations help explain why franchising and selective dis-
tion not to condition the sale of product A to the sale of
tribution are prima facie lawful under Article 101(1)
product B – will typically address any concerns. Things
TFEU. If these vertical restraints were evaluated by ref-
are likely to be different in some of the scenarios
erence to ex post factors alone, they could be found to
described above, which involve the design and/or the
restrict inter-brand and intra-brand competition in a
technical integration of products. A negative obligation
variety of ways. Once the ex ante perspective is intro-
in the Microsoft I case failed to address any concerns. As
duced, however, it becomes safe to presume that, absent
Microsoft II showed, only proactive remedies were effect-
some core restraints, suppliers would simply not have
ive in that context. This fact reveals that the underlying
recourse to some distribution methods, including the
concerns related not so much to the combined sales of
abovementioned two. It is also in light of these same ex
two products as to the very design of the operating sys-
ante considerations – and for the same reasons – that
tem – and more precisely to the conditions of access by
conduct that is prima facie unlawful irrespective of its
competing software providers to this operating system.
effects can escape the prohibition. When firms claim
As explained by the commentators cited above, the rem-
that a practice is incapable of restricting competition
edy suggests that the case, however labelled, had more in
insofar as it is objectively necessary to attain a pro-
common with cases like Bronner than with traditional
competitive aim, they claim, in essence, that, seen ex
tying scenarios like the one at stake in Hilti.

93 See Commission Decision in Slovak Telekom (n 81) and Case T-851/14 98 See for instance Gary Reback, ‘Google outwits the European Commission
Slovak Telekom (n 83). once again’ Financial Times (London, 26 October 2017); and Matt
94 Commission Decision in Slovak Telekom (n 81), paras 36–49. Richards, ‘Google not complying with shopping remedies, rivals claim’
95 Ibid, paras 428–821. Global Competition Review (London, 22 November 2018).
96 Google Search (Shopping) (Case AT.39740) Commission Decision of 27 99 Rochelle Toplensky, ‘Google overhauls European search results to avoid
June 2017. probe’ Financial Times (London, 19 March 2019).
97 Ibid, Articles 3–5.
14 of 15 ARTICLE
ante, the practice in question enables, rather than
restricts, competition.
From an ex ante perspective, the factual scenarios
subject to the ‘enhanced effects’ test, on the one hand,
and franchising and selective distribution agreements, on
the other, are not fundamentally different. In the same
way that one cannot expect franchising or selective distri-
bution to exist absent some core restraints, one cannot
simply assume that a firm would invest in the creation
or development of an infrastructure or intellectual prop-
erty if it does not have a reasonable prospect to appro-
priate the fruits of its efforts. Put differently, one cannot
take for granted that the competition enabled by the
said efforts would have existed if the firms had been
required, from the outset, to deal with rivals (or, more
generally, do business) on the terms and conditions pro-
actively set by a court or a competition authority – in
particular where these terms and conditions amount to
subsidising rival entry. This basic insight is after all
behind the award of intellectual property rights and,
more generally, the protection of property (whether tan-
gible or intangible).100 For the same reasons, a ‘standard
effects’ test, which presumes that competition would
have existed in the absence of the practice, does not
seem to account for the peculiarities of these cases.
A higher threshold that restricts interference with ex
ante incentives to a limited set of scenarios seems
appropriate instead.
VI. Conclusions
Legal tests in EU competition law can be grouped in
four main categories. First, some practices are prima
facie unlawful irrespective of their effects (or subject to
a prohibition rule). Second, some are deemed prima
facie lawful (or subject to a legality rule). Third, there is
behaviour subject to a ‘standard effects’ test, which seeks
to ascertain whether it has, or is likely to have, anticom-
petitive effects in the economic and legal context in
which it is implemented. Finally, an ‘enhanced effects’
test applies in some instances. The ‘enhanced effects’
test involves showing – at the very least – that the input
to which access is requested is indispensable to compete
on a neighbouring market. This paper has sought to
shed light on the practical operation of each of these
tests and on why they apply in certain instances but not
in others.
As a matter of principle, conduct is prima facie pro-
hibited irrespective of its effects where two cumulative
100 See, generally, William M Landes and Richard A Posner, The Economic
Structure of Intellectual Property Law (Harvard University Pres 2003).
Journal of European Competition Law & Practice, 2019
conditions are fulfilled: first, the practice subject to this
prohibition rule is deemed to have no purpose other
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than the restriction of competition and, second, it is
deemed capable of having anticompetitive effects. It is
possible for a firm to escape the prima facie prohibition
by providing evidence showing that the practice is
incapable of restricting competition in a specific eco-
nomic and legal context. This point has been confirmed
by the Court in Murphy (in relation to Article 101
TFEU) and Intel (in relation to Article 102 TFEU).
A firm can rebut the presumption in two ways: either
by showing that the practice is objectively necessary to
attain a pro-competitive aim or by showing that any
effect would not be attributable to its conduct.
The applicable remedy to bring an infringement to
an end explains why the Court, in some instances,
applies an ‘enhanced effects’ test – as opposed to a
‘standard effects’ test. Thus, indispensability is required
where the remedy involves the imposition of positive
obligations on a firm – such as remedies requiring a
firm to supply an input to a rival (as in Magill) or to
redesign a product (as in Microsoft II). It is sensible to
set a higher bar when positive obligations are involved,
as the Court has done. The design, implementation and
monitoring of proactive remedies and the positive obli-
gations they entail are all inherently more complex, and
thus more prone to errors. Positive obligations may
have unintended consequences or may prove ineffective.
Secondly, the stricter test is an acknowledgement that
one cannot simply assume that the competition created
by virtue of a practice would have existed under the
terms and conditions determined by a court or an
authority. It is a way of acknowledging, in other words,
that ex ante considerations matter (and have always
mattered, since Société Technique Minière) in EU com-
petition law analysis.
A key corollary to the above is that the way in which
practices are labelled cannot, and does not, determine
their legal status. Whether a practice is formally pre-
sented as a form of tying or as a (constructive or out-
right) refusal to deal does not seem to be a relevant –
let alone crucial – factor when determining whether it is
subject to a ‘standard effects’ test or to an ‘enhanced
effects’ test instead. The relevant considerations, as
already observed, are instead the issues raised by the prac-
tice in the specific economic and legal context of which it
is a part. There should be nothing surprising about this
conclusion, which is very much in line with a consistent
line of case law. Indeed, the Court has always emphasised
Pablo Ibáñez Colomo . Legal Tests in EU Competition Law
that substance, not form, is the crucial consideration
when establishing liability.
Exploitative practices are virtually absent from the
analysis. The main reason is that the relative scarcity
of cases addressing these practices makes it difficult to
draw meaningful conclusions about the rationale and
operation of the relevant legal tests. At the same time,
this paper provides valuable insights that help explain
why these cases have not been prioritised by the
Commission. Addressing exploitative conduct gives
rise to similar (if not the same) challenges observed
101 Massimo Motta and Alexandre de Streel, ‘Excessive Pricing in
Competition Law: Never say Never?’ in The Pros and Cons of High
Prices (Swedish Competition Authority 2007).
ARTICLE 15 of 15
when action in exclusionary cases requires proactive
remedies. It has long been understood, to give a con-
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crete example, that determining whether a price is
excessive – let alone identifying what the fair price of a
product should be – is particularly difficult. In this
sense, the conclusions of this paper suggest that calls
to refine the law so as to confine action against exploit-
ative conduct to truly exceptional circumstances may
be justified.101
doi:10.1093/jeclap/lpz045