The Tests of Illegality Under Articles 101 and 102 TFEU

• Author: Pınar Akman
• Date: 01 March 2016
• Published date: 01 March 2016
• DOI: 10.1177/0003603X15625107

Article

The Tests of Illegality Under

Articles 101 and 102 TFEU

Pınar Akman*

Abstract

This article aims to assess one of the many contributions of Economics and the Interpretation and

Application of U.S. and E.U. Antitrust Law by Richard Markovits to our understanding of U.S. and EU

antitrust laws. That specific contribution is the tests of illegality adopted in Markovits’s study to

interpret Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). This

article also examines the claim that none of these tests is an economic-inefficiency test of illegality. In

order to achieve its aim, the article first comments on the ‘‘specific-anticompetitive-intent test’’ that is

proposed to be the test of illegality under the object branch of the prohibition of Article 101 TFEU and

under the abuse prohibition of Article 102 TFEU, before moving on to separate discussions of the tests

of illegality in the specific contexts of Article 101 TFEU and subsequently of Article 102 TFEU. The

article finds that there is still considerable ambiguity concerning some of the most fundamental con-

cepts of antitrust law such as ‘‘competition on the merits’’ at least in the EU but perhaps also in the U.S.

The article reaches the conclusion that there is significant scope for discussion and disagreement on

what makes a conduct anticompetitive, irrespective of whether such conduct is of the type prohibited

under Article 101 TFEU or of the type prohibited under Article 102 TFEU.

Keywords

test of illegality, anticompetitive intent, competition on the merits, Article 101 TFEU, Article 102 TFEU

Introduction

The two-volume Economics and the Interpretation and Application of U.S. and E.U. Antitrust Law by

Richard Markovits is without doubt one of the most impressive academic commentaries on U.S. and

EU Antitrust Law. It goes well beyond the usual superficial comparison of U.S. and EU antitrust laws

and together with its forthcoming policy-sequel The Welfare Economics of Antitrust Policy and U.S.

and E.U. Antitrust Law: A Second-Best-Theory-Based Economic-Efficiency Analysis will constitute a

monumental research study on U.S. and EU antitrust law and policy. It demonstrates levels of analy-

tical thinking seldom found in textual analysis of antitrust laws. It is indeed one of the few studies of

antitrust law that goes beyond the provisions and case law in order to establish coherent principles that

operationalize the law.

*

University of Leeds, Leeds, UK

Corresponding Author:

Pınar Akman, University of Leeds, Leeds, LS2 9JT, UK.

Email: p.akman@leeds.ac.uk

The Antitrust Bulletin

2016, Vol. 61(1) 84-104

ªThe Author(s) 2016

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DOI: 10.1177/0003603X15625107

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The aim of the current article is to assess one of the many contributions of the study to our under-

standing of U.S. and EU antitrust laws, namely, the tests of illegality adopted in Economics and the

Interpretation and Application of U.S. and E.U. Antitrust Law to interpret Articles 101 and 102 of the

Treaty on the Functioning of the European Union(TFEU), as well as the claim that none of these tests is

an economic-inefficiency testof illegality. In order to do this, thisarticle first comments on the ‘‘specific-

anticompetitive-intent test’’ that Markovits proposes to be thetest of illegality under the object branchof

the prohibitionof Article 101 TFEU and underthe abuse prohibition of Article102 TFEU before moving

onto separate discussions of the tests of illegality in the specific contexts of Article 101 TFEU and

subsequently of Article 102 TFEU. Finally, the article offers some concluding thoughts.

The Specific-Anticompetitive-Intent Test

According to Markovits, many antitrust economists, often influenced by misguided legal scholars,

assume that U.S. and EU antitrust laws promulgate an economic-inefficiency test of illegality.

1

In

contrast, according to Markovits, the test of illegality that the Sherman Act promulgates and that

Markovits believes also to be the test for the object branch of Article 101 TFEU and for the

exclusionary-abuse branch of Article 102 TFEU is the ‘‘specific-anticompetitive-intent test.’’

2

Under

this test, a seller commits an anticompetitive act if and only if its ex ante perception of its choice’s

profitability was ceteris paribus critically affected by its belief that the conduct might benefit the seller

by increasing the demand curve that it would face in future by reducing the absolute attractiveness of

the offers against which it would have to compete.

3

According to Markovits, such acts have to be

committed with the ‘‘specific intent’’ to reduce the absolute attractiveness of the offers against which

the undertaking will have to compete—that is, they are acts that would not have been committed but

for the perpetrator’s belief that they would or might have this effect, in circumstances in which the

effect in question would ceteris paribus critically inflate the profitability of the acts concerned.

4

Several general points can be made in relation to the specific anticompetitive intent test. First, the

introduction of the reduction in the attractiveness of rivals’ offers as a central component of what

makes a practice anticompetitive is highly valuable and attractive: it provides an essential conceptual

basis for establishing what makes any given conduct anticompetitive. Such clear, conceptual bases are

seldom found in academic or practitioner commentaries on antitrust, or even in the case law on issues

concerning what exactly makes any given conduct anticompetitive. It is an attractive proposition to

understand acts that distort or harm competition as those by which one undertaking reduces the

attractiveness of its rivals’ competing offers which would not be profitable for the perpetrator but for

this reduction in the attractiveness of rivals’ offers. Such a conceptualization provides one with a

principled basis using which one can distinguish between aggressive commercial practices that harm

one’s rivals on the merits and anticompetitive practices that harm one’s rivals by a distortion of the

competitive positions of the perpetrator and its rivals. Second, the use of ‘‘intent’’ as part of the test of

anticompetitiveness is not uncontroversial in the U.S. or in the EU. There is indeed a sharp divide

amongst commentators regarding the use of intent particularly in unilateral conduct cases (i.e., cases

that would fall within the scope of Sherman Act Section 2 or Article 102 TFEU).

5

This section will

1. RICHARD S. MARKOVITS,ECONOMICS AND THE INTERPRETATION AND APPLICATION OF U.S. AND E.U. ANTITRUST LAW,VOL.I

(hereinafter MARKOVITS I) at xxviii (2014). According to Markovits, many experts also assume that increases in

competition always tend to increase economic efficiency as a result of their ignoring the General Theory of Second Best.

2. Id. at 69.

3. Id.

4. Id. at 69-70.

5. Pınar Akman, The Role of Intent in theEU Case Law on Abuse of Dominance 39 EUROPEAN L. REV. 316, 318 (2014). For a

related discussionof what exactly ‘‘intent’’ refers to in this context, and particularlywhether it refers to objective or subjective

Akman 85