Court of Justice explains how to assess abusive price discrimination

On 19 April 2018, the ECJ published a judgment responding to questions referred to it by the Portuguese competition tribunal. The case concerns an allegation by MEO, a pay-TV and content provider, that GDA, the sole manager of the rights of artists and performers in Portugal, has been charging excessive prices and applying different tariffs to MEO than its competitors.

Article 102(c) of the Treaty on the Functioning of the European Union describes the abuse of price discrimination as applying dissimilar conditions to equivalent transaction with other trading parties, thereby placing them at a competitive disadvantage. This judgment relates to the final limb of this test.

In its judgment, the ECJ held that "it is necessary to examine all the relevant circumstances" and that a finding of competitive disadvantage does not require "proof of an actual quantifiable deterioration in the competitive position" of trading parties. However, the assessment must be based on an analysis of all the relevant circumstances in order to conclude that the behaviour has an effect on the costs, profits or other relevant interests of a trading party.  

The ECJ noted that where such an effect on an operator "is not significant", it may be deduced that the price discrimination is not capable of having any effect on the competitive position of that operator. This is consistent with UK Court of Appeal's judgment in Attheraces, when it found that  the mere fact that a price differential may have a greater impact on the profits of one party compared to another did not mean that it actually distorted competition between them.

The judgment is also one of the first to consider the assessment of competitive disadvantage in abuse cases following the ECJ's judgment in Intel. Referring to Intel, the ECJ notes that one of the relevant factors in the assessment by a competition authority or national court of the case submitted to it is whether the conduct aimed to exclude a competitor "which is at least as efficient". In Intel, the ECJ found that the General Court had wrongly failed to take into account the arguments and evidence submitted by Intel that its conduct was not capable of foreclosing an as efficient competitor. The ECJ's judgment in MEO reiterates that both competition authorities and courts should take account of this evidence when it is submitted.