CYIL vol. 13 (2022)

MICHAL PETR CYIL 13 ȍ2022Ȏ issued during the oil crisis in the seventies, in case ABG Oil . 52 At that time, the oil crisis, which amounted to severe shortage of crude oil and thus a surge of its price, made certain oil companies to increase their prices for crude oil and to reduce their production; at the same time, these were the only companies capable of supplying the market. The Commission observed that “ general economic circumstances and particular market conditions combine so that firms with an established market position, access to raw materials and adequate industrial capacity and capital resources find themselves in a position to control production and distribution in a substantial proportion of the market ” and concluded that “For reasons completely outside the control of the normal suppliers, their customers become completely dependent on them for the supply of scarce products. Thus, while the situation continues, the suppliers are place in a dominant position in respect of their normal customers. With the general shortage of supplies all oil companies were faced with the same problem , that of maintaining supplies to their regular customers. Thus, they were not able to make up the differences of the other companies with substantial market shares and they were in no way in competition with each other to supply each other’s customers. Thus, “ in the prevailing circumstances, each of these companies found itself in a dominant position relative to its customers ”. 53 We are not aware of any competition authority arguing in this way in relation to the supply of products, most effected by the COVID-19 crisis. Without going into material details, we doubt to what extent was this ruling relevant for the COVID-effected products. The supply of oil-based commodities is generally founded on long-term contracts, securing large quantities and specific characteristics of the commodity at issue; conversely, distribution of hand sanitizers, face masks and similar products is easy to switch to new customers. At the same time, we put forward that such a reasoning concerning dominance might have been considered in relation to supplies of specific medical equipment, like ventilators, which need to be compatible with other equipment already used by the medical facility. Notwithstanding the specific COVID situation, the ABG Oil judgement may clearly be relevant for energy markets, in particular concerning the supplies of crude oil and natural gas. As more than 30 years have passed since it was issued, does it still correspond with the Commission’s understanding of the notion of dominant position? The answer to this question is very significant for the future. The Commission has not yet issued any guidance material concerning exploitative abuses of dominance, including the excessive prices. As such cases are re-emerging on national level, detailed guidelines from the Commission would be most welcome, including the analysis of dominance in crises and transitory situations. 54 52 Commission decision of 19 April 1977 IV/28.841 ABG Oil companies operating in the Netherlands (77/327/ EEC). It needs to be added that this decision was annuled by the CJ EU by its judgement 77/77 BP and others v. Commission , but the CJ EU did not challenge the existence of dominant position of the companies in question. 53 Ibid ; emphasis added. 54 With respect to the analysis of dominance in the ABG Oil case, some authors write fittingly of „ transitory market power “. See EZRACHI, A. EU Competition Law – An Analytical Guide to the Leading Cases . 6th edition. Hart Publishing, 2018, p. 231.

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