Price discrimination and abuse of dominance – MEO Case C-525/16

The recent case of MEO delivers a meaningful clarification concerning the importance of an effects analysis in the case of art. 102 (c) TFEU. While not providing an ultimate solution for all comparable future cases, the CJEU in this case clearly indicates that term ‘competitive disadvantage’ constitutes an independent element of art. 102 (c) TFEU that requires proof.

Background to the case

The case concerned a complaint filed to the Portuguese Competition authority (CA) by MEO, a provider of television services in Portugal, against GDA, a copyright collection cooperative. According to MEO, GDA has abused its dominant position by applying different tariffs to MEO than to another customer, NOS. Following this complaint the Portuguese CA opened an investigation concerning the pricing scheme of GDA. The investigation was soon concluded without any additional action taken against GDA since the CA found that the differentiated pricing scheme of GDA did not create a competitive disadvantage for MEO in the sense of art. 102(c) TFEU. According to the CA the difference in tariffs applied to MEO and NOS was not significant enough to undermine MEO’s competitive position and MEO was capable of absorbing such a difference in tariffs. Furthermore, the CA also noted that MEO’s market share increased even during the period when the differentiated prices were applied to it. MEO appealed the CA decision to the Portuguese Competition, Regulation and Supervision Court (the referring court in this case) arguing that the CA misinterpreted Article 102(c) TFEU. According to MEO the CA had mistakenly assessed whether any significant and quantifiable distortion of competition took place instead of assessing whether any competitive disadvantage has been created [par. 14].

In light of the opposed views concerning the application of art. 102(c) to the circumstances of the case, the Portuguese court referred a series of eight questions to the CJEU regarding the definition of the term ‘competitive disadvantage’ in art. 102(c) TFEU [par. 21]. In its response to the Portuguese referring court the CJEU combined the referred questions into the following:

“ … whether the concept of ‘competitive disadvantage’, for the purposes of subparagraph (c) of the second paragraph of Article 102 TFEU, must be interpreted to the effect that it requires an analysis of the specific effects of differentiated prices being applied by an undertaking in a dominant position on the competitive situation of the undertaking affected and, as the case may be, whether the seriousness of those effects should be taken into account.”

The answer of the CJEU regarding this question contributes a great deal to the consistent application of art. 102 TFEU as a whole. Unfortunately, however, the CJEU’s answer does not entirely resolve the vagueness with regard to the link between reduced profitability and abuse of dominance in the context of art. 102 (c) TFEU.

Price discrimination is not per se abusive – extending the effects-based approach

In addressing the prohibition to discriminate under art. 102 TFEU the CJEU, referring to the British Airways case, recalled that discriminatory practices fall foul of the prohibition only when these are capable of distorting competition among the business partners of the dominant undertaking [par. 24-25].Therefore, according to both AG Wahl and the CJEU, evidence of discriminatory trading conditions is not sufficient in order to establish an abuse under art. 102(c) TFEU. This is because not every disadvantage, such as higher prices will create a competitive disadvantage [AG opinion par. 101, 102]. The burden of proof, however, does not go so far as to require an actual quantifiable deterioration of competition with respect to the harmed undertaking and its individual competitors [par. 26-27 and par. 63 of the AG opinion]. In order to evaluate the existence of such circumstances it is necessary, according to the CJEU, to examine all the circumstances of the case [par. 28]. In other words, an abuse under art. 102 (c) TFEU can only be established by an effect based analysis instead of a mere formalistic approach. This approach clearly echoes the CJEU findings in Intel to which it specifically refers in this context [par. 31] and what we may expect to follow in the case of Qualcomm.

No de-minimis for the effects – it’s a binary matter

With regard to providing proof of a distortion of competition the CJEU, referring to Post Denmark, noted that there is no threshold for the purpose of determining whether certain practices constitute an abuse based on the gravity of their effects on competition [par. 29]. According to the CJEU in order for price discrimination to be abusive it must ‘affect the interests of the operator, which was charged higher tariffs compared with its competitors, or in other words, the competitive position of such party [par. 30]. Therefore once a detrimental effect on competition has been established with regard to the party that is being discriminated, such discrimination will be abusive under art. 102 (c) TFEU no matter the seriousness of such effect.

The findings of the CJEU in this regard are quite sensible; distortions of competition should be prevented regardless of their gravity. Therefore the qualification of certain practices as abusive under art. 102 (c) TFEU should not be dependent on how much these interfere with competition from a quantitative perspective. This should not mean that the gravity of an abuse is irrelevant but rather that it should play a role in a different stage of the legal procedure, namely when assessing possible justification grounds and remedies. At the same time, one cannot deny that a binary approach to finding a ‘competitive disadvantage’ is at times rather hard to combine with business reality – just like in the case of finding dominance under art. 102 TFEU. Every price discrimination will create a disadvantage for the party, which pays the higher price. The greater the price difference applied among competitors the greater the likelihood of distorting competition. Accordingly, as in the case of market power, the effect of price discrimination on competition is a matter of degree. Therefore, as in the case of market power, finding such an abuse requires diligence in the process of translating a matter of degree to a binary outcome.

Costs-profits and competition

Finally when addressing the link between increased costs and reduced profitability with an eventual abuse under art. 102(c) TFEU, the findings of the CJEU do not provide definitive guidance for future cases. Accordingly, the CJEU indicated that it is likely that no abuse will occur when the effect of the different price on the costs or on the profitability of the trading party, which considers itself to be wronged, is not significant [par. 34]. Again, these findings make complete sense, but lead to the question of what will constitute a significant effect in future cases. This because without a significant effect on costs-profits there will be no effect on competition and thus no abuse. Consequently one may wonder what will be the case when the price discrimination is applied to an aspect of the downstream product or service that does not represent a big part of the costs for the trading partner? Should discrimination in such cases enjoy more tolerance compared to cases where the price discrimination is applied to an aspect of the downstream product or service that determines the cost of the trading party to a greater extent? In other words, is any degree of price discrimination allowed as long as it does not lead to a competitive disadvantage? The answer should now clearly be yes. However, if that is the case, what does it mean with regard to the financial power of a trading partner in each case? Is there more room for discriminating against an undertaking with ‘deep pockets’ than against undertakings which may perish due to an eventual discriminatory price increase? Should the (in)efficiency of the trading partners be also taken into account when assessing the effect of discriminatory pricing on competition since that may determine the impact of higher prices on their eventual costs-profits balance? All these issues remain to be addressed in future cases.


The case of MEO is an important one with regard to strengthening the importance of effects analysis in the enforcement of art. 102 (c) as well as art. 102 TFEU in general. However, as in most cases, this judgement cannot eliminate all uncertainty in the application of the law. Accordingly, it can be expected that future cases on art. 102 (c) TFEU will follow with questions concerning the significance of various degrees of price discrimination for the finding of an abuse.

On a different note, when looking at the findings of the CJEU in this case one has to admit that the Dutch court in the case of Funda was right to follow the opinion of AG Wahl as it was embraced to a great extent by the CJEU.



Daniel Mandrescu

Blog editor

Ph.D. Fellow, Europa Institute, Leiden University

>> Daniel’s CoRe blog posts >>

Leave a Reply

Related Posts

26. Sep 2022
by Carlo Monegato

The modernisation of EU merger control

THE MODERNISATION OF EU MERGER CONTROL The long-awaited judgment in the Illumina/Grail art. 22 EUMR dispute was announced on 13 July 2022. The General Court confirmed that the European Commission has the power to decide on a merger, referred to it by a Member State, that does not meet the EU thresholds nor was it notified nationally. What follows is […]
26. Apr 2022
by Enrico Di Tomaso

Eventim/Ticketone v. AGCM – May acquisitions be prosecuted pursuant to Article 102 TFEU?

With judgment no. 3334 of 24 March 2022, the Rome Administrative Court of 1st instance (TAR Lazio-Roma) has annulled the decision issued by the Italian Competition Authority (“AGCM”) on 22 December 2020, no. 28495. The above TAR Lazio judgment (“the “Judgment”) is noteworthy because it deals with the possibility of AGCM (and of national competition authorities at large) to apply […]
01. Apr 2022
Features by Friso Bostoen

The French judgment on Google’s Play Store: a shift towards platform exploitation?

On 28 March 2022, the Commercial Court of Paris fined Google €2 million for the imbalanced terms and conditions of its Play Store. While the fine is minimal, Google is also obliged to adapt those T&Cs, including the 30% fee—a much more far-reaching implication. Except for some news articles, the French judgment did not receive a lot of attention (which […]
08. Mar 2022
Features by Daniel Mandrescu

The DMA and EU competition law: complementing or cannibalizing enforcement?

The proposal of the DMA signals a significant change with respect to the application and enforcement of EU competition policy to online platforms. Despite the clear synergy between the two frameworks, the European Commission insists that the DMA is introduced with the idea of complementing, rather than replacing, the enforcement of EU competition law in the case of online platforms. […]
18. Jan 2022
Features by Daniel Mandrescu
smartphone menu

The Apple App Store case in the Netherlands – a potential game changer

Just before 2021 ended, Apple suffered a loss in the Netherlands where a national court in preliminary relief proceedings struck down its attempt to block the remedies imposed by the Dutch competition authority following a finding of abuse of dominance. As a result, as of last weekend, Apple is forced to accept third-party payment solutions implemented in (paid) dating apps […]
06. Apr 2021
Features by Daniel Mandrescu
competition law, art. 102 tfeu, online platforms, data sharing, refusal to supply

Online platforms and the essential facility doctrine – a status update following Slovak Telekom and the DMA

The recent judgment of the CJEU in Slovak Telekom provides important guidance on the application of the Bronner case law in cases concerning abusive market access obstacles. Such guidance is of particular value in the context of online platforms, where issues of access have been considered being unsolvable because of the stringent criteria of the refusal to supply case law. […]
23. Mar 2021
Features by Inês F. Neves

A role for competition policy in fighting gender inequality: not a matter of if, but how

Competition policy is normally thought to be fit at promoting and protecting effective competition in markets, this way enhancing efficient outcomes to the benefit of consumers. As a result, while one may point to some indicia on the relevance of other public interests and values (let us consider, for instance, Articles 101(3) and 106 of the Treaty on the Functioning […]
03. Dec 2020
Features by Daniel Mandrescu

Why you (often) don’t need the essential facility doctrine in the digital economy? – Interpreting Lithuanian Railways and Slovak Telekom

The insights from Lithuanian Railways and Slovak Telekom may have serious implications for the application of the Oscar Bronner case law in the future. These insights may prove, however, to have the most value in the digital economy where it would appear that the essential facility doctrine might often not even be needed – not even in the case of […]
26. Nov 2020
Features by Daniel Mandrescu

Lithuanian Railways and Slovak Telecom – Implications for the Essential Facility Doctrine

The recent cases of Lithuanian Railways and Slovak Telekom address the matter of refusal to deal. Both cases, which do not engage in the assessment of this abuse, in fact, provide important guidance on the scope of application of the essential facility doctrine for current practice that will be covered in this post. Refusals to deal and the essential facility […]
22. Oct 2020
Features by Stefano Riela

Covid-19 and the geopolitics of the Herfindahl-Hirschman Index

The Covid-19 pandemic has revealed that trade is not a free flow whose tap globalization has turned on for good: export may be restricted due to unavailability and, as in the case of import, as part of foreign policy. What emerged as a discontinuity with the globalization of the last three decades makes the assessment of a market structure more […]

If you are interested, please use our Newletter to stay informed about our upcoming conferences, workshops, trainings and current published journals in our core areas of EU competition, data protection, substances and environmental law, as well as exciting new projects in emerging technologies and digitalisation.

Don’t miss any news and sign up for our free news alert.  Sign up now