#CURIA: Judgment of the Court in Case C-680/20 | #Unilever Italia Mkt. Operations. Abuse of a dominant position exclusivity clauses in distribution contracts must be capable of having exclusionary effects.

Luxembourg, 19 January 2023
Judgment of the Court in Case C-680/20 | Unilever Italia Mkt. Operations
Abuse of a dominant position: exclusivity clauses in distribution contracts must be capable of having exclusionary effects
The competition authority is obliged to assess that actual capacity to exclude by also taking into account the evidence submitted by the undertaking in a dominant position

By decision of 31 October 2017, the Italian Competition and Markets Authority (‘the AGCM’) 1found that Unilever
Italia Mkt. Operations Srl (‘Unilever’) had abused its dominant position on the Italian market for the sale of
individually packaged ice cream intended for consumption ‘outside’, that is to say, away from consumers’ homes, at various sales outlets.
The abuse alleged against Unilever resulted from conduct materially committed not by that company, but by
independent distributors of its products who had imposed exclusivity clauses on the operators of those sale outlets.
In that regard, the AGCM considered, inter alia, that the practices which were the subject of its investigation had
precluded, or at least limited, the possibility for competing operators to engage in competition based on the merits
of their products.
In that context, it did not find that it was compulsory to analyse the economic studies produced by Unilever in order
to demonstrate that the practices at issue did not have an exclusionary effect against its equally efficient
competitors, on the ground that those studies were irrelevant where there were exclusivity clauses, since the use of
such clauses by an undertaking in a dominant position was sufficient to establish abusive use of that position.
Consequently, the AGCM imposed a fine of EUR 60 668 580 on Unilever for abuse of its dominant position, in breach
of Article 102 TFEU.
The action brought by Unilever against that decision was dismissed in its entirety by the court of first instance.
Hearing an appeal, the Consiglio di Stato (Council of State, Italy) referred questions to the Court of Justice for a
preliminary ruling on the interpretation and application of EU competition law in the light of the AGCM’s decision.
By its judgment, the Court sets out the detailed rules for the implementation of the prohibition of abuse of a
dominant position referred to in Article 102 TFEU in relation to a dominant undertaking whose distribution
network is organised exclusively on a contractual basis and the Court clarifies, in that context, the burden
of proof borne by the national competition authority.
Findings of the Court
First of all, the Court holds that abusive conduct by distributors forming part of the distribution network of a
producer in a dominant position, such as Unilever, may be imputed to that producer under Article 102 TFEU

Read more https://curia.europa.eu/jcms/upload/docs/application/pdf/2023-01/cp230014en.pdf

By

Robert Williams