Tài liệu Regulations against abusive pricing -a comparison of eu, us and vietnamese law and an application of its results to vietnam

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LUND UNIVERSITY HO CHI MINH CITY FACULTY OF LAW UNIVERSITY OF LAW TRAN HOANG NGA REGULATIONS AGAINST ABUSIVE PRICING -A COMPARISON OF EU, US AND VIETNAMESE LAW AND AN APPLICATION OF ITS RESULTS TO VIETNAM Field of Study: International and Comparative Law Code: A SUMMARY OF THE DOCTORAL DISSERTATION OF LAW HCMC-2011 This research was done at: LUND UNIVERSITY, FACULTY OF LAW HO CHI MINH CITY UNIVERSITY OF LAW SUPERVISORS: PROF. HANS HENRIK LIDGARD ASST.PROF. LÊ THỊ BÍCH THỌ Discussant 1: ...................................................................... Discussant 2: …………………………………………….. Discussant 3: ...................................................................... This dissertation will be defended at the Ho Chi Minh City University of Law Date and time:........................................................... This dissertation may be found at following libraries: - Vietnam National Library - Library of Ho Chi Minh City University of Law - Library of Lund University Faculty of Law 2 Chapter 1 INTRODUCTION 1.1. Background Competition and monopoly are integral issues to deal with in a market economy. While many other countries have long experience in dealing with these issues, Vietnam only commenced the process of transitioning from a planned to a market economy a little more than two decades ago. Thus, Vietnam currently faces many theoretical and practical challenges involved in protection of effective competition. Due to its own unique circumstances, abuses of dominance are one of the most serious problems for the Vietnamese market. Research in this field, therefore, has a significant potential for improving the Vietnamese economy. In a market economy, prices are one of the most important signs of the state of competition. Prices are established and exercised by economic rules. In a market economy prices are the result of competition. Most basic economic concepts are relevant to prices. The question of whether sellers are price-takers or price-makers is applied to identify whether the market is competitive, monopolistic, or oligarchic. In a competitive market, prices are decided by objective economic rules, especially by the interrelation between supply and demand. So sellers must obey the rules and charge the most appropriate prices in the framework of the rules which serve their competition target. Otherwise, they cannot to exist in the long run and will be driven from the market. Prices are also important tools used by competitors in their struggle for existence and for a position in the market. Pricing is an extremely important job in every enterprise in a market economy. It is the basis for the realization of business targets. In competition, 3 pricing is utilized at the first instance. Strategies applied to other elements of production such as quality, functions, or guarantees, after-sales care, etc., are, after all, of indirect relevance to prices. Pricing can be used for pro-competitive or anti-competitive purposes. In a monopoly market, the power to govern prices is in the hands of the seller. There is a great tendency to exploit that power to extract benefits and maintain the monopolist‟s position. Therefore, it is necessary that the power of regulation be in the proper “hands” in order to curb this danger to a competitive market. The point in time which is largely regarded as the birth of monopoly control laws is the year 1890 with the passage of the Sherman Act in the US. After the Sherman Act, the US enacted in turn the Clayton Act (1914), the Federal Trade Commission Act (1914), the Webb-Pomerene Act (1918), the Robinson Patman Act (1936), the Wheeler-Lea Act (1938), the Celler Kefauver Antimerger Amendment (1950), the Hart-Scott-Rodino Antitrust Improvements Act (1976), which all constituted the anti-monopoly laws (in the US called “Anti-Trust Laws”). In those Acts, Section 2 of the Sherman Act, Sections 2 and 3 of the Clayton Act, and the Robinson – Patman Act regulate abuses of a dominant position (in the US usually called a “monopoly power”). In the European Union, monopoly control laws came to life at the same time, and as part of, the establishment of the Community. Provisions on competition principles appeared in Articles 3 (f), 85 and 86 of the Treaty of Rome of 25 March 1957 which established the European Economic Community. To an extent, both Articles 85 and 86 of Treaty of Rome are monopoly control laws since Article 85 prohibits cartels and Article 86 prohibits abuses of a dominant position. The Treaty of Rome was amended by the Single European Act, and, the Treaty of Maastrichtestablishing the European Union in 1992. This Treaty entered into force from 1 4 November 1993 and became the EC Treaty. Articles 85 and 86 became Articles 81 and 82 of the EC Treaty and used to be called as Article 81EC, Article 82EC. The Treaty was further amended by the Treaty of Amsterdam and the Treaty of Nice. Then, on 13 December 2007, the EU member states signed the Treaty of Lisbon, which entered into force on 1 December 2009. The Lisbon Treaty amends all of the prior Treaties. In this process, the original Treaty establishing the European Economic Community from 1957 became the Treaty on the Functioning of the European Union (TFEU). Articles 81 and 82EC now become Article 101 and 102 of TFEU (Article 101TFEU and Article 102TFEU). Nowadays, EU competition law and US antitrust law have become popular models of competition law in the world. Based on theory, and Vietnam‟s specific situation, the issue of legislation against abuse of a dominant position is a burning question of the day and strategic task of Vietnam‟s monopoly control laws. These regulations must be used to force all entities possessing monopoly power to respect legal rights and economic expectations of consumers and put an end to competition restraints. However, after 6 years from the date Vietnam Law on Competition (VLC)came into force, it has not had much practical effect. In fact, so far only three cases relating to abuse of a dominant or monopoly position have been dealt with by the authorities under the VLC. The first case is Tan Hiep Phat Ltd. v. Vietnam Brewery Ltd.(THP v. VBL), commenced in the later part of 2003, and ultimately brought in the form of an official complaint to the Vietnam Competition Authority (VCA) in the beginning of 2007, after its establishment and issuance of governmental decrees providing detailed guidance on the implementation of the VLC. The VCA made its decision to investigate the case in October 2007, then 5 concluded the investigation and referred the case to Vietnam Competition Council (VCC) for final decision. Based on proposals of the VCA, the VCC decided to terminate handling the case because the alleged enterprise did not possess a dominant position in the relevant market. The second case, which has reached a final result – a decision made by the Competition Case Handling Council (CCHC) – is the Vinapco case. The third case is the Megastar case, in which six companies in the movie industry submitted a complaint on Megastar‟s abuses of its dominant position to the VCA in May 2010, and the VCA has made an official investigation. In the meantime there are many other practices which have attracted arguments from enterprises, state agencies, researchers, and lawyers about whether they are abusive conduct such as increasing the prices of pharmaceutical products, milk products, and steel, “price wars” among mobile telecommunications providers, a price dispute between VNPT and EVN over electric grids and pole rental, complaints about the price increase relating to exclusive broadcasting rights of K+ to Sunday matches of the English Premier League in Vietnam. This real-world situation demonstrates two problems. The first is that although the VLC has been established and a range of laws and guiding legal documents have been promulgated, Vietnamese society and especially its developing business community has not developed a unified concept of this issue. The second is that abuses of a dominant position still exist under various forms yet are not effectively dealt with. This phenomenon raises questions regarding the practical value of the Competition Law and with respect to what the Vietnamese State should do next if it is to construct comprehensive, clear, and consistent competition policies. Relevant materials regarding the laws of developed countries such as the US and the EU are plentiful. a comparative law approach 6 would aid in understanding current regulations of abuses of a dominant position, while referring to Vietnamese laws and Vietnam‟s factual situation to derive practical solutions to existing problems would be useful and help fill gaps in theoretical and practical solutions. Meanwhile, many abusive activities, which had been identified and condemned by authorities, related to the pricing policies of dominant enterprises. I therefore decided to perform doctoral research with the object of producing a thesis titled: “Regulations against abusive pricing – A comparison of EU, US, and Vietnamese laws and an application of its results to Vietnam”. The results of my research should provide useful ideas with respect to regulations which will be important to the development of the Vietnamese economy. Referring to the experience of other countries‟ laws from a comparative perspective may also permit me to make suggestions for improving Vietnamese competition law. Furthermore, I hope that the results of my research will be helpful in my teaching and be a further reference for others interested in this topic. 1.2. Purposes This research has two purposes. The first purpose is to investigate both theoretical and practical aspects of competition laws in combating abusive pricing by dominant enterprises in the EU, US and Vietnam. It aims at finding universally accepted relevant concepts, as well as commonalities in measures applied to prevent and deal with infringements. It also aims at identifying differences among the laws of different countries and determining the conditions and consequences of these differences. 7 The second purpose is to draw lessons for Vietnam. This cannot be achieved without first attaining a clear and comprehensive awareness of Vietnam‟s actual situation in this field. My aim is to determine the contents and practical effects of current regulations on abusive pricing. More importantly, I want to discover what if any deficiencies exist under Vietnamese competition law in this area and to propose solutions. 1.3. Definition and Delimitation There is no interchangeable official definition of the term “abusive pricing”, or “pricing abuses” in the laws of any country that I have studied. However, the term is popularly used in legal documents and academic legal works. It appears to me that it is generally recognized as having one meaning: it refers to abuses of dominant or monopoly positions in respect of pricing. Therefore, in the framework of this dissertation, I will use the term “abusive pricing” with following definition: Abusive pricing is the abuse of a dominant or monopoly position (in accordance with EU and Vietnamese competition law), or monopolise or attempt to monopolise (in accordance with US antitrust law), relating directly to pricing of goods or services of the infringing entity. This dissertation focuses on only laws against abusive pricing. In other words, this dissertation‟s contents are absolutely within the framework of unilateral pricing for restraint of competition. It does not discuss collusion, i.e., joint conduct for restraining competition such as agreements and concerted practices, even when they relate to pricing. It also does not discuss other abuses not directly related to pricing effects.even if they relate to pricing. It also does not discuss other abuses not directly relating to pricing. As the title of this dissertation states, I have selected for examination only the laws of three legal systems: The EU, the US 8 and Vietnam. The EU and the US are the most important and characteristic legal systems, which deal with the issues concerned in this thesis. These two legal systems have had a great deal of experience in addressing abusive pricing, in addition to of other forms of competition abuses. The relevant authorities in both systems have issued guidelines on abusive pricing. Studying these two legal systems‟ experiences in the field of fighting against abusive pricing is a good approach to applying their experiences and answers to relevant issues in Vietnam. All basic rules, provisions and regulations on forms and remedies of the Vietnamese legal system on abusive pricing will be analysed. This dissertation will concentrate on clarifying weaknesses in the current provisions of Vietnamese law in order to develop and propose meaningful solutions. This dissertation utilises facts and legal theory obtained from many different sources, such as statutes, regulations and official guidance, decisional law from courts, administrative authorities, sources of academic thought found in books, empirical studies, legal journals, forum or conference reports, official reports, statistics from state bodies, and reports found in mass media. This dissertation uses case law from the EU and US to illustrate issues under discussion. With such a long development and history, the extent of sources in EU and US law is enormous. This provides huge diversified views on and practical experience for this dissertation‟s research issues. However, on the other hand, this presents difficulties in performing comparisons at the macro level in order to discover typical similarities and differences between the two systems. Thus, in some instances when presenting the historical development of EU and US case law or theoretical arguments under discussion, this dissertation relies primarily on official reports and 9 guidelines of EU and US competition authorities and includes references made therein even if I have not studied everything myself. 1.4. Methods In order to fulfil the above-mentioned purposes, I use a combination of study methods for legal research. To wit: the traditional legal (dogmatic) method and a comparative legal method. I will also apply a historical and law and economics perspective in my research. Traditional legal method (or Legal Dogmatics): This method is used to interpret and evaluate the content and systematize specific valid provisions of concerned legal systems. Sources such as laws, case law, preparatory work and doctrine are assigned value and analysed in such a way as to shed light on the given problem and find the answers to the question posed. The ultimate aim of using this method is to investigate current applicable law against abusive pricing in selected legal systems. It not only describes the applicable law and answers the question why the law is as it is, but also targets reaching certain rules and legal/technical significance in legislation of the concerned law. This method will be presented in my dissertation in two parts: descriptive and analytical. The first part presents the area of law to which the current problem belongs. The second part scrutinizes the legal problem in terms of its components and finally it is brought together and analysed as a whole. This method is used in Chapters 2, 3, and 4 of this dissertation. Comparative legal method: I use this method for discovering and dealing with similarities and differences between the US, the EU, and Vietnamese legal systems regarding abusive pricing. The interdependence and disparities of the systems are analysed. At a macro level, I compare the spirit, style, and method of these systems. At a micro level, this method is used for studying the similarities and 10 differences between solutions provided by these systems for solving the abusive pricing problems. This method is utilized in Chapters 2, 3, and 4. The law will be examined in the context of its relationship with historic conditions under which it developed. Knowledge of the historic sources and statutes is a necessary foundation to the description and analysis of current provisions. Analysing historic changes and their influences on the development of the law increases understanding. Moreover, since this research concentrates on abusive pricing, an issue which has a large economic component, it is necessary to investigate the applicable law from a purely economic perspective, by using economic analyses to explain, describe, construct, reconstruct, and predict legal issues. Economic analyses provide insights into the market-based issues of competition law, especially pricing. It requires study of economic theories in analysing rationales of norms and vice versa to examine how the functions of norms affect the economic sphere. However, this is a legal dissertation only applying economic analyses and theories sufficient to provide assistance for solving legal issues, i.e. only general ideas of economic analyses or theories that are commonly recognized are presented, not mathematical models or equations. In the process of applying above mentioned methods, the thesis will benefit from tools, such as Descriptions, Dialectics, Synthetics, Comparisons, and Analytics. 1.5. Value of the research Academic value: In Vietnam, it will be one of the first pieces of research on abuse of dominant position using Comparative Law methods. A comparison of law methods is expressly presented. The dissertation provides a significant amount of valuable information on theoretical issues relevant to regulations against abusive pricing by 11 dominant enterprises, and hopefully will become a reference work in the field for studying and teaching Competition Law and Comparative Law in Vietnam. Furthermore, I hope that this dissertation will be a starting point for foreign researchers who wish to understand the activities within the Vietnamese legal system as it endeavours to control monopoly in the first years of integration into the world market economy. Practical value: This dissertation may also help to satisfy the demands of both enterprises and consumers who wish to understand the concepts and forms of a large group of abuses of dominant position, i.e. abusive pricing, and discover ways of avoiding to do and/or defending against such infringements. It will also endeavour reach conclusions and/or propose solutions for dealing with the demands of the Vietnamese legal system as it fights against abusive pricing by dominant enterprises. 1.6. Outline In addition to Chapter 1, which has briefly introduced the research, this Dissertation has three main parts. Part I comprises a comparison between EU and US laws on dealing with abusive pricing. The main content of Part I is contained in Chapter 2. The chapter presents an examination of measures for dealing with abusive pricing, after setting out theoretical issues such as the basic rules of laws, concepts and forms of abusive pricing. For every issue, I correlate and analyse information regarding the relevant EU and US laws. Part II, located in Chapter 3, focuses on an introduction to the same issues as addressed by the Vietnamese legal system, and makes a comparison through the same logical process to identify similarities and differences among relevant Vietnamese, EU and US relevant laws. 12 Part III focuses on proposals for application to Vietnamese competition law drawn from the experiences obtained from the comparative research into EU and US laws. This part is presented in Chapter 4, together with final conclusions of this dissertation. Chapter 2 REGULATIONS AGAINST ABUSIVE PRICING UNDER EU AND US LAW 2.1. Basic rules and concepts on abusive pricing in EU and US 2.1.1. Basic rules EU and US laws relating to abusive pricing have two similar basic rules. First is direction against all abusive conduct, which includes but is not limited to abusive pricing. Second is a mandate to protect competition, not competitors. 2.1.2. Concept of Dominant Position, Market Power and Monopoly Power In the EU and the US, the term “market power” is favoured. The term “dominant position” in EU law has similar meaning as the term “monopoly power” in US law. The basic requirements of a “dominant position” (or “dominance”) in the EU and “monopoly power” in the US are the same: “substantial market power” in a “durable period of time”. Generally, in determining dominant position/monopoly power, the EU and the US use the same two basic factors, i.e. market share and entry barriers. The EU goes further, however, to take into account countervailing buyer power. 2.1.3. The Relevant Market concept Although there is no a general fixed formula for determining dominant position (or monopoly power), both the US and the EU 13 consider the first essential step is to define the relevant market. Relevant market includes relevant product market and relevant geographic market. Analyses and methods used by the EU and the US in identifying relevant market are basically similar to each other. 2.2. Specific forms of abusive pricing in EU and US laws 2.2.1. Excessive pricing Excessive pricing is not itself an offense under US law. Legitimate monopolists are free to set prices at profit-maximizing levels. This is because US Courts consider that, on one hand, profit is a reward for successful competition, and on the other, excessive pricing is a mechanism for the restoration of a competitive structure. Whilst, EU competition law regulates against excessive pricing due to its identification of the popular conception of the evils of monopoly, accepts that excessive pricing can constitute an abuse and that charging a price which has no reasonable relation to the product‟s „economic value‟ would be excessive. The CJEU has applied a two-stage test to assess excessive prices. This test requires, first, a comparison of actual costs and prices, and, second, determining whether a price is excessive in itself or by comparison to competitors' products. In theory, a dominant firm can violate Article 102(a)TFEU not only by charging excessively high prices as a seller, but also by imposing excessively low prices through the exercise of monopsony purchasing power. There are, however, no reported cases in which a violation of Article 102 TFEU has been found on the basis of a dominant buyer applying excessively low purchase prices. 2.2.2. Predatory pricing Although there is not universal definition, predatory pricing is generally referred to as an activity undertaken by dominant firms where they price their products at a very low level in order to drive 14 competitors out of the market. After the competitors are excluded, the dominant firms are able to increase prices to monopoly levels in order to recoup their losses. In US, there are two combined tests for predatory pricing: (1) Whether the firm actively makes loss in short term (Price-Cost test), and (2) Whether the firm has probability of recoupment its loss (Recoupment test). In practice, US courts apply recoupment test as major premise for determining predatory pricing. The price-cost test is used only when the recoupment test gives a positive result, i.e. market structure and conditions guarantee the firm‟s recoupment feasibility. Unlike the approach under US law, in EU, price-cost test is used as major premise for determining predatory pricing. When consider a claim of predatory pricing, EU courts always apply price-cost test at first. When this test shows that prices are below certain level of costs, then, depending on particular cost level prices below, the additional proof - predatory intent - may be required. Moreover, while in US there is no predation if prices are above average variable cost (AVC), in EU prices above AVC but below average total cost (ATC) may be condemned as predation. Theories and case law in both two systems consider AVC as a benchmark for any presumption of predatory behviour. Recently, economic theories and discussions of competition agencies in both EU and US have suggested another benchmark – average avoidable cost (AAC). 2.2.3. Price squeeze In some industries, the dominant firm may find itself to be both the supplier in the upstream and the competitor of another firm in the downstream market. If the dominant firm is in possession of an essential facility or is the sole supplier of an intermediary, or accessory product, the pricing of such a product may create a price squeeze for the competitors. 15 In both the US and EU, the “price squeeze” (or, interchangeable “margin squeeze”) is considered to be a variation of the refusal to supply/deal situation. There are also the same approach to form and nature of price squeeze in the two systems. Generally speaking, a „margin‟ or „price‟ squeeze occurs where a vertically integrated firm subjects its competitors in the downstream market to a pricing policy whereby it raises the prices of key inputs in the upstream market so high and/or lowers its prices to customers in the downstream market, in order to injure its competitors in downstream market. Theories on this practice in the EU and US are similar. However, in presently in the US there is no direct and specific mechanism for condemnation of a price squeeze. Firms should and can only base complaints of abuse on a predatory pricing test to establish antitrust liability for retail pricing in “price squeeze” situations. In contrast, EU competition law has constructed a system of conditions, or in other words, a system of analyses applied to identify a price squeeze. Based on EU courts‟ rulings in recent margin squeeze cases, a system of conditions is necessary before a price squeeze abuse can be established including such factors as: (1) the firm is a dominant supplier in the wholesale input market and is vertically integrated; (2) the input in question is indispensable for downstream competition; (3) the vertically integrated dominant firm's practice would produce an anti-competitive effect, at least potentially, on the retail market; and (4) the practice is not in any way economically justified. 2.2.4. Price discrimination Both EU and US law on price discrimination are constructed to directly regulate only secondary line injury. Price discrimination with primary line injury affect is regulated by other legal theories, 16 such as predatory pricing, price squeeze, discounts and rebate schemes. Current US regulation on price discrimination has some shortcomings. While US law does not condemn applying the same prices for dissimilar transactions, EU law does. 2.2.5. Discount and Rebate Scheme Both the EU and the US legal systems have a great deal of case law experience concerning this form of abusive pricing. There are many similarities among the theory, and tests for bundled discounts (i.e., tests for predatory and tying features of the practice). There are differences in tests for single product loyalty discount, but both the two systems apply the same theory for determining it, i.e. it discriminates against purchasers who did not buy exclusively from the dominant firm and it excludes competitors from entering the market because they are unable to offer a low enough price to compensate the customers for the loss of their whole year‟s rebate. 2.3. Remedies to abusive pricing in EU and US laws 2.3.1. Conduct and Structural Remedies This group of remedies includes termination of infringement, requiring to take affirmative behaviours, prohibition of some specific behaviours, dissolve the violator, split it into two or more entities, or require divestiture of assets to a new owner. 2.3.2. Monetary Remedies This group of remedies includes: - Fines and penalties: While in the EU fines for abuses are provided based on percentage rate of the violator‟s turnover of a fiscal year (up to 10%), in the US they are absolute amounts under the framework stipulated by law (fines to corporations of up to $100 million and to individuals of up to $1 million). The difference leads 17 to ability of higher actual amounts of fines in EU than in US. So it seems that deterrence impacts of EU fines are higher those of the US. - Compensation: In the US, private parties who have been injured by an act forbidden by the antitrust laws are entitled to bring civil action for “treble damages”. This compensation may be up to three times the actual amount of the damages. In EU there is not a mechanism of treble damages like in US. - Legal fees: Where the normal rule in Europe is that the losing party will have to cover the procedural costs including attorneys fees, this is not necessarily so in the US which follows the “American Rule” of each party bearing to cost of its own attorney‟s fees. However, Section 4 of the Clayton Act provides that successful plaintiffs are to be awarded “reasonable attorney's fees”, in addition to the treble damages award. In sum, in another respect, the US system of remedies contains other measures that improve deterrence impacts and also encourage private enforcement of antitrust law: treble damages claims and attorney‟s fee awards for successful plaintiff. 2.3.3. Criminalization and Incarceration In the EU, competition law infringements are not criminalized. In the US, the Sherman Act provides not only criminal fines to corporations and individuals, but also the possibility of imprisonment for a period of up to ten years on each count of the indictment. Chapter 3 ABUSIVE PRICING IN VIETNAM COMPARED WITH EU AND US 3.1. Background, basis rules and concepts 18 3.1.1. Gradual inforcement capacity development of legislation and This part of dissertation presents two contents: - Development of Vietnamese laws before and after the VLC enactment; and - Competent Authorities for regulating abuses of dominance. 3.1.2. Recent practices related to abuses of dominance In particular, they are Vinapco, Megastar, K+, “eclectric pole war” between EVN and VNPT, medicine and milk price increases. 3.1.3. Basic rules: Generally, Vietnamese competition law also has two basic rules that are similar to those of the EU and the US: (1) against all abusive conduct, which includes but is not limited to abusive pricing, and (2) mandate to protect competition, however, in several particular cases, it seems that there is a trend to protect also competitors. 3.1.4. Concepts Dominant position and Monopoly position One finds squarely in the caption in of Section 2, Chapter III of the VLC the title “Abuse of dominant position, monopoly position”. This demonstrates that, on one hand, Vietnamese Competition Law follows the model of EU competition laws, and on the other hand, wishes to emphasize cases of absolute monopoly. This is a difference between Vietnamese law and other countries‟ policies. US antitrust laws and EU competition laws use terms such as “dominant position” and “monopoly power” with a relatively similar meaning. “Monopoly position” in the EU and US laws is not 19 separated from “dominant position” or having “monopoly power”. The VLC stipulates that an enterprise shall be deemed to be in a monopoly position if there are no enterprises competing in the goods and services in which such enterprise conducts business. The VLC does not provide any definition of dominant position. It just lists two situations where an enterprise is considered to possess dominant position. The first situation is having a market share from thirty per cent and upward in the relevant market. The second situation is having the capability of substantially restrain ing competition. These two situations are separated, i.e., if an enterprise has a market share from thirty per cent upward, it is considered to possess a dominant position, without the need to assess any other condition; and if an enterprise has a market share below thirty per cent, but has the “capability of substantially restraining competition”, it is also considered to possess a dominant position. There are several differences between the VLC and US and EU law on the identification of dominance. While US and EU law pay attention to two elements: “significant market power” and the “durable” feature of the power for an appearance of dominance, the VLC looks only at market power. There is no word or phrase referring to time in the provisions on dominance and monopoly position in the VLC. Thus, the single element of market share, as low as thirty per cent, for determining dominance in the VLC, while simple and convenient for the state authorities to apply, may bring enterprises without real dominance into the ambit of allegations of abuse. The VLC does not refer to entry barriers and their role in the establishment of dominance. In addition to the dominant position of a single enterprise, the VLC regulates the dominant position of a group of enterprises. This is also based on only on market share criteria. 20
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