Abuse of dominant position is the substantive category of unilateral conduct prohibited under the Competition and Anti-Monopoly Law No. 14 of 2010. The framework applies to operators holding a dominant position as determined under the analytical framework addressed in the preceding article, with the substantive prohibition engaging conduct that exploits the dominant position to the detriment of competition, consumers, or other operators. The framework engages substantive categories of abusive conduct, with both substantive prohibitions and procedural arrangements for the assessment of specific conduct.
Categories of Abuse
The categories are not mutually exclusive, with specific conduct potentially engaging multiple categories. Abuse of dominant position engages substantive categories:
- Exclusionary abuse, engaging conduct that excludes or marginalises competitors
- Exploitative abuse, engaging conduct that exploits the dominant position to the detriment of consumers or trading partners
- Discriminatory abuse, engaging discrimination between similarly situated counterparties
- Reprisal abuse, engaging conduct in response to competitive activity
- Structural abuse engaging conduct affecting market structure
Exclusionary Abuse
Exclusionary abuse engages conduct that excludes or marginalises competitors. The principal categories include:
- Predatory pricing, engaging pricing below cost intended to exclude competitors with the prospect of subsequent recoupment
- Margin squeeze, engaging the manipulation of wholesale and retail prices in vertically integrated operations to squeeze competitor margins
- Refusal to contracting, engaging refusal to supply essential inputs or facilities to competitors
- Tying and bundling, engaging the conditioning of the supply of one product on the purchase of another in a manner that excludes competitors in the tied product market
- Exclusive dealing arrangements that exclude competitors from access to essential customers or inputs
- Loyalty rebates and discounts that exclude competitors by creating substantive switching costs for customers
- Vexatious litigation or regulatory abuse intended to exclude competitors
- Strategic patent litigation or other intellectual property strategies intended to exclude competitors
Predatory Pricing
Predatory pricing is a substantive category of exclusionary abuse, engaging substantive analytical considerations:
- Pricing below cost, with substantive considerations of the appropriate cost measure
- Substantive evidence of predatory intent supporting the inference of predatory strategy
- Substantive consideration of the prospect of recoupment following the exclusion of competitors
- Substantive analytical distinction between predatory pricing and legitimate competitive pricing
- Substantive availability of efficiency defences supporting the pricing
Refusal to Deal
Refusal to deal findings engage substantive considerations of the appropriate scope of the obligation to supply, with substantive analytical considerations of the substantive market effects. Refusal to deal engages substantive analytical considerations:
- Substantive indispensability of the input or facility to competitors
- Substantive ability of the dominant operator to supply
- Substantive effects of the refusal on competition in downstream markets
- Substantive availability of alternative arrangements for the affected competitors
- Substantive justification for the refusal including legitimate business reasons
- Specific considerations for refusals engaging intellectual property
- Specific considerations for essential facilities
Exploitative Abuse
Exploitative abuse engages conduct that exploits the dominant position to the detriment of consumers or trading partners:
- Excessive pricing engaging pricing substantively above the level that would prevail in a competitive market
- Unfair contract terms imposed on customers or suppliers
- Substantive degradation of product quality
- Restriction of output to support price increases
- Substantive deterioration of service standards
- Imposition of trading conditions unrelated to the substantive transaction
Excessive Pricing
Excessive pricing findings are practically difficult, with the substantive consideration of the appropriate benchmark engaging substantial analytical complexity. The framework engages excessive pricing findings in substantial cases with substantive evidence supporting the conclusion. Excessive pricing engages substantive analytical considerations:
- Comparison of the actual price with the substantive economic value of the product
- Comparison with prices in comparable markets where competitive conditions prevail
- Comparison with prices charged by the same operator in other markets
- Analysis of margins and rates of return
- Consideration of substantive cost structure
- Consideration of substantive market characteristics affecting appropriate pricing
Discriminatory Abuse
Discrimination findings engage substantive considerations of when differentiated treatment is substantively justified versus when it constitutes substantive abuse. Discriminatory abuse engages discrimination between similarly situated counterparties:
- Price discrimination between similarly situated customers without substantive justification
- Discrimination in supply terms or conditions
- Discrimination in access to facilities or inputs
- Discrimination affecting downstream competition between customers
- Substantive consideration of legitimate justifications for differentiated treatment
- Substantive analytical considerations of the substantive effects on competition
Special Responsibility of Dominant Operators
Dominant operators bear a substantive special responsibility under the competition framework, recognising that conduct that would be acceptable from non-dominant operators may engage abuse considerations when conducted by dominant operators:
- Substantive heightened obligations affecting commercial conduct
- Substantive consideration of the substantive effects of conduct that might be legitimate competitive conduct from non-dominant operators
- Substantive obligations to ensure that commercial arrangements do not engage abuse considerations
- Specific compliance considerations engaging the dominant operator’s broader operational arrangements
- Substantive training and awareness arrangements
Defences and Justifications
Available defences and justifications for conduct that might engage abuse considerations include:
- Objective justification supporting the conduct on substantive legitimate business grounds
- Efficiency justification supporting the conduct on the basis of efficiency benefits
- Substantive consumer benefit supporting the conduct
- Substantive proportionality between the conduct and the legitimate objective
- Specific regulatory or statutory frameworks engaging the conduct
- Substantive evidence supporting the substantive justification
Remedies
Remedies for abuse of dominant position engage substantive considerations:
- Cease and desist orders requiring the termination of the abusive conduct
- Behavioural remedies requiring substantive changes to the operator’s commercial conduct
- Structural remedies including divestiture in substantial cases
- Monetary penalties calibrated to the substantive gravity of the abuse
- Compensation to harmed parties through civil proceedings
- Substantive monitoring of subsequent compliance
- Substantive publication of findings supporting subsequent compliance
How We Can Help
Etihad Law Firm advises on abuse of dominant position under Iraqi competition law, including compliance arrangements for dominant operators, substantive assessment of commercial conduct against the framework, response to Competition Council investigations, defence of abuse proceedings, and the conduct of disputes engaging abuse matters.