Minimum Efficient Scale: Towards a More Coherent Understanding of Special Responsibility and Competition on the Merits under Article 102 TFEU

As two key concepts in the Article 102 framework, competition on the merits and special responsibility suffer from a lack of concretization. As a result, the competition on the merits concept may lead the abuse assessment into an illusion of inherent impropriety, whereas the special responsibility concept is susceptible to expansive interpretations that undermine the pivotal role of dominance in the Article 102 paradigm. These issues are shown in cases concerning exclusive dealing and exclusivity rebates. This article suggests using the as efficient competitor rationale — complemented by the no economic sense rationale — to distinguish competition on the merits and abuse with respect to exclusionary conduct. The distinction can be expressed as “efficiency-based versus non-efficiency-based exclusions”. Nonetheless, the limitations of the as efficient competitor test necessitate some calibrations. To that end and to give content to the special responsibility concept, this article spotlights the notion of minimum efficient scale, which has been somewhat overlooked and mis-characterized in the law enforcement. This concept deserves more appreciation in producing more coherent theories of harm under Article 102.