Dominance 2013 - Luxembourg

Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through – Dominance 2013, (published in December 2012; contributing editors Thomas Janssens and Thomas Wessely, Freshfields Bruckhaus Deringer).

1 Legislation

What is the legislation applying specifically to the behaviour of dominant firms?

The Law on Competition of 23 October 2011 (Mémorial A 2011, No. 218, p 3755) (the 2011 Law) has abrogated the Law on Competition of 17 May 2004 (the 2004 Law) with effect as of 1 February 2012.

Further, the law of 30 July 2002 (the 2002 Law) governing certain commercial practices and prohibiting unfair competition, as amended, prohibits anti-competitive practices such as sale at a loss. This anti-competitive practice may be considered as an abuse of a dominant position if exercised by one or several undertakings in a dominant position in the relevant market.

The 2011 Law provides for the enforcement of articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) (ex articles 81 and 82 of the EC Treaty) and basically mirrors EU Regulation No. 1/2003.

The 2011 Law does not change the provisions of the prohibition of any abuse by one or more undertakings of a dominant position with the market (article 5 of the 2011 Law) but provides for various changes to the competition law regime:

the merger of the Investigation Division into the Council of State (the Council) (see question 33); the modification of the proceedings in order to make them more effective and less cumbersome; the differentiation of the maximum amount of the fines according to whether the undertaking was a party to a cartel, has abused its dominant position or has refused to submit information to the Council during the investigation of the case; and the adaptation of the leniency regime to the European Competition Network Model Leniency Programme. 2 Non-dominant to dominant firm

Does the law cover conduct through which a non-dominant company becomes dominant?

No. Since article 5 of the 2011 Law mirrors article 102 TFEU, only the abuse of a dominant position by one or several undertakings is prohibited by the 2011 Law.

3 Object of legislation

Is the object of the legislation and the underlying standard a strictly economic one or does it protect other interests?

In accordance with the preparatory parliamentary documents of the 2004 Law, although these documents are not legally binding, the underlying standard is almost identical to the standard applicable under article 102 TFEU, which is an economic one.

The economic object of the Luxembourg competition law was further explained in the preparatory documents of the 2011 Law. In accordance with these documents, the object of the 2011 Law is the protection of competition as an instrument to achieve competitiveness, on both macro- and micro-economic levels.

4 Non-dominant firms

Are there any rules applying to the unilateral conduct of non-dominant firms? Is your national law relating to the unilateral conduct of firms stricter than article 102 TFEU?

No. Since article 5 of the 2011 Law is a copy of article 102 TFEU, the 2011 Law is as strict as article 102 TFEU.

The 2011 Law does not provide for any rules applying to the unilateral conduct of non-dominant firms. But the 2002 Law prohibits unfair competition practices, such as sale at a loss, whether or not the relevant undertaking is in a dominant position.

5 Sector-specific control

Is dominance regulated according to sector?

Competition law in principle applies to all economic sectors. However, certain sectors are regulated by specific rules under the supervision of a regulator. The Luxembourg regulatory authority (the ILR) is the regulatory body for:

the postal sector (Law of 15 December 2000 on postal services and financial postal services, as amended); the electronic communications sector (Law of 21 February 2011 on the networks and services of electronic communications); the electricity sector (Law of 1 August 2007 on the organisation of the electricity market, as amended); and the gas sector (Law of 1 August 2007 on the organisation of the natural gas, as amended). One of the main functions of the ILR is to open the postal, electronic communications, gas and electricity markets to competition.

In accordance with article 76(2) of the law of 27 February 2011 on the networks and services of electronic communications (the ILR Law), the jurisdiction of the ILR should not interfere with that of the Luxembourg competition authorities, even though in practice such interference may occur.

6 Status of sector-specific provisions

What is the relationship between the sector-specific provisions and the general abuse of dominance legislation?

The general abuse of dominance legislation may interfere with sector-specific provisions such as the prohibition of squeeze-out practices or of entry barriers to the access of essential facilities.

Furthermore, article 19 of the 2011 Law authorises the competition authorities to request information, including confidential information, from other regulatory bodies of the various sectors.

Article 76(1) of the ILR Law provides that the ILR cooperates with the competition authorities.

7 Enforcement record

How frequently is the legislation used in practice?

The Luxembourg competition authorities were appointed on 29 October 2004. Only six decisions have been rendered so far by the Council on cases involving alleged abuse of dominant position. The first decision dealt with the refusal to grant storage capacities for petroleum products (in which the Council held that part of the investigation had not been done properly); the second and third decisions related to the insurance sector and more particularly the damage surveys for car accidents (in which no infringement of the 2004 Law or of the former law of 17 June 1970 has been recorded) and the fourth decision is based on further investigations requested by the Council in its first decision (in which the Council concluded that an abuse of dominant position occurred but found grounds to justify it).

The two more recent decisions of the Council both...