Newsletter-21

131 COMPETITION LAW Price / Margin Squeeze* Prof. Dr. H. Ercument Erdem Introduction Dominant undertakings have a unique responsibility to ensure that their conduct does not distort competition in a particular market for goods or services. However, in some cases, such undertakings may use their dominance to obstruct others and to restrict their options, such as cases of ‘price squeeze.’ The term of ‘price squeeze’ (also referred to as ‘margin squeeze’) corresponds to an anticompetitive practice that occurs when there is a narrow margin between an integrated provider’s price to sell essential inputs to a rival and its downstream price that the rival cannot survive or effectively compete 1 with. Price squeeze cases before the competition authorities are rela- tively common. Many of the price squeeze cases particularly arise in the telecommunications sector, but also in other sectors, such as water, railways, postal services, pharmaceuticals, pay television and gasoline sectors, etc 2 . ‘Price Squeeze’ as an Abuse of Dominant Position Art. 6 of Act No. 4054 on the Protection of Competition (“Act No. 4054”) entitled ‘Abuse of Dominant Position’ covers a general prohibition of abuse of dominant position with a list of particular cases deemed as abusive. Although ‘price squeeze’ is not explicitly specified under this list, it is regulated as a form of abuse in the Guidelines on * Article of November 2016 1 OECD DAF/COMP(2009)36, Policy Roundtable on Margin Squeeze, avail- able at: http://www.oecd.org/regreform/sectors/46048803.pdf (Accessed on: 07.12.2016). 2 OECD DAF/COMP(2009)36, Policy Roundtable on Margin Squeeze, p. 8.