Margin squeeze in development: Christian Bergqvist, Associate Professor, University of Copenhagen

Unlike other forms of abuse, margin squeeze entered competition law at a relatively late stage. As recently as 2008, parts of the European Commission did not consider it an independent form of abuse. Today, margin squeeze is a well-established category; however, its development
has been controversial, and the concept has therefore been referred to as the “Frankenstein’s
monster” of Article 102 TFEU.

Christian Bergqvist will review the historical development of the concept, the key cases, and
its relationship with other forms of abuse. In particular, he will address how overlaps between
legal categories may increase the risk of error — both where intervention occurs despite the
conduct not satisfying the applicable legal test, and where intervention targets conduct that
does not, in fact, harm competition or consumer welfare.

The Legal Complexities of Margin Squeeze: Jens Munk Plum, Partner, and Director Peter Barslev, both Kromann Reumert, Law Firm

When is an input “indispensable” or “necessary”? How should relevant markets be defined, and how does a potential margin squeeze affect market definition? When are downstream conditions so restrictive that an “as-efficient competitor” cannot viably operate, and how should this be assessed in practice? What elements may be included in the relevant revenue and cost bases?

Margin squeeze cases are characterised by a number of significant discretionary assessments. Drawing on their experience, Jens Munk Plum and Peter Barslev will offer their perspective on these issues and their methodological approach to addressing them.

How to Calculate an Alleged Margin Squeeze: Jesper Toelberg Bjerre, Chief Advisor, The Danish Competition and Consumer Authority (Konkurrence- og Forbrugerstyrelsen)

A central element in any margin squeeze case is the price–cost test, which is, in principle, straightforward. In practice, however, a wide range of issues arise, including the measurement of costs, the timing and allocation of revenues and depreciation, and the determination of a reasonable rate of return.

Drawing on specific cases, Jesper Toelberg Bjerre will examine how these challenges have been addressed in practice. He will also discuss insights from the economic literature on theories of harm in relation to margin squeeze, in particular the circumstances under which a dominant undertaking may have an incentive to exclude equally efficient competitors.