As-efficient-competitor test

The key issue of an analysis according Article 102 TFEU is to differentiate between business conducts that are part of a healthy competition in the market and those conducts that are part of an abusive strategy of a dominant company.

The aim of the "as-efficient-competitor" test is to investigate whether the critical conduct is capable of excluding a competitor which is as efficient as the dominant company. Therefore, a hypothetical competitor having the same costs and efficiency as the dominant company is designed. If the dominant company set prices below marginal costs, the partition of an also efficient competitor can be assumed.

Since the as-efficient-competitor test is a cost-benchmark-test, the choice of the appropriate cost benchmark is crucial for the analysis. The EU Commission chose as benchmarks the average avoidable costs (AAC) or the long-run incremental cost (LRAIC). Additionally, other effects that favour declining costs need to be considered, like the existence of economies of scale and scope, learning curve effects, or first mover advantages.

The exact application of the as-efficient-competitor test as well as the chosen cost benchmarks vary on a case-by case basis.