What is an economic dominant position?

"Economic dominance" (also referred to as dominant market position or significant market power) is the situation in which an undertaking holds such a strong position that it can act independently of its competitors and customers or hardly gives others the chance to sell their products or services.

Economic dominance often arises from a combination of factors, such as a high concentration ratio, homogeneous products, high barriers to entry, a saturated market, or symmetry between the major parties in terms of market share and cost structure.

Although having economic dominance is not necessarily contrary to the law (such as the Dutch Competition Act), the abuse of it is prohibited. Abuse can manifest in practices such as tying and bundling, offering products below cost price to deter new entrants, or demanding excessive prices.

Regulators, such as the European Commission and the Netherlands Authority for Consumers and Markets, supervise concentrations of undertakings to prevent economic dominance from distorting or reducing competition.