Michelin v Commission (1983)

Commission brought Article 86 (now 82) action against
Michelin for practice of awarding discounts on tyre sales which were not
related to differences in costs – designed to tie purchasers to Michelin.
Michelin held to have dominant position in market for
new replacement tyres for lorries and buses.
Michelin argued this definition of product market was
arbitrary and should include tyres for car and vans, and for re-treads.
ECJ held no interchangeability between car and van
tyres on one hand heavy vehicle tyres on the other, so car and van tyres have
no influence on competition in market for heavy vehicle tyres.
Also structure of demand in each group is different –
most buyers of heavy vehicle tyres are trade users.
Also no elasticity of supply between heavy vehicle
tyres and car tyres owing to sig differences in production techniques.
Hence Commission’s definition of market correct.
[Problem here is that market not analysed properly.
People who buy Michelin are like people who buy Nike
trainers – branding is big influence.
People who buy Michelin tyres unlikely to switch to
‘Mr Cheapo’ tyre as alternative.
Also, Korah has criticised analysis of supply side in
this case as too short term]