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European Court upholds EC's Michelin fine

A company in a dominant position, which operates a system of loyalty rebates and bonuses for its dealers, thereby strengthens its position to the detriment of other operators and thus impedes normal competition, confirmed the European Court of First Instance this week, in rejecting an appeal by Michelin against a €19.76m fine for operating retrospective quantitative discounts and service quality bonuses to its distributors.

In 2001 the Commission adopted a decision that Michelin had abused its dominant position, in that, in France, Michelin's commercial and pricing policy towards its dealers was based on a complex system of discounts, refunds and/or other financial advantages. The main objective of the policy was to tie dealers to the company and to maintain the company's market share and consequently to undermine competition in the common market. The Commission fined Michelin €19.76 million.

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