Boundary Fares: clarifying the boundaries of a dominant firm’s special responsibility

What the paper says

This article examines the economic implications of the Competition Appeal Tribunal’s judgment in Gutmann v. First MTR South Western Trains , which clarifies the limits of the exploitative abuse doctrine under competition law. It addresses a key question arising from a case where there was no distortion of competition by a dominant firm: where does legitimate commercial conduct end and exploitative consumer harm begin? The Tribunal held that a dominant firm’s ‘special responsibility’ does not require it to maximize consumer outcomes. But what conditions are required to consider conducting an unfair trading practice? Three economic considerations emerge: commercial intent and proportionality, the distinction between the potential for welfare improvements versus unfair rent extraction, and the high evidentiary threshold. The article concludes that competition law protects against the abuse of market power, rather than all sub-optimal outcomes, reinforcing the boundary between competition enforcement and consumer protection regulation.