HP-2020-000016 - [2025] EWHC 1451 (Ch)

Article 3 of the VBER sets out a market share threshold of 30% for each of the supplier and the buyer. It is not suggested that the market shares of any of the toy retailers exceeded 30%. Cabo contended, however, that MGA’s market share exceeded 30% of the market during the relevant period, assuming the relevant period to be 2017; or that MGA had not shown the contrary, if the relevant period under the VBER was in fact 2016.

On my findings above in relation to the abuse of dominance claim, MGA’s market shares did indeed exceed 30% during the period of the agreements in issue, i.e. from May 2017 onwards. For the purposes of the VBER, however, the effect of Article 7(b) is that what is relevant is not the market shares during the period of the agreements, but rather the market shares during the “preceding calendar year”.

Cabo relied on Case T-419/03 Altstoff Recycling Austria v Commission EU:T:2011:201, §96, in which the General Court noted that (for the purposes of the application of an identical provision in Regulation 2790/1999, the predecessor to the VBER) in the case of “new markets”, the supplier’s market share can only be calculated from the time at which the market was created. That of course makes sense where, due to the creation of a new market, market shares cannot be calculated for the purposes of Article 3 of the VBER for the year preceding the conduct in issue. That does not mean, however, that Article 7(b) can simply be disapplied in every case where market shares fluctuate on a given market. On the contrary, Article 7(e) makes clear that even if one of the parties’ market shares rises above 35% (from an initial share of 30% or below), the exemption will apply for a calendar year following the year in which the level of 35% is first exceeded.

In the present case, however, the market did exist in 2016 (i.e. the calendar year before the agreements commenced), and MGA was a supplier on that market (with Num Noms). It is therefore relevant to consider whether MGA’s market share was below 30% during that year. It is not disputed that MGA bears the burden of proof on this point, as the party claiming the benefit of the exemption: see by analogy Network Rail v Achilles [2020] EWCA Civ 323, §105.

While the evidence as to MGA’s market share during 2016 is incomplete, there is enough before the court to make it clear that MGA’s market share very likely did not exceed 30% during 2016. Mr Colley did not calculate market shares during 2016, but Mr Parker provided calculations of market shares for June to December 2016, based on Mr Colley’s preferred market definition, which showed MGA’s market shares ranging from 7.91% to 14.56% during that period. There is nothing in any of the evidence before the court to suggest that MGA’s market share during the early part of 2016 was so significantly different as to change the conclusion that MGA’s market share was indeed well below 30% throughout 2016, assuming Mr Colley’s market definition. Nor do the market share comparisons set out at §§261 and 271 suggest that a different conclusion might be reached for the extended Colley market.

On the basis of both Mr Colley’s market definition and the extended Colley market, MGA’s market share only exceeded 35% in early2017. Accordingly, on the basis of Article 7(e) of the VBER, the benefit of the exemption continued to apply throughout the period of the agreements at issue in the present case.