Article 101 – The fundamentals and the concept of agreements

Question 1

The meaning of “Undertakings”

Answer 1

Engaged in an economic activity
- Offering goods an services on a market
- No need for profit motivation or economic purpose (can offer services for free and still be an undertaking)
- The legal form of the undertaking is irrelevant

Private or public ownership
- Can both be considered an undertaking, if engaged in an economic activity
- Public –> will not be considered an undertaking if the activity is exercising the powers of a public authority

Activities that are not economic
- Solidarity –> social security
- Exercise of public powers
- Procurement pursuant to a non-economic activity –> fx public bodies providing healthcare on the basis of solidarity, the ancillary procurement of medicin is not economic either

Employees
- Form part of the economic unit of the undertaking and will therefor not constitute an undertaking
- The company where the employee is employed will probably be considered an undertaking
- Selfemployed –> will be considered as an undertaking
- Important to consider whether the person has the freedom to choose the time, place and content of the work

Professions considered undertakings
- Lawyers, accountants

Question 2

The Requirements

Answer 2

1. Affecting trade between Member States
2. Agreements, decisions and concerted practice
3. Undertakings
4. Restriction of competition

Question 3

The meaning of “associations of undertakings”

Question 4

Single economic entity

Answer 4

If two or more undertakings form a single economic entity, there wil be no agreement between undertakings

Considers whether the subsidiary have real autonomy in determining their course of action or just follows instructions from the parent
- Decisive influence is key

100 % owned –> Presumption that parent company exercises decisive influence

60-80 % owned –> No presumption, has to prove the decisive influence

0-60 % owned –> if conditions are right (ability to control commercial policy)

Joint venture –> Full funtioning under EUMR does not mean that the parents cannot exercise decisive influence under art. 101

Reorganisation
- Successor may be held liable, if there is a functional and economic continuity

Selling of the undertaking
- UP –> The undertaking remains liable for the infringement rather than the aquirer
- U1 –> The original infringer has ceased to exist, then the aquirer may be held responsible

Question 5

Agreement

Answer 5

There needs to be an understanding between undertakings conspiring to restrict competition

No requirement of an enforceable agreement
- Oral agreements are also agreements (for the purpose of competition law regardless of national law and tradition)
- Gentlemen’s agreements
- Settlement of disputes, e.g. patent or trademark disputes even if involving the courts
- Mutual understanding
- Standard forms or conditions
- Bylaws of organizations or groups

Excuses that are not accepted
- Group pressure is not an excuse
- Nor (claiming) to have slept during the meeting
- The agreement was never implemented
- Not even an excuse that you in practice have declined to implement the cartel provided that you in other ways have consented, e.g. by continuing your participation in meetings etc.

Question 6

Decision

Answer 6

Covers the situation where a trade association imposes a decision that serve to coordinate the conduct of its members or those subject to its authority

Question 7

Concerted practice

Answer 7

Anything short of an agreement or decision which nevertheless allows competitors to coordinate their business behavior

Requirements
- Consent (you must have consented to something)
- Meeting of minds (on something restricting or distorting competition)
- An restriction or distortion of competition, (put it into effect) –> The ability to distort or restrict is perhaps sufficient
- In short: You must have consented to something that restricts or distorts competition and (most likely) put it into effect

Information exchange
- Can amount to concerted practice, where it reduces strategic uncertainty in the market

In the absence of another plausible explanation for the contact and conduct, there will be a presumption of a concerted practice
- The undertakings have to produce evidence to cast doubt on the casual connection between competitor contact and conduct

Question 8

Single and continuous infringement

Answer 8

Undertakings bear responsibility, even though they may not be involved in every aspect of the infringement

Three conditions
1. Existence of an overall plan pursuing a common objective
2. Intentional contribution of the undertaking to that plan
3. Awareness of the offending conduct of the other participants

Implications
- Each undertaking is responsible for the conduct of the other undertakings
- The Commission will not be time-barred when imposing fines

Question 9

Unilateral conduct

Answer 9

Pure unilateral behavior will not constitute an agreement

Art. 101 requires an understandig and consensus between two or more undertakings

AEG
- Relatively easy to find an agreement/concerted practice, when there is a strong mutal interest
- Selctive distribution, where qualified distributors were excluded because they would undercut the price

Ford
- Shielding of distrubutors from parallel import

Bayer
- The market conditions allowed for Bayer to restrict the amount of medicine sold to Spain and France, so that they did not have the ability to import the medicine to UK
- Argued that there were an agreement between Bayer and the UK distributors
- Just because the actions from Bayer, produces the same effect as an export ban, does mean that there is one