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Public Law 3 (EU and ECHR) > Cartels > Flashcards

Cartels Flashcards

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1
Q

What does the EU rely on competition in a free and fair market?

A
  • Benefits of lower prices
    Access to goods
  • efficiency and innovation
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2
Q

Which article of TFEU prohibits anti-competitive collusion between undertakings, which prohibits, restricts or distorts competition in the EU?

A

Article 101

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3
Q

What did the European Commission publicity define cartels as?

A

Cartels are secret agreements between competitors to fix prices, limit production, or share markets or customers, including bid-rigging, and are illegal

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4
Q

What is meant by the following, in relation to Cartels?

(a) Fix prices
(b) Limit production
(c) share markets or customers
(d) bid-rigging

A

(a) Customer pays more, sellers make excessive profits
(b) Supply does not meet demand, so prices are higher
(c) Customer has no choice, so cannot benefit from competition
(d) E.g. agree who will bid lowest, falsely high bids to make others look good, take turns to bid or not

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5
Q

What happened in the ‘Parker Pen’ case?

A
  • Dutch Company wished to buy Parker Pens from subsidiary in Germany
  • Subsidiary refused, directed to their Dutch subsidiary
  • Company complained to Commission that Parker’s arrangement was contrary to article 101
  • Q. to Court were Parker’s subsidiaries constituted as different legal entities
    HELD - NO, Parker and subsidiaries formed single unit, subsidiaries had no autonomy
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6
Q

What happened in Nobel v Commission [2009]?

A
  • Q. could Commission take action against parent company, who’s subsidiary acted in a Cartel
    HELD -ECJ stated where Parent company had 100% shareholdings in its subsidiary there is a rebuttable presumption that parent company exercises decisive influence over subsidiary conduct
  • Commission will be able to hold Parent company liable for payment of fine on subsidiary unless parent company can prove subsidiary acts autonomously on market.
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7
Q

What happened in Ford v Commission?

A
  • Ford stopped the supply of left hand drive cars to Germany (sent on to UK)
  • Court held that Ford’s decision to stop supply to Germany formed part of the contractual relations between the undertaking and its dealers
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8
Q

What is the definition of concerted practices?

A

A form of cooperation between undertakings which, without reaching the stage of an agreement, knowingly substitutes practical cooperation between them for the risks of competition.

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9
Q

What rules did the ‘woodpulp’ case establish?

A
  • Fact that prices are similar did not itself constitute improper collaboration
  • Any concerted practice is unlawful, even where no full agreement
  • Parallel conduct can establish acting together, But only were it is the only plausible explanation for behaviour
  • Undertakings outside the EU can be penalised if it effect on EU market
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10
Q

What happened in the case of Commission v Bayer [2004]?

A
  • Spanish and French wholesalers began exporting ADELATE to UK, where drug prices were 40% higher
  • Bayer group changed policy and refused to meet all orders placed by Spanish and French wholesalers
  • Wholesalers complained that this was acting contrary to article 101 and Commission agreed
    OVERTURNED by CFI on the grounds that the Commission did not prove there was an agreement, as defined by article 101, between companies
    -
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11
Q

What did UA &; Others v Commission decide?

A

NO actual plan is required

  • Case law of concerted practices makes clear that positive contact between parties, with object of influencing market to remove competition is illegal
  • Each operator must determine independent policy which he intend to adopt on common market
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12
Q

What did the case of ‘Westfalen Gassen Nederland v Commission establish?

A

That it is possible for an undertaking to exonerate itself from participation in Cartel

  • Undertaking must publicly distance itself from what is agreed in meetings
  • Must also inform other participants that it did not wish to be considered a member of the cartel, nor to participate in meetings that were for concerted practices.
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13
Q

What are horizontal agreements?

A

one between those at the same level of distribution

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14
Q

What are vertical agreements?

A

one between different levels, e.g. manufacturer and distributor

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15
Q

‘Consten and Grundig 1966’ established what?

A

Article 101 applied to vertical agreements.

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16
Q

What did Societe Techniqie Miniere v Maschinebau (1966) establish?

A

Not all exclusive agreements are unacceptable

  • Case concerned exclusive distribution
  • there was no attempt in this case to ‘seal off’ the allocated territory
  • Agreement did not have the ‘object’ of prevention, restriction or distortion of competition
  • Its effect on competition had to be established.
17
Q

The case of Societe Techniqie Miniere v Maschinebau stated that when ‘granting an exclusive right of sale’ it is to be considered prohibited by reason of object or of its effect in what circumstances?

A
  • the nature and quantity, limited or otherwise, of the products covered by the agreement
  • the position and importance of the grantor and the concessionnaire on the market for the products concerned
  • the isolated nature of the disputed agreement or, alternatively, its position in a series of agreements,
  • the severity of the clauses intended to protect the exclusive dealership
  • the opportunities allowed for other commercial competitors in the same products by way of parallel re-exportation and importation
18
Q

What happened in the ‘Volk (1966)’ case?

A

De minimis principle established
- An agreement which would potentially fall within article 101 TFEU, is not caught by prohibition if it does not have an appreciable effect on competition

19
Q

What did the ‘Expedia (2012)’ case establish?

A

Article 101 TFEU does not apply to agreements that have no appreciable effect on competition.

20
Q

What did the ‘expedia (2012)’ make clear about when there was a breach of Article 101

A
  • Always caught if the purpose is to prevent, restrict or distort competition.
21
Q

When would an agreement not be in breach of article 101 TFEU?

A

Where it does not appreciably restrict competition

22
Q

Where in the TFEU are exemptions to Article 101(1) detailed

A

Section 101(3)

23
Q

How is it decided on whether an agreement breaches article 101?

A

Regulation 1/2003

  • task shared with national competition authorities
  • Commission deals with major cross border cases.
24
Q

What are block exemptions?

A

– regulations which set out a number of requirments and prohibited clauses for contracts
- When fulfilled exemption will be automatic in particular cases of agreements which comply with the block exemption terms

25
Q

How do block exemptions work in regard to Vertical agreements?

A
  • Allows companies which do not have market power (less than 30% Of market) to benefit
  • no longer necessary for them to assess the validity of their agreements
26
Q

When are block exemptions not allowed?

A

If there are certain “hardcore restrictions” included.

27
Q

When will blocked exemptions be allowed for horizontal agreements?

A

For licensing agreements for the transfer of technology.

28
Q

Who enforces article 101 of TFEU?

A

Shared enforcement between the Nation Competition Authority and the Commission under Regulation 1/2003

29
Q

What are undertakings at risk at for being in breach of Article 101?

A

Very big fines from the Commission

30
Q

When will special lenient treatment be given to undertakings?

A

Those who come forward and admit participation in a cartel

31
Q

Who may implement direct enforcement?

A

Individual (companies) who have suffered from anti-competitive practices

32
Q

What does article 1 of Regulation 1/2003 state?

A

Does away with system of prior approval system

33
Q

What does article 2 of Regulation 1/2003 state?

A

burden of proof on the authority alleging breach of the Treaty

34
Q

What does article 7 of Regulation 1/2003 state?

A

where infringement found, can order parties to bring it to an end, including changing behaviour or structure

35
Q

What does article 9 of Regulation 1/2003 state?

A

where intending enforcement action, can accept undertakings from parties to put things right and these become binding

36
Q

What does article 17 of Regulation 1/2003 state?

A

investigations into sectors of the economy or types of agreements

37
Q

What does article 18-20 of Regulation 1/2003 deal with?

A

wide powers to require information, inspect documents and search premises (“dawn raids”

38
Q

What does article 23 of Regulation 1/2003 state?

A

fines for intentional or negligent offending: up to 10% of turnover for substantive breach, 1% for obstruction

Public Law 3 (EU and ECHR) (5 decks)

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