Chapter 17 Flashcards
What are the three domains of Competition Law and which articles regulate them?
- Prohibition of cartels (Art.101 TFEU)
- Abuse of dominant position (Art.102 TFEU)
- Mergers
What is a cartel?
It is a group of similar and independent companies which agree together to fix prices and to limit production or development in a type of restriction of competition
What are the conditions for a forbidden cartel to occur?
- Figure out if there is a distortion of competition (an artificially increase in the prices)
- Is there a cartel: agreement or concerted practice (behave accordingly even if there is no written agreement, the Commission is authorised to see their behaviour as a concerted practice)
- Are we talking about undertakings (an entity engaged in an economic activity)
- Exemptions in case they can prove that the cartel is necessary if it benefits the consumer or also where there is no substantial distortion
What is the leniency policy?
When you are in a forbidden cartel, the first to inform the Commission about this, is going to get away without a fine
Which agreements does Art.101 TFEU cover?
It covers only the agreements which may affect trade between MS
What is considered an abusive behaviour in Art.102 TFEU?
- Excessive pricing
- Refusal to supply
- Discretionary pricing
- Tying or bundling
What is a dominant position?
It is assessed by the Commission and it is reached when the market share of an undertaking exceed 50%, the business has indeed a dominant position
What does it mean that a dominant position is so if it is in a relevant market?
It means that if the market is small, there is in fact a dominant position, because for an undertaking which is above 50% of market share, it is easy to have a dominant position in a small market
What is a merger?
It is an acquisition and a fully functional joint venture
What is the scope of Merger Control?
It is to prevent illegal behaviour, controlling the mergers of undertakings.
Was there any regulation? What did the Court do?
There was no regulation indeed and with the cases Continental Cannes and British American Tobacco, the Court created the European Union Merger Regulation (EUMR) in order to centralise methods of control.
How did the General Compatibility Test change?
In 1989 there were two tests:
- dominant test (and if passed)
- SIEC (Significant Impede Effective Competition) test to see if the competition was reduced by that merger
In 2004
- no dominant test
- only SIEC test to see if the merger reduces effective competition in the market
