competition law

Question 1

Why was the idea of competition law first raised in the US?

Answer 1

to counter anti-competitive common law trust effects the US legislator adopted the first competition law of the modern world: the Sherman Antitrust Act 1890

Question 2

the idea of competition law first raised in the US to counter anti-competitive common law trust effects, so the US legislator adopted the first competition law of the modern world:
what was it called?

Answer 2

the Sherman Antitrust Act 1890

Question 3

What was section 1 and 2 of the Sherman Antitrust Act 1890?

Answer 3

1) that every contract, or form of trust, or conspiracy in restraint of trade or commerce is declared illegal

section 2) every person who does, or attempts to conspire with another person or persons to monopolise any part of the trade or commerce among several states, or foreign nations, shall be deemed guilty of a felony

Question 4

the meaning of what competition, is controversial

what are the two US schools?

Answer 4

• Harvard School: that competition law is to prevent harm to consumers as well as harm to competitors
• Chicago School sees the enhancement of ‘consumer welfare’ as the sole objective of competition law

Question 5

What does the Harvard School think?

Answer 5

that competition law is to prevent harm to consumers as well as harm to competitors

Question 6

What does the Chicago School think?

Answer 6

sees the enhancement of ‘consumer welfare’ as the sole objective of competition law

Question 7

The primary function of EU competition law was originally not competition but the internal market.

Where can the competition provision be found in the TFEU?

Answer 7

in Chapter 1 Title VII of the TFEU which deals with internal market matters

Question 8

What happened in the case of Costen and Grundig?

Answer 8

The ECJ found that an exclusive distribution agreement in which the distributor was to enjoy an absolute territorial protection restricted competition by object
The Treaty, whose preamble and content aim at abolishing the barriers between States, could not allow undertakings to reconstruct such barriers.

Question 9

The ECJ found that an exclusive distribution agreement in which the distributor was to enjoy an absolute territorial protection restricted competition by object
The Treaty, whose preamble and content aim at abolishing the barriers between States, could not allow undertakings to reconstruct such barriers.

which case?

Answer 9

Costen and Grundig

Question 10

main case in competition law

Answer 10

Costen and Grundig

Question 11

what are the 3 pillars of private undertakings?

Answer 11

Pillar 1: anticompetitive cartels Article 101

Pillar 2: situations where a dominant undertaking abuses its market power Art 102

Pillar 3: Invisible, Treaty did not conclude the control of mergers

Question 12

What is pillar 1?

Answer 12

anticompetitive cartels Article 101

Question 13

what is pillar 2?

Answer 13

situations where a dominant undertaking abuses its market power Art 102

Question 14

what is pillar 3?

Answer 14

Invisible, Treaty did not conclude the control of mergers

Question 15

Pillar 1: anticompetitive cartels Article 101

what does it state?

Answer 15

the following shall be prohibited: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between MS and which have as their object or effect the prevention, restriction or distortion of competition within the internal market

Question 16

the following shall be prohibited: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between MS and which have as their object or effect the prevention, restriction or distortion of competition within the internal market
which article?

Answer 16

Pillar 1: anticompetitive cartels Article 101

Question 17

what is an undertaking as defined by Hofner and Elser?

Answer 17

o Concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed

Question 18

o Concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed

who defined this?

Answer 18

Hofner and Elser

Question 19

Court has persistently held that Article 101 does not apply to the ‘internal’ relationships within an undertaking.
what does this mean?

Answer 19

that the relationship between a company and its workers is outside the scope of Article 101

Question 20

This doctrine is not confined to relationships within one legal entity, therefore what kind of relationships can it cover?

Answer 20

relationships between independent undertakings if they form part of a corporate group
The decisive criterion is control

Question 21

What are the 3 types of collusions covered by Art 101?

Answer 21

agreements between undertakings, decisions by associations of undertakings and concerted practises”

i. Agreements: Horizontal and Vertical
ii. Concerted Practices
iii. Decisions of Cartels

Question 22

the 3 types of collusions covered by Art 101 are

i. Agreements: Horizontal and Vertical
ii. Concerted Practices
iii. Decisions of Cartels

What is a case example of a vertical agreement?

Answer 22

Costen & Grundig

Article 101 refers in a general way to all agreements which distort competition within the common market and does not lay down any distinction between those agreements based on whether they are made between competitors operating at the same level in the economic process, or between non-competiting persons operating at different levels

Question 23

Article 101 refers in a general way to all agreements which distort competition within the common market and does not lay down any distinction between those agreements based on whether they are made between competitors operating at the same level in the economic process, or between non-competiting persons operating at different levels

which case and area?

Answer 23

Costen & Grundig

the 3 types of collusions covered by Art 101 are

i. Agreements: Horizontal and Vertical
ii. Concerted Practices
iii. Decisions of Cartels

Question 24

what is a tacit acquiesence?

Answer 24

agreement or consent by silence or without objection;

Question 25

what 2 cases come undertacit acquiesence?

Answer 25

Ford Werke

Bayer v Commission

Question 26

2 cases come undertacit acquiesence
Ford Werke and
Bayer v Commission

explain the first?

Answer 26

Ford made cars, UK charged higher prices, so a company imported cars from Germany to UK. Ford then told german markers to stop selling right-handed cars,
concerted practise.
The decision formed part of the contractual relations between the undertaking and its dealers

Question 27

2 cases come undertacit acquiesence
Ford Werke and
Bayer v Commission

explain the second

Answer 27

Prices of these drugs were different across the EU just to differences between national health authorities, lower in France and Spain. So spain and France exported great amounts of drugs to the UK.

France, until they only supplied them with enough to cover national markets. He denied that the policy was implemented through any agreement.
This was real unilateral behaviour. No tacit agreement and so Bayer acted lawfully because it simply made a unilateral decision.

Question 28

Ford made cars, UK charged higher prices, so a company imported cars from Germany to UK. Ford then told german markers to stop selling right-handed cars,
concerted practise.
The decision formed part of the contractual relations between the undertaking and its dealers

which case

Answer 28

Ford Werke

Question 29

France and Spain. So spain and France exported great amounts of drugs to the UK.

France, until they only supplied them with enough to cover national markets. He denied that the policy was implemented through any agreement.
This was real unilateral behaviour. No tacit agreement and so Bayer acted lawfully because it simply made a unilateral decision.

which case?

Answer 29

Bayer v Commission

Question 30

What was the concept of a concerted practise aimed to do?

Answer 30

it was designed as a safety net to catch all forms of collusive behaviour falling short of an agreement.

Question 31

What is at the heart of a concerted practise?

Answer 31

the practical ‘coordination’ between undertakings. Unlike agreements, this coordination is not consensually agreed.

Question 32

what case comes under concerted practise?

Answer 32

Imperial Chemical industries:

‘a concerted practise does not have all the elements of a contract but may inter alia arise out of coordination which becomes apparent from the behaviour of the participants’

Question 33

‘a concerted practise does not have all the elements of a contract but may inter alia arise out of coordination which becomes apparent from the behaviour of the participants’

which case and area

Answer 33

Imperial Chemical industries:

concerted practises

Question 34

Why is there a jurisdictional limitation around Article 101?

Answer 34

Because of the principle of conferral. The European Union should only concern itself with agreements that have a European dimension.

The European dimension shows itself through the potential effects on trade between MS.

Question 35

which area does the pattern of trade test come under?

Answer 35

concerted practises

Question 36

What case demonstrates the pattern of trade test?

Answer 36

Costen & Grundig
Where ‘the agreement is capable of constituting a threat, either direct or indirect, actual or potential, to freedom of trade between MS in a manner which might harm the attainment of the objectives of the single market between States

Question 37

Where ‘the agreement is capable of constituting a threat, either direct or indirect, actual or potential, to freedom of trade between MS in a manner which might harm the attainment of the objectives of the single market between States
e.g where the agreement or practise is liable to affect the competitive structure
which case and area

Answer 37

Costen & Grundig
demonstrates the pattern of trade test?
concerted practises

Question 38

In order for an agreement to violate Article 101(1), it must be anti-competitive

therefore it must be what? (3)

Answer 38

Therefore it must be a ‘prevention, restriction or distortion of competition’

Question 39

You can violate EU competition law ‘by object’ but this does not mean that purely imaginary restrictions that may have been ‘intended’ in the future are covered
Art 101 does not cover what?

Answer 39

subjective intentions of the parties.
It refers only to the objective content of the agreement. What are the hard-core restrictions that the Union legal order considers restrictions by object?

Question 40

what does Art 101(1) state?

Answer 40

Article 101(1)…

a) Directly or indirectly fix purchase or selling prices or any other trading conditions
b) Limit or control production, markets, technical development, or investment
c) Share markets or sources of supply

Question 41

What are the hard-core restrictions that the Union legal order considers restrictions by object?

Answer 41

Article 101(1)…

a) Directly or indirectly fix purchase or selling prices or any other trading conditions
b) Limit or control production, markets, technical development, or investment
c) Share markets or sources of supply

Question 42

According to Article 101(3), Article 101(1) will not apply to an agreement ‘which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (2)

Answer 42

a) Impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives
b) Afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question

Question 43

According to Article 101(3) , when will Article 101(1) not apply?

Answer 43

Article 101(1) will not apply to an agreement ‘which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (2)

Impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives
b) Afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question

Question 44

what does Pillar Two: article 102 focus on?

Answer 44

This second pillar of EU competition law focuses on the bad behaviour of a single undertaking. Article 102 does not require the collusive behaviour of two or more economic actors. It sanctions the unilateral behaviour of a dominant undertaking where this behaviour amounts to a market abuse

Question 45

o Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States
which pillar and article does this come under?

Answer 45

Pillar 2: Article 102 situations where a dominant undertaking abuses its market power

Question 46

Under Pillar 2 Article 102: situations where a dominant undertaking abuses its market power
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States
Such abuse may consist in what (4)?

Answer 46

a) Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions
b) Limiting production, markets or technical development to the prejudice of consumers
c) Applying dissimilar conditions to equivalent transactions with other trading parties, placing them at a competitive disadvantage
d) Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, have no connection with the subject of such contracts

Question 47

a) Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions
b) Limiting production, markets or technical development to the prejudice of consumers
c) Applying dissimilar conditions to equivalent transactions with other trading parties, placing them at a competitive disadvantage
d) Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, have no connection with the subject of such contracts

what area is this under

Answer 47

Under Pillar 2 Article 102: situations where a dominant undertaking abuses its market power

Question 48

By concentration on a ‘dominant position with the internal market’, this article goes beyond pure monopolies and is thus wider than its US counterpart. But in insiting on market abuse, it is also narrower than the US prohibition, why is this?

Answer 48

Article 102 will not directly outlaw the creation of market dominance, only the abuse of a dominant position

Question 49

Like article 101, when will the prohibition of market abuse will only apply to Art 102?

Answer 49

Like Article 101, the prohibition of market abuse will only apply where an abusive behaviour ‘may affect trade between Member States’ but when this abuse is shown to have Union-wide effects, it appears to be prohibited as unlike Article 101, there is no third paragraph exempting abusive behaviour on the ground of its pro-competitive effects

Question 50

A violation of Article 102 implies the satisfaction of only three criteria
Which are?

Answer 50

1) Must establish what the market is in which the undertaking operates
2) The undertaking must be dominant within that market
3) The undertaking must have abused its dominance

Question 51

1) Must establish what the market is in which the undertaking operates
2) The undertaking must be dominant within that market
3) The undertaking must have abused its dominance
which area?

Answer 51

A violation of Article 102 implies the satisfaction of only three criteria

Question 52

What did Hoffman La Roche state were indicators of a dominant position?

Answer 52

Very large market shares are highly significant evidence of the existence of a dominant position

Question 53

Very large market shares are highly significant evidence of the existence of a dominant position
which case and area

Answer 53

hoffman La Roche Pillar Two: article 102

Question 54

The interchangeability of a product typically expresses itself in demand substitution. what is this

Answer 54

This analyses whether the consumer regards two products as interchangeable ‘by reason of the products’ characteristics, their prices and their intended use’

Question 55

When are two goods seen to be in the same product market?

What is the test?

Answer 55

Quantitative test: The principle test here is that of cross-price elasticity. Whether a (SSNIP) small but significant non-transitory increase in price in one product, incentivises consumers to switch to another product. Where this is the case, the two goods are in the same product market

Question 56

what two ways can the court analyse the interchangeability of a product to test they are in the same market?

Answer 56

Quantitative test: The principle test here is that of cross-price elasticity. Whether a (SSNIP) small but significant non-transitory increase in price in one product, incentivises consumers to switch to another product. Where this is the case, the two goods are in the same product market

Qualitative criteria: European Court even analyse the degree of potential competition by future market entrants. Supply substitution. i.e the extent to which an undertaking could switch from a non-competing to a competing product.

Question 57

What is the qualitative criteria in Art 102?

Answer 57

Qualitative criteria: European Court even analyse the degree of potential competition by future market entrants. Supply substitution. i.e the extent to which an undertaking could switch from a non-competing to a competing product.

Question 58

what is the Quantitative test: in Art 102?

Answer 58

Quantitative test: The principle test here is that of cross-price elasticity. Whether a (SSNIP) small but significant non-transitory increase in price in one product, incentivises consumers to switch to another product. Where this is the case, the two goods are in the same product market

Question 59

what is the geographic element European Court has established for market dominance?

Answer 59

European Courts have established a presumption that the territory of a MS constitutes a substantial part of the internal market

Question 60

Dominance is wider than monopoly

What does monopoly refer to?

Answer 60

Monopoly technically refers to a situation in which one single undertaking dominates the market, Article 102 is not confined to that situation.

Question 61

BUT exactly when an undertaking is dominant, the provision does not tell
EC has tried to define dominance by distinguishing it from related phenomena such as monopoly

which is wider

Answer 61

dominance

Question 62

Undertakings compete in different products and different areas, and so there is not one market. There is a product dimension and a geographic dimension.
what do both of these mean?

Answer 62

Product dimension concerns what goods or services compete with each-other
Where two products do not compete, they are not in the same market

Two competing goods must however also physically meet in the same area, this is the geographic dimension

Question 63

Hoffman La Roche defines what is meant by a dominant position

Art 102

Answer 63

o The dominant position relates to a position of economic strength enjoyed by an undertaking which enables it to prevent the effective competition being maintained on the relevant market

o Such a position does not preclude some competition, but enables the undertaking which profits by it, if not to determine, at least to have an appreciable influence on the conditions under which that competition will develop

Question 64

The dominant position relates to a position of economic strength enjoyed by an undertaking which enables it to prevent the effective competition being maintained on the relevant market

o Such a position does not preclude some competition, but enables the undertaking which profits by it, if not to determine, at least to have an appreciable influence on the conditions under which that competition will develop

which case?

Answer 64

Hoffman La Roche

Art 102

Question 65

what is an oligopoly?

Answer 65

oligopolies are market structures in which a ‘few’ undertakings dominate the market

Question 66

the higher the market share, the higher the probability of dominance
which case looks at this and defines this?

Answer 66

AKZO Chemie v Commission:

A market share above 50% was a clear indication of market dominance; but even below this the Court may find market dominance

Question 67

o A market share above 50% was a clear indication of market dominance; but even below this the Court may find market dominance

which case?

Answer 67

AKZO Chemie v Commission:

Question 68

The Commission gave guidance stating that where an undertaking has a market share below ____ a finding of dominance is unlikely

Answer 68

40%

Question 69

o Article 102 refers to ‘an abuse of one or more undertakings of a dominant position’ and so teleologically it should capture _____ undertakings which go beyond parallel courses of conduct as a collective abuse would have the same consequences as that of a single dominant undertaking

Answer 69

oligopolistic

Question 70

the EC o EC belatedly accepted the idea of collective dominance in which case?

Answer 70

Vetro et al v Commission

Question 71

o EC belatedly accepted the idea of collective dominance in Vetro et al v Commission
describe case

Answer 71

Vetro et al v Commission

Three Italian producers of flat glass challenged a Commission decision that had found them guilty of violating Aritlce 102. Their joint market shares were 95% and the Commission claimed that the undertakings would ‘present themselves on the market as a single entity and not just as individuals’.
 Commission pointed to evidence of collusive behaviour under Art 101

 The UK objected that only in very special circumstances should two or more undertakings jointly hold a dominant position within the meaning of Art 102

 However the simple existence of contractual or collusive relations between the three undertakings was not sufficient to establish collective dominance

Question 72

Three Italian producers of flat glass challenged a Commission decision that had found them guilty of violating Aritlce 102. Their joint market shares were 95% and the Commission claimed that the undertakings would ‘present themselves on the market as a single entity and not just as individuals’.
 Commission pointed to evidence of collusive behaviour under Art 101

 The UK objected that only in very special circumstances should two or more undertakings jointly hold a dominant position within the meaning of Art 102

 However the simple existence of contractual or collusive relations between the three undertakings was not sufficient to establish collective dominance

Answer 72

Vetro et al v Commission

Question 73

in which case did the European Court confirmed the General Courts finding that a dominant position may be held by several undertakings

Answer 73

o CEWAL

Question 74

CEWAL European Court confirmed the General Courts finding that a dominant position may be held by several undertakings
What did the court say in this case is necessary to establish the finding of a dominant position?

Answer 74

To establish the existence of a collective entity, it is necessary to examine the economic links or factors which give rise to a connection between the undertakings concerned

 Mere existence of collusion within the meaning of Art 101 was inconclusive, but this collusion could result in the undertakings concerned being linked so as to present themselves on the market as a collective entity; it all depends on the nature and terms of an agreement

Question 75

To establish the existence of a collective entity, it is necessary to examine the economic links or factors which give rise to a connection between the undertakings concerned

 Mere existence of collusion within the meaning of Art 101 was inconclusive, but this collusion could result in the undertakings concerned being linked so as to present themselves on the market as a collective entity; it all depends on the nature and terms of an agreement

Which case?

Answer 75

CEWAL European Court confirmed the General Courts finding that a dominant position may be held by several undertakings

Art 102

Question 76

What counts as an abuse in Article 102 depends on the context, that the behaviour is from a dominant undertaking

The forms of action in this provisoin are not illegal as such, but become illegal why?

Answer 76

illegal because of the standing of the actor within the market as a dominant undertaking has a ‘special responsibility

Question 77

what are the 4 actions under Article 102 which demonstrate actions that will be illegal if the undertaking is a dominant force?

Answer 77

a) Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions
b) Limiting production, markets or technical development to the prejudice of consumers
c) Applying dissimilar conditions to equivalent transactions with other trading parties, placing them at a competitive disadvantage
d) Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, have no connection with the subject of such contracts

Question 78

What two kinds of abuses does 102 cover?

Answer 78

covers both exploitative as well as exclusionary abuses

Question 79

Article 102 covers both exploitative as well as exclusionary abuses why?

Answer 79

as it aimed at practises which may cause damage to consumers directly and also those which are detrimental to them through their impact on effective competition structure – Europemhallage v Commission

Question 80

what is the central aim behind Art 102?

Answer 80

The ‘Maintenance of effective competition on the relevant market

Question 81

How is Art 102 able to applied in associated markets?

Answer 81

Union legal order has developed a wider reading not just confined to the market the undertaking dominants, and includes abuse in adjacent markets in which the undertaking is not dominant

Question 82

Union legal order has developed a wider reading not just confined to the market the undertaking dominants, and includes abuse in adjacent markets in which the undertaking is not dominant
Therefore the Application of Art 102 in associated markets is thus possible
BUT
which court found that Art 102 would only apply in special circumstances to conduct found in the associated market where the undertaking is not dominant?

Answer 82

Tetra Park

Question 83

what case is an example of an illegal action: refusal to supply
Art 102

Answer 83

Istituto Chemioterpico

Question 84

Istituto Chemioterpico is an example of an illegal action: refusal to supply
Art 102
explain case

Answer 84

An undertaking being in a dominant position as regards the production of raw material, and therefore able to control the supply to manufacturers, cannot, just because it decides to start manufacturing these derivatives (in competition with its former customers) act in such a way as to eliminate their competition which in the case in question, would amount to eliminating one of the principal manufacturers in the common market of ethambutol.

Question 85

An undertaking being in a dominant position as regards the production of raw material, and therefore able to control the supply to manufacturers, cannot, just because it decides to start manufacturing these derivatives (in competition with its former customers) act in such a way as to eliminate their competition which in the case in question, would amount to eliminating one of the principal manufacturers in the common market of ethambutol.
case and area

Answer 85

Istituto Chemioterpico is an example of an illegal action: refusal to supply
Art 102

Question 86

Article 102(a)‘directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions.

what is a nickname for this?

Answer 86

predatory pricing’

Question 87

Article 102(a)‘directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions. 
this is predatory pricing 
Which case demonstrates this?

Answer 87

AKZO

AKZO attacked its competitor by offering unreasonably low prices to damage their competitors business viability, using price reductions in a sector which was vital for its competitor but of limited importance to itself
 BUT the Court found that AKZO held a dominant position

Question 88

company attacked its competitor by offering unreasonably low prices to damage their competitors business viability, using price reductions in a sector which was vital for its competitor but of limited importance to itself
BUT the Court found that AKZO held a dominant position

Answer 88

Article 102(a)‘directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions. 
this is predatory pricing

AKZO

Question 89

what is the is distinction between legitimate and illegitimate price competition?

Answer 89

o Prices below average variable costs where a dominant undertaking seeks to eliminate a competitor must be regarded as abusive
o What is important is establishment of a strategic plan to eliminate a competitor

Question 90

What is the distinction between legitimate and illegitimate price competition?

Prices below average variable costs where a dominant undertaking seeks to eliminate a competitor must be regarded as abusive

What is important is establishment of a strategic plan to eliminate a competitor

However how does this undermine the Courts previous findings?

Answer 90

this subjective element within the definition of predatory pricing undermines, to some extent, the Courts idea that the concept of abuse if an objective concept.

Question 91

What is the distinction between legitimate and illegitimate price competition?

Prices below average variable costs where a dominant undertaking seeks to eliminate a competitor must be regarded as abusive

What is important is establishment of a strategic plan to eliminate a competitor

o HOWEVER this subjective element within the definition of predatory pricing undermines, to some extent, the Courts idea that the concept of abuse if an objective concept.

How has the court responded

Answer 91

o General court tried to gloss over this by asserting that anti-compettive intent and anti-competitve effect may occasionally ‘be one and the same thing’

Question 92

What is article 102(a)?

Answer 92

‘directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions. This wide category includes excessive pricing and predatory pricing

Question 93

what is article 102(b)?

Answer 93

‘limiting production, markets or technical development to the prejudice of customers’
i.e refusal to supply

Question 94

what is article 102(C)

Answer 94

‘applying dissimilar conditions to equivalent transaction with other trading parties, thereby placing them at a competitive disadvantage
(discretionary pricing)

Question 95

which section of Art 102 best illustrates the special responsibilities of a dominant undertaking and why?

Answer 95

Art 102(b) refusal to supply 
‘limiting production, markets or technical development to the prejudice of customers’ 

as the general principle of freedom of contract would would normaly allow any contracting party to reject an offr for a contract BUT this freedom cannot be granted where the market structure is that there is no alternative supply

Question 96

Under Art 102(c) (discretionary pricing)
‘applying dissimilar conditions to equivalent transaction with other trading parties, thereby placing them at a competitive disadvantage

Price discrimination may take place directly or indirectly

give examples of both?

Answer 96

 direct discrimination might be found where an undertaking charges different prices depending on the nationality or location of its customers.
 Best known commercial techniques of indirect discrimination are discounts or rebates which have been subject to extensive European jurisprudence

Question 97

what case demonstrates indirect price discrimination under Art 102(c)

Answer 97

Hoffman La Roche
The court was asked to look at the commercial lure of a loyalty rebate offered by a dominant undertaking. Fidelity rebates are condition on the customers promise to buy exclusively from one undertaking. Commision said this had a discriminating effect as Roche offered two purchases two different prices for an indentical quantity of the same product depending on whether these two buyers agree not to go to Roches competitors

Question 98

The court was asked to look at the commercial lure of a loyalty rebate offered by a dominant undertaking. Fidelity rebates are condition on the customers promise to buy exclusively from one undertaking. Commision said this had a discriminating effect as Roche offered two purchases two different prices for an indentical quantity of the same product depending on whether these two buyers agree not to go to Roches competitors
case and area

Answer 98

Hoffman La Roche, Article 102(c) discretionary pricing

indirect

Question 99

what is a fidelity rebate under Art 102(c)

Answer 99

is designed through the grant of a financial advantage to prevent customers from obtaining their supplies from competing producers

Question 100

which article defines tying or bundling?

Answer 100

Art 102(d)

Question 101

what is bundling under Art 102(d) ?

Answer 101

‘making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts

connecting the sale of one product to another

Question 102

which two cases are under Article 102(d) as an example of bundling?

Answer 102

Tetra II and Microsoft Case

Question 103

Two cases comes under Article 102(d) as an example of bundling

Tetra II and Microsoft case;

explain the first

Answer 103

Involved a dominant manufacturer of cartons and carton filling machines. They tied the sale of both together. These were considered products that could be sold separately. As their tying was not in line with commercial usage, the dominant undertaking had abused its market power

Question 104

Involved a dominant manufacturer of cartons and carton filling machines. They tied the sale of both together. These were considered products that could be sold separately. As their tying was not in line with commercial usage, the dominant undertaking had abused its market power

which case and area?

Answer 104

Tetra II Article 102(d) as an example of bundling

Question 105

Two cases comes under Article 102(d) as an example of bundling

Tetra II and Microsoft case;

explain the second

Answer 105

Consumers are unable to acquire the Windows client PC operating system without acquiring Window Media Player. Was Microsoft able to bundle its flagship internet Exploror with its windows operating system. Theh condition that the conclusion of contracts is made subject to acceptance of supplementary obligations must be considered to be satisfied.

Court found that because of this, the condition that the conclusion of contracts is made subject ot acceptance of supplementary objligations must be considered to be satsifed

Question 106

Who criticised the Microsoft case?

Answer 106

: Economist Milton Friedmen

Question 107

why did : Economist Milton Friedmen critique the Microsoft case?

Answer 107

Economist Milton Friedmen believed this set a dangerous precedent for increasing government regulation of what was an industry formerly very free of government intrustion

Question 108

Economist Milton Friedmen critiqued the Microsoft case however how did Jenkins and Bing respond?

Answer 108

Bing argued that contrary to Friedmans concerns, the settlement acutlay had little effect on Microsofts behaviour, the fines, restrictions and monitoring imposed were not enough to prevent it from ‘abusing its monopolistic power and too little to prevent it from dominating the software and operating system

Question 109

what does the 2004 EU Merger Regulation require?

Answer 109

requires compulsory and exclusive prior notification to the European Commission of megers, acquisitions and certain joint ventures that involve a change of control and meet certain turnover thresholds

Question 110

requires compulsory and exclusive prior notification to the European Commission of megers, acquisitions and certain joint ventures that involve a change of control and meet certain turnover thresholds
which regulation?

Answer 110

2004 EU Merger Regulation

Question 111

Mergers may take place in two directions, what are they?

Answer 111

Horizontal Merger: between two previously competing undertakings
Vertical Merger: between two firms on different levels of the commercial chain
There is no provisions in the EU Treaties!

Question 112

what is a vertical merger?

Answer 112

between two firms on different levels of the commercial chain

Question 113

what is a horizontal merger?

Answer 113

between two previously competing undertakings

Question 114

o Article 102 contains no separate paragraph dealing with possible justifications for abuses of a dominant position.
what does this suggest?

Answer 114

Article 102 thus appears to be an absolute prohibition

Question 115

rticle 102 contains no separate paragraph dealing with possible justifications for abuses of a dominant position. This could suggest that Article 102 thus appears to be an absolute prohibition however o BUT the existence of unwrtitten grounds of justification is not uncommon and can be seen in other areas of EU law and so what does this mean the EC has done?

Answer 115

the European Courts do examine whether there exists an ‘objective justification’ of the apparently abusive behaviour of the market leader

Question 116

Under Article 102
European Courts do examine whether there exists an ‘objective justification’ of the apparently abusive behaviour of the market leader

two jurispurdential lines have been distinguished what are they?

Answer 116

1) the behaviour of the dominant firm is not considered abusive due to a special context.
2) efficiency defence

Question 117

Under Article 102
European Courts do examine whether there exists an ‘objective justification’ of the apparently abusive behaviour of the market leader

two jurispurdential lines have been distinguished
1) the behaviour of the dominant firm is not considered abusive due to a special context.

2) efficiency defence

what is an example of 1) special context

Answer 117

Benzine v Commission; e.g where a crisis within an industry leads to general supply shortages, the refusal to supply traditional customers has not been seen as abusive behaviour

But it must be beyond control of the dominant undertaking and cannot be overcome by other means

Question 118

Under Article 102
European Courts do examine whether there exists an ‘objective justification’ of the apparently abusive behaviour of the market leader

two jurispurdential lines have been distinguished
1) the behaviour of the dominant firm is not considered abusive due to a special context.

2) efficiency defence

what is an example of 2) efficiency defence

Answer 118

In british airways the EC used a relative concept of abuse that ‘the exclusionary effect which is disadvantageous for competition, may be counterbalanced or outweighed by advantages in terms of efficiency which also benefit the customer

most elaborate discussion of efficiency defense was in Microsoft.

i. Found that Microsoft had not shown that the integratin of Windows Media Player creates technical efficiencies or leads to superior technical product performance
ii. This second objective justification has remained very vague

Question 119

which two cases are examined under the efficiency defence for justifications under Art 102

Answer 119

british airways

Microsoft

Question 120

the EC used a relative concept of abuse that ‘the exclusionary effect which is disadvantageous for competition, may be counterbalanced or outweighed by advantages in terms of efficiency which also benefit the customer
case and area

Answer 120

efficiency defence

british airways

Question 121

in what case did the Court use an expensive use of Art 102?

Answer 121

Continental Can Case

Question 122

o Expansive Use of Article 102 in Continental Can Case (1972)
explain case

Answer 122

A merger, otherwise blameless and directly affecting only the structure of an industry as opposed to directly harming consumers or competitors, may nonetheless be considered an ‘abuse’; though in this case the Court refused to condemn the specific merger before it

Question 123

in what case did the Court use an expansive use of Art 101?

Answer 123

British American tabacco

Question 124

o Expansive Use of Article 101 in British American Tabacco Case 87
explain case

Answer 124

 Although the acquisition by one company of an equity interest in a competitor does not in itself constitute conduct restricting competition, such an acquisition may nevertheless serve as an instrument for influencing the commercial conduct of the companies in question so as to restrict or distort competition on the market on which they carry on business.
 Each agreement must be assessed in its economic context and in light of the situation on the relevant market
 Commission must exercise particular vigilance in the case of a stagnant and oligopolistic market, such as cigarettes

Question 125

 Where companies concerned are multinational corporations worldwide, their relationships outside the Community cannot be ignored, and it is necessary in particular to consider the possibility that the agreement in question may be part of a policy of global cooperation
which case was this decided in?

Answer 125

British American Tobacco

Question 126

what are the three forms of concentrations?

Answer 126

merger
acquisition
joint venture

Question 127

when does a concentration have a Union dimension?

Answer 127

where

a) The combined worldwide turnover of all the undertakings concerned is more than 5000 million and
b) The Union wide turnover of each of at least two of the undertakings concerned is more than 250 million, unless each of the undertakings concerned achieves more than 2/3rds of its Union wide turnover within one and the same MS

Question 128

what did the 1989 EUMR state?

Answer 128

A concentration which creates or strengthens a dominate position as a result of which effective competition would be significantly impeded in the internal market or in a substantial part of it, shall be declared incompatible with the internal market

Question 129

A concentration which creates or strengthens a dominate position as a result of which effective competition would be significantly impeded in the internal market or in a substantial part of it, shall be declared incompatible with the internal market
what stated this?

Answer 129

1989 EU MR

Question 130

what did the 2004 EUMR say?

Answer 130

A concentration which would significantly impede effective competition, in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, shall be declared incompatible with the common market

Question 131

A concentration which would significantly impede effective competition, in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, shall be declared incompatible with the common market
what stated this

Answer 131

2004 EUMR

Question 132

what are the 3 merger defences?

Answer 132

efficiency defence
failing firm defence
national public policy justifications

Question 133

What counts as national public policy justifications under merger defences?

Answer 133

Public security, plurality of the media and prudential rules shall be regarded as legitimate interests