Competition Law Flashcards
Section 1 of THE COMPETITION ACT
The purpose of this Act is to promote efficient resource allocation in society through workable competition for the benefit of undertakings and consumers.
ANTI-COMPETITIVE AGREEMENTS
Section 2
(2) The provisions of Chapter 2 and 3 of this Act shall not apply where an anti-competitive practice is a direct or necessary consequence of public regulation.
Section 3
This Act shall not apply to wage- and working conditions.
For the purposes of its work the Competition and
Consumer Authority may, however, request information from organisations and undertakings concerning wage- and working conditions.
!!There is no exemption to the abuse of a dominant
position!!
The competition act vs TFEU (Treaty on the Functioning of the European Union.)
When the effect of anti- competitive practices is confined to the national market, the Competition Act applies.
When it affects the internal market, EU law applies.
Article 101
Article 101 TFEU (Treaty on the Functioning of the European Union) captures above all cartels, i.e a group of independent market participants who collude with each other in order to improve their profits and dominate the market.
This usually happens through:
* Price fixing;
* Market share allocation
Section 6 of the completion act
(1) It is be prohibited for undertakings etc. to enter into agreements that have restriction of competition as their direct or indirect object or effect.
(2) Agreements covered by subsection 1 may, in particular, be agreements made to
i) fix purchase or selling prices or other trading conditions,
ii) limit or control production, sales, technical development or investments,
iii) share markets or sources of supply,
iv) apply dissimilar conditions to equivalent transactions with trading partners, thereby placing them at a competitive disadvantage,
v) make the conclusion of contracts subject to acceptance by the other contracting party of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts,
vi) coordinate the competitive practices of two or more undertakings through the establishment of a joint venture, or
vii) determine binding resale prices or in other ways seek to induce one or more trading partners not to deviate from recommended resale prices
Section 11 of the competition act
. (1) Any abuse by one or more undertakings etc. of a dominant position is prohibited. (2) …
(3) Abuse as set out in subsection (1) may, for example, consist of
i) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions, ii) limiting production, sales or technical development to the prejudice of consumers,
iii) applying dissimilar conditions to equivalent transactions with trading partners, thereby placing them at a competitive disadvantage, or
iv) making the conclusion of contracts subject to acceptance by the other contracting party of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Dominance
Any position of economic strength that enables an undertaking to act largely independent of its competitors, preventing effective competition on the market.
Abuse
Objective determination. Using dominance to change the structure on the market in a manner that prohibits effective competition.
THE MARKET
The market concept is paramount to both anti- competitive agreements and the abuse of dominant position.
depending on whether your market is defined broadly, or narrowly you may either escape competition law or make use of it to penetrate a certain market.
e.g. you may have a dominant position in high-end organic soap with lemongrass flavour in Copenhagen, but only a minor position with respect to cosmetics in all of Denmark.
Article 102
Article 102 TFEU precludes larger companies with significant market shares from exploiting their dominant position to impose conditions on the market that smaller competitors cannot sustain.
This usually happens through:
* Predatory pricing;
* Limiting production capacity;
* Dumping.; and
* Bundling.
Agreement or concerted practice
no formalities, both horizontal and vertical agreements are covered. The important point, has there been consensus amongst the participants of the meeting?
Restriction of competition
restricting competitors freedom to act
KEY TAKE-AWAYS of competition law
1) Competition policy is concerned with market efficiency for the benefit of both undertakings and consumers.
2) Competition law can both restrict your activity, but also protect you from other undertakings on the market.
3) Be aware of what is being discussed at meetings, no objection could be seen as a sign of agreement.
4) A dominant position is not itself prohibited but using that position to determine market conditions could amount to abuse.
