Competition Law - Collusion

Question 1

What three factors need to be determined to find collusion?

Answer 1

1. Collusion by agreement, association or concerted practice
2. Affects inter-state trade
3. Object or effect prevents, restricts or distorts competition

Question 2

What is an agreement under Art 101?

Answer 2

Oral or written agreements (Tepea), or even informal ‘gentleman’s agreements’ (Hercules), which are not unilateral (Bayer).

Question 3

How may you identify a ‘concerted practice’?

Answer 3

Meetings between competitors and parallel behaviour.

Question 4

What argument did ICI attempt in the Dyestuffs case against the accusation of operating in a concerted practice?

Answer 4

They said parallel pricing was standard behaviour in an oligopoly and could not be illegal.

Question 5

In which case was parallel pricing not found to be anti-competitive but a natural element of the oligopoly?

Answer 5

Ahlstrom v Commission (Wood Pulp Cartel)

Question 6

To what extent must inter-state trade actually be affected to infringe Art 101(1) and which case tell us this?

Answer 6

Mere potential is sufficient (STM v Maschinenbau).

Question 7

Article 101 refers to ‘undertakings’. What are they? Which cases show its breadth of meaning?

Answer 7

Undertakings are any economic or commercial activity involving the provision of goods and services engaged by a natural or legal person. In Motosykletistiki and Distribution of Package Tours During 1990 World Cup non-profit bodies fell within the meaning due to advertising, sponsorship, and insurance contracts.

Question 8

What are the defences against Art101(1)?

Answer 8

1. de minimis
2. Art 101(3) - economically beneficial yet anti-competitive agreements
3. Block exemption

Question 9

To be considered anti-competitive there has to be a cross-border element. Does this preclude decisions made between legal persons within one MS? Which case gives us the answer to this question?

Answer 9

Small decisions within one member state may be sufficient if there is an external effect (Brasserie de Haecht).

Question 10

Which Regulation sets out how Articles 101 and 102 are to be enforced?

Answer 10

Regulation 1/2003 ‘The Modernization Regulation’

Question 11

What does Regulation 330/2010 do?

Answer 11

Sets out grant of block exemptions for vertical agreements that might otherwise infringe on Art 101 or Art 102.

Question 12

A multiplier system in terms of fines is operated in accordance with Art 23(2)(a) of R 1/2003. So who might get a 50% increased fine?

Answer 12

Repeat offenders
Instigating or leading cartel members
Companies continuing illegal acts during investigation
Companies not providing information or providing misleading information
Companies which have been cartel members for a long time

Question 13

When might you get immunity from a competition fine if you are operating in a cartel?

Answer 13

If you whistleblow

Question 14

Which two cases show us that technical infringements of Art 101 can be allowed where a company is bringing a new product into the market?

Answer 14

STM v Maschinenbau

Transocean Marine Paint Association

Question 15

Which case tells us that you can be guilty of collusion if you serviced the cartel even though you were not party to the agreement or operating in the market of the cartel?

Answer 15

Treuhand

Question 16

Which case tells us that the CJ won’t concern itself if there is anti-competitive behaviour and it cannot decide whether the agreement that took place is an agreement or concerted practice?

Answer 16

ANIC

Question 17

Which case tells us that non-binding recommendations may fall within the definition of decisions within Art 101(1)?

Answer 17

Vereniging van Cementhandelaren v Commission

Question 18

In which case was a trade association involved in supplying washing machines and dishwashers demanding that goods be distributed under a common label held to be contravening Art 101(1)?

Answer 18

ANSEAU/NAVEWA

Question 19

What agreement had Grundig and Consten bargained? Why was it held to be unlawful?

Answer 19

Grundig agreed to supply Consten their products exclusively in France, while Consten agreed to sell no competing products. Grundig also tried to prohibit its other distributors from exporting to confer territorial protection on Consten. This was held to affect inter-state trade

Question 20

How would you describe passive selling?

Answer 20

Where the buyer actively seeks out the seller

Question 21

Which case tells us that it does not have to be the ‘object’ but only ‘effect’ of an agreement to prevent, restrict or distort competition to fall within Art 101?

Answer 21

European Night Services v Commission

Question 22

Which case established the de minimis defence?

Answer 22

Volk v Vervaeke

Question 23

What established that to use the de minimis defence you may not have more than 10% market share in a horizontal agreement?

Answer 23

Notice on Minor Importance of Agreements (NAOMI)

Question 24

What is the upper % limit of market share for vertical agreements which a company etc may own for them to rely on the defence of de minimis?

Answer 24

15%

Question 25

In which case does the CJ deny that European law applies the Rule of Reason in weighing up pro and anti-competitive factors?

Answer 25

Metropole TV v Commission

Question 26

If a horizontal or vertical agreement was below the 10% or 15% limit may you still be liable?

Answer 26

Yes, if the agreement has an appreciable affect on the market.

Question 27

What did Regulation 330/2010 add on the defence of de minimis? It made four meaningful statements.

Answer 27

1. The defence is applicable to non-competitors in an agreement who have less than 15% market share;
2. For competitors this is reduced to 10%;
3. There is no presumption that an agreement bestowing more than 15% market share is anti-competitive;
4. A vertical agreement below 15% which contains hardcore restrictions and has an appreciable affect on the market may be caught by Art 101(1). The positive and negative affects of the hardcore restrictions would be balanced.

Question 28

What does Regulation 330/2010 say about the use of block exemptions? They made four statements.

Answer 28

1. Block exemptions are available as a defence for vertical agreements with 30% or less market share;
2. There is no presumption that +30% market share infringes Art 101(1) or fails Art 101(3);
3. Market share between 30-35% only grants a block exemption for two years;
4. Market share above 35% only grants a block exemption for one year.

Question 29

When does a defence using Art 101(3) succeed? There are four stages to the defence.

Answer 29

The agreement must:

1. Improve production, distribution, or technical or economic progress;
2. Must be beneficial to consumers (interpreted widely);
3. contain dispensable restrictions and be necessary and proportionate;
4. substantially eliminate competition in the relevant market.

Question 30

Who can grant block exemptions?

Answer 30

The Commission

Question 31

What type of non-compete clauses are prohibited by Art 5 R 330/2010?

Answer 31

Any lasting more than 5 years.

Question 32

In which situation may a non-compete obligation extend itself for one more year than agreed?

Answer 32

When protecting ‘know-how’ ie non-patented information

Question 33

Before Regulation 1/2003 was Regulation 17/62. What were the five problems with Regulation 17/62?

Answer 33

1. The Commission had a monopoly over the grant of individual exemptions;
2. The Commission was overloaded with exemption requests and unable to focus on Art 101 and Art 102 infringements;
3. Due to the lack of capacity, the Commission began issuing comfort letters, which portrayed no legal certainty;
4. There was disjuncture between national competition law and EU law;
5. Possible conflicts of interest with Commission in charge of development and enforcement.

Question 34

What ratio do we get from the case of Courage Ltd v Crehan?

Answer 34

One party of a contract can sue another in case of breach of Art 101 even if there is a national law precluding a claim.

Question 35

Which case confirmed Courage Ltd v Crehan?

Answer 35

Manfredi

Question 36

Why did the Chancery Division decide not to award Crehan damages?

Answer 36

The Chancery Division said that an agreement that conflicts with Art 101 is an illegal contract, and no damages can be sought from an illegal contract.