EU

Question 1

Difference between Articles 101 and 102 TFEU?

Answer 1

Article 101 prohibits any agreement or understanding between parties, which may affect competition between Member States (=collusion) 102: monopolies which is abuse of dominant position

Question 2

2 methods for defining relevant market RM

Answer 2

1. Relevant Product Market Products are interchangeable/substitutable and perform similar function (Notice on Definition of RM 1997)

Question 3

RMPM Interchangeability based on

Answer 3

1 Demand substitution SNIPP test. If 5-10% increase and consumers DO change then Interchangeabéle (+) Or if 1 ´(-) 2 Supply Substitution How easily can suppliers produce competing products

Question 4

2 products that were termed non-interchangeable

Answer 4

Bananas with other types of fruit (UNited brands) Nail guns Hitli

Question 5

Why are bananas not interchangeable w other kinds ofs of fruit? United Brands

Answer 5

CJEU held: Other types of fruit are not interchangeable with bananas. The price of other fruit had little impact on the demand for bananas. The banana has special characteristics which distinguish it from other fruit. The banana market is a distinct market separate from the market for other fresh fruit. “The banana has certain characteristics, appearance, taste, softness, seedlessness, easy handling, a constant level of production which enable it to satisfy the constant needs of an important section of the population consisting of the very young, the old and the sick.”

Question 6

1997 Commission Notice on Demand Substitutability

Answer 6

“[A] relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of the products’ characteristics, their prices and their intended use.” (para. 7) “The assessment of demand substitution entails a determination of the range of products which are viewed as substitutes by the consumer.” (para. 15)

Question 7

Tyres for lorries buses and similar versus those form cars and vans supply substitution?

Answer 7

322/81 MicheliN Held (-) There were significant differences in the production techniques of heavy vehicle tyres and car/van tyres and in the plant and tools needed for manufacturing them. Therefore, there was no elasticity of supply (supply interchangeability/substitutability) between heavy vehicle tyres and car/van tyres. Switching production from one type of tyre to the other involved time and considerable investment to modify the production plant.

Question 8

1997 Commission Notice on Relevant GM

Answer 8

the area in which the undertakings concerned are involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those areas.” (para. 8) “in order to establish whether companies in different areas do indeed constitute a real alternative source of supply for consumers […] the question to answer is again whether the customers of the parties would switch their orders to companies located elsewhere in the short term and at a negligible cost.” (para. 29)

Question 9

What is an Undertaking?

Answer 9

Not defined in TFEU Use Polypropelyne case <> OR (similar) <> Höfner & Elser 1991

Question 10

Does an undertaking have to be profot making?

Answer 10

No Van Landewyck v Commission [1980] ECR 3135, FEDETAB, an association that represented cigarette manufacturers in Belgium and Luxembourg, was held to be an undertaking.

Question 11

Are agreements between parent and subsidiary covered by Article 101 TFEU?

Answer 11

No Racal Group Services Ltd 1990 4 CMLR, 627 AND Viho Europe BV v Commission [1997] 4 CMLR 419 Parker Pen were 100% owners of subsidiaries ==101 did not apply

Question 12

In Akzo Nobel and others v Commission [2009] 5 CMLR 23

Answer 12

Rebuttable pesumption that parent company exercised decisive influence

Question 13

Definition of Agreement in 1001

Answer 13

1. Oral 2. Legally binding 3 Gentlement Agreements “The Quinine Cartel case” Applied by Bayer “it is sufficient that the undertakings should have expressed their joint intention to conduct themselves on the market in a specific way”.”

Question 14

Rules of an association are treated as

Answer 14

A decision

Question 15

Is bar of Netherands an undertaking?

Answer 15

Yes A regulation by this association on multi-disciplinary partnerships was held to be a decision by an association of undertakings since it related to the economic activity of the barristers.

Question 16

Would oligopolistic behaviour fall under 1011?

Answer 16

No But hard to show

Question 17

If object of agreement anti-competitive(-) Then

Answer 17

STM v Maschinenbau Ulm 1966 101(-) ==z its effect must be analysed.

Question 18

If arrangement between manufacturers of one country OR only operates in one country -> Article 101?

Answer 18

(+)

Belaste v commission 1989 Anti-competitive conduct confined to the territory of a single Member State is capable of having repercussions on patterns of trade and competition in the [Union] Market.

ALSO

Sealink

part of one MS (port of Holyhead) => substantial part of internal market =-> 102+ 101+

Michelin

Question 19

De Minimis

Answer 19

The market share thresholds are as follows: • an aggregate market share of 10% for agreements between actual or potential competitors (point 8(a)); and • 15% market share held by each of the parties for agreements between non- competitors (point 8 (b)).

Question 20

What Notice covers the 2014 De Minimis defence?

Answer 20

2014 De Minimis Notice

Question 21

Similar agreements have a cumulative effect. Which case?

Answer 21

Brasserie de Haecht SA v Wilkin [1967] ECR 407)

Question 22

Where does the de Minimis exception not apply?

Answer 22

agreements which have as their object the prevention, restriction or distortion of competition within the internal market

Question 23

By Object and Hardcore restrictions not covered by De Minimis restriction

Answer 23

• the fixing or prices when selling products to third parties”; - “the limitation of output or sales” or - “the allocation of markets or customers”.

Question 24

What is a concerted practice?

Answer 24

Different undertakings no agreement in place but appear not to compete with each other Pricing goods at same level

Question 25

Can the State be an undertaking?

Answer 25

State-owned corps can be if operating commercially but not necessarily when operating under public law powers (Compass Datenbark v Austria 2012)

Question 26

If companies have close link => corporate group is seen as one undertaking. Does Article 101 apply?

Answer 26

(-) Racal Group Services Ltd 1990

Question 27

Parker Pen Ltd had prohibited its distributors from supplying customers outside their respective national territories. The distributors were also Parker Pen’s subsidiaries. Viho challenged the restriction. Did 101 apply?

Answer 27

(-) single undertaking because subsidiary did not have real autonomy but merely carried out the instructions of its parent. Parker Pen also owned 100% of the shares in the subsidiary companies Viho Europe v Commission 1996. Parker Pen case. But if 101 (-) ===> 102 (+)

Question 28

What is the ratio of Akzo Nobel and others v Commission [2009]

Answer 28

That with 100% owned subsidiaries rebuttable presumption that 101 (-)

Question 29

How is Collusion defined?

Answer 29

101(1) 1 Agreements between undertakings (usu +) 2 Decisions by associations of undertakings 3 concerted practices vertical or horizontal

Question 30

Agreements between undertakings

Answer 30

written, oral also Gentleman’s agreements Quinine Cartel 1970 The firms involved made a secret gentleman’s agreement which fixed prices and divided up the EU geographically and stuck to agreement ==> AggMT +

Question 31

Decisions by associations of undertakings

Answer 31

1. Define them Trade associations, agricultural co-operatives and non-profit-making associations 2 If + then even non-binding rules of an association are decisions CASE IAZ International Belgium NV v Commission [1983] ECR 3369 non-binding => Article 101(1) +

Question 32

Dutch bar association case. Decisions by associations of undertakings=> 101 + ?

Answer 32

YES Wouters A professional organisation which enjoys regulatory powers, the Bar of the Netherlands, constitutes an association of undertakings and is thus within the scope of Article 101. A regulation by this association on multi-disciplinary partnerships held as decision by an association of undertakings since it related to the economic activity of the barristers

Question 33

Concerted practices

Answer 33

No agreement BUT Firms coordinate their behaviour and co-operate with each other instead of competing with one another. Exception Oligopoly. natural phenonomen | relatively few sellers | high barriers to entry | little product differentiation | price transparency | No firm could unilaterally increase price because its customers would switch trade to a competitor. If decreased prices => downward spiral. In an oligopolistic market all players follow the leader.

Question 34

Case law used to determine whether a situation is an oligopoly or not?

Answer 34

“Dyestuffs” 1972 Commission alleged concerted practices among undertakings in the dyestuffs industry (10 in EU) HELD • The price increases were evidence of a concerted practice • The producers were sufficiently powerful and numerous to behave independently • Prior announcements rendered the market “transparent” • It was “improbable that a spontaneous and equal price increase would occur on all the national markets.” Only “common intention” explained the “general and uniform price increases”. Principles CJEU defined concerted practices <><> IF parallel practice leads to conditions of competition which do not correspond to the normal conditions of the market, having regard to the nature of the products, the size and number of the undertakings and the volume of the said market==> concerted practice + Basically look at facts

Question 35

Sugar Cartel 1976 case

Answer 35

Sugar Cartel case 1976 If independent => concerted practice + ELSE => oligopoly + “[E]ach economic operator must determine *independently* the policy which he intends to adopt on the common market […]. [T]his requirement of independence does not deprive economic operators of their right to adapt themselves intelligently to the existing and anticipated conduct of their competitors, [but] it does however *strictly preclude any direct or indirect contact […] with the purpose either to influence the conduct on the market of an actual or potential competitor or to disclose to such a competitor the course of conduct which the undertakings themselves have decided to adopt or contemplate adopting on the market*”.

Question 36

Woodpulp 1993 4 CMLR 407

Answer 36

Analysis some economic analysis needd Facts: Approximately 50 undertakings were selling pulp (used to make paper) in the EU. Each producer had about 50 customers. The contracts tended to be for long-term supplies (5 years). The practice of quarterly price announcements by producers was well established. The Commission alleged that the system of price announcements could itself constitute a breach of Article 101(1). The CJEU held that the market was a series of oligopolies and was not influenced by concerted practices; the undertakings operated in a transparent market which it was difficult for the accused producers to control. The Court held that *price announcements were made to consumers* rather than to other producers, and were a rational response to a long- term market which would not “lessen each undertaking’s uncertainty as to the future attitude of its competitors”. Producers were held to “adapt themselves intelligently to the existing and anticipated conduct of their competitors”.

Question 37

Object or effect in Article 101(1)?

Answer 37

• The aim is to restrict competition || • The result is to restrict competition

Question 38

Consten and Grundig and object or effect

Answer 38

Sets out Either Or nature of object or effect

Facts

Manufacturer appointed distributor to sell goods +> Vertical Terms were • Consten had to take a minimum order • Consten would not sell products of competing manufacturers • Consten undertook not to sell the products directly or indirectly outside France • Grundig assigned its trademark to Consten, which it could use against unauthorised sales in France • Grundig distributors in other countries could not sell Grundig products in France ==> Territorial carving up => Competition Law violation CJEU held • WE want competition between distributors of the same product (i.e. intra- brand competition). • […] separate national markets is bad • Absolute territorial protection is not permissible.

Question 39

STM v Maschinenbau Ulm GmbH 1966

Answer 39

Exclusive supply contract | STM given exclusie right to sell mechanical equipment in FR.

DId not insulate FR territory as STM could SELL goods outside FR

parallel imports could be obtained from other MS.

ECJ held

• In this case, the object of the agreement was not to restrict competition, particularly as the agreement “seems really necessary for the penetration of a new area by an undertaking”.
• and image…

Question 40

CJEU quote <<it may be doubted whether there is interference in competition if the said agreement seems really necessary for penetration of a new area by an undertaking></it>

Answer 40

from STM v Maschinenbau 1966

Question 41

Grundig case 1969 (Object or effect Article 101)

Answer 41

Question 42

vertical agreement and breaches Article 101

Answer 42

1. Exclusive DistributorshipThis is arrangement whereby a supplier/manufacturer agrees to sell the products to only one distributor in a certain territory. This means that the supplier/manufacturer agrees not to appoint other distributors in the territory or sell the products directly to retailers/end- users within the territory +> STM [1966] (-)

2.Exclusive Purchasing Agreements

These are agreements where one party agrees to buy all of its requirements from a particular supplier (such agreements are common in the petrol and beer markets)+> need market analysis (HENCE Not likely in exam)

3.Selective distributoin Agreements

The CJEU has held that such agreements do not necessarily fall within Article 101(1), particularly where they are based on “qualitative” criteria such as the technical qualifications of the reseller and the suitability of their trading premises (SABA 1976/Metro 1978)

3 b if quantitiative (e.g. requiring a wide range or complete range of products to be stocked, achieving a minimum turnover in the products, holding minimum stock levels) ==> more likely to be caught by Article 101(1)

Question 43

Definition of “May affect trade between Member States

Answer 43

from STM Macschinenbau

sufficient degree of probability that “the agreement in question may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States, such as might prejudice the aim of a single market.”

Exceptions (De Minimis Notice) OJ [2014] C 291/1

between small and medium-sized undertakings == regional ==> not normally capable of affecting trade between MS

Question 44

2117 a Belgian trade association of makers of roofing had a regime of common prices and sales conditions and agreed quotas. The regime operated only in Belgium between Belgian manufacturers. Nevertheless, infringement of Article 101(1):?

Answer 44

infringement of Article 101(1) (+)

Belasco v Commission [1989] ECR 2117

WHY?

<<): “Anti-competitive conduct confined to the territory of a single Member State is capable of having repercussions on patterns of trade and competition in the [Union] Market.”>>

Question 45

VCH Cement dealers

cement dealers’ association in the Netherlands set target prices for its members. The prices only applied to Dutch dealers and did not apply to imports or exports.

Answer 45

(VCH) v Commission [1972]

The CJEU held that an agreement: “extending over the whole of the territory of a Member State by its very nature has the effect of reinforcing the compartmentalization of markets on a national basis, thereby holding up the economic interpenetration which the Treaty is designed to bring about and protecting domestic production.”

!!

Question 46

Effect of Notice, (2004) OJ C101/81,

Answer 46

for both a qualitative and quantitative assessment guidelines

Question 47

Where are SMEs defined?

Answer 47

SME? Commission Recommendation 2003/361/EC

SME undertakings as those which have fewer than 250 employees and have either an annual turnover <= EUR 50 million OR

an annual balance sheet total <= EUR 43 million.

Question 48

• Market share thresholds 2014 De Minimis Notice

Answer 48

HORIZONTAL (Potential)

an aggregate market share of 10% for agreements between actual or potential competitors (point 8(a)); and

VERTICAL

• 15% market share held by each of the parties for agreements between non- competitors (point 8 (b)).

UNSURE WHICH

10% threshold will apply

Question 49

Consequences of breach of Article 101(1)

Answer 49

101(2) Agreement void

Question 50

Key elements of Article 102?

Answer 50

Undertaking

Dominant position

Within at least substantial part of it

Abuse

(Potential) effect on inter-state trade

Question 51

Limitations of scope of 102?

Answer 51

Article 102 TFEU regulates monopolies by prohibiting anti-competitive behaviour by them, but it does not prohibit them

Question 52

Undertaking 102

Answer 52

same as 101

Re Italian Flat Glass [1992] 5 CMLR 302.

At least 1

joint or collective dominance possible

: “There is nothing, in principle, to prevent two or more independent economic entities from being, on a specific market, united by economic links that, by virtue of that fact, together they hold a dominant position vis-à-vis the other operators on the same market.”

relevant?

Question 53

What are the possible exemptions to 102?

Answer 53

NONE

but Abuse can be interpreted flexibly (objective justification)

Question 54

Joint or Collective Dominance

Answer 54

CEWAL case

CEWAL shipping conference of companies, which operated a liner service between the Democratic Republic of Congo and North Sea ports. (A shipping conference has been defined as a combination of shipping lines formed to regulate and restrict competition in the carrying trade of a particular route). CEWAL had 90% of the market and only one competitor.

CJEU: “The existence of a collective dominant position may …flow from the nature and terms of an agreement, from the way in which it is implemented and consequently from the links or factors which give rise to a connection between undertakings which result from it.”

• “…a liner conference can be characterised as a collective entity which presents itself as such on the market vis-à-vis both users and competitors.”*
• abuse+*

Laurent Piau (Sports Law, cf Bosman)

provision of players agents but abuse (-)
stressed that legally independent economic entities may be collectively dominant where “they present themselves or act together on a particular market as a collective entity”.

In this case, it was held that FIFA, national football associations and the football clubs forming them were collectively dominant in respect of the provision of players’ agents’ services (but abusive behaviour could not be proved).

Question 55

DOminance and 102

Answer 55

Continental Can

Dominance only wrt a specific market.

STEPS

1. to identify/define the RELEVANT MARKET (see LGS 10)
2. To assess the undertaking’s position or power on that market.

Question 56

For legal test on Dominance Article 102, authority

Answer 56

Case 27/76 United Brands

<economic>effective competition on <strong>Relevant Market</strong> by giving it the power to behave <strong>independently </strong>of competitors, customers &amp;&amp; =&gt; Consumers &amp;&amp; [<strong>to an appreciable extent</strong>]</economic>

Market share

Barriers to expansion to entry if easy to enter==> monopoly may fluctuate

Question 57

Market Definition (101, 102) requires

Answer 57

COnsider:

1. RPM
2. RGM
3. (ancillary) Seasonal factors?

Question 58

United Brands barriers to entry exit

Answer 58

• Investment required for banana plantations; FINANCIAL
• The cost of developing a distribution system designed for perishable products; TECHNICAL
• The development of a retail network; VERTICAL INTEGRATION
• Advertising costs;
• Newcomers being unable to rely on the economies of scale.

Hoffman-La Roche

• Relationship of market share between the accused undertaking and its competitors;
• Technological lead;
• Existence of highly developed sales network;
• Absence of potential competition.

Question 59

102 TFEU

Answer 59