EU - Competition - Art 101 Flashcards
Metro v Commission
Objective of treaty include creation of single market.
Inter Brand Competition
Intra Brand Competition
equivalent goods competing
Distributors competing for sales of a brand or product
How is Market Power defined?
Defining Relevant Market
Calculating market Shares of the firm and other relevant firms
Considering whether there are any barriers to entry or expansion in the market.
Market definition made up of:
Market Share
Then barriers to entry or expansion
Relevant product market, Geographical market, and temporal factors.
Calculated by determining sales of relvant roduct in the geographical area. i
Commission Notice on Market Definition
Does not have force of law but recognised by eu courts as authorititative source for interpretation.
State as confirmed in Commission notice and united brands.
Relevant product market: Interchangeability
Product demand (Authority?) (2)
United brands - Other types of fruit not interchangeable with the banana because it has characteristics that differentiate it - softness etc.
Football World Cup - gave a narrow definition.
Product Market Definition
Product Supply
Considered
Michelin - no intercngeability between products mean the market was limited to seperate markets for Vans cars lorries etc.
Structure of Demand - Car users brough occassionally while commerial users brought frequently.
Structure of Supply - Lack of substitutability for manufacterers to switch production.
Market Share
Hugin
Cash Registers - market limited to Hugin’s products - very narrowly defined market. N.B. for 101/2 to be infringed it must have an effect on interstate trade which did not occur here.
_Geographical Market _
- Easily transported may mean the whole of the EU
- Special rules may exclude certain countries making it some of the EU.
- Can be one country
- Can be part of A member state
- Hiliti - Nails easily sold and transported across whole of eu.
- United Brands: French and British Legislation exculded these countries from European banana market.
- Michelin -market limited to certain vehicles in Belgium.
- Sea link - market was port of hollyhead.
Commission notice on Geographical merket:
conditions of competition must be sufficienty homogenous in one area whcih can be differentiated from another here conditions are appreciably different.
Will customers switch orders to companies elsewhere at a negligible cost?
Additional guidance from Commission
SSNIP Test
Authorities?
Small but significant non transitor increase in prices of the relevant product market and geographical market.
Football world cup tickets : world cup tickets were not substitutable as customers would not switch.
France Telecom v commission: High Speed internet market was seperate as customers would not switch to another provider.
Art 101 Prohibits (5)
A) directly or indirectly fixing purchase or selling prices or other trading conditions .
B) Limiting or controlling production markets, technical development or investment
C) sharing markets or sources of supply.
D) Applying dissimilar conditions to equivalent transactions.
E) making conclusin fcntracts subject to acceptance by parties of other obligations.
Undertaking
Polypropeleyne (def)
Hofner
Van Landewyck
Fenin
Undetaking is any entity engaged i commercial activity regardless of its legal status (Hofner and Polypropelyne)
VnL - no need for the entity to be profit driven.
A body procuring drugs for spanish health service was not an undertaking.
Undertakings
Need more than one
Viho Europe / Parker
Akzo
Woodpulp
Racal Group - must be more htn onecompanyfor the purposed of art 101(1)
Viho Europe/ Parker pens - owned its subsidiaries so action fell outsid of art 101 not subsidiaries etc.
Rebuttable presumption that parent is responsible for subsidiary’s activity / breaches.
Art 101(1) may apply to undertakings outside of EU as long as agreement operates inside the EU.
_Agreeements - Broad Definition. _
Quinine Cartel Case + Bayer AG
Iaz International v Commission
Wouters v Nederlandse
Gentleman’s agreemnt could constitute agreement, did not need to be written.
Non binding recomendation from trade association fell foul of art 101(1)
Bar asation of the netherlands was an undertaking a it regulated barristers.
Oligopoly or Concerted practice?
ICI v Commission (Dyestuffs)
Sugar Cartel
AC - Treuhand v Commission
Paralell behaviour maybe normal in an oligopoly, breach if concerted practice.
Found to be concted pracice because prior announcement of price changes rendered the market transparent and producers were large enough to act independantly.
Critical issue held to be whether the undertaking operated independantly
An undertaking that was not a contracting party could still breach art 101 if it was involved in the controlin behaiour. (such as consultancy)
Aim is to restrict competition
or
Effect is restriction of competition
If aim is to restrict competition, it is unnescessary to show whether has anti competitive effect. Therefore no need economic analysis.
If it is unclear that the agreement aims to restrict competition analysis wil be necessary.
Consten and Grundig
Consten and Grundig argued art 101 only applied to interbrand competition.
CJ held that it applied to intra-brand too. the agreemeent intended to divide european markets and therefore restrict competition, no need to consider the efect of the agreement. absolute territorial protection not permissable.
STM
In contrast to Consten, distributor had not been given a complete monopoly and therefore necessary to consider the effect of the agreement on trade.
Court stated that if the agrement was necessary to penetrate market it may be permitted. A de minimis effect will not infringe art 101.
T mobile Netherlands and others
Glaxosmithkline
In order for concerted practice to be regarded as having anti competitive object its sufficient that it has the potential to have a negative impact on competition.
An anti competitve agreement need not actually deprive consumers of effective competition in supply or pricing.
Rule of Reason in art 101
(3)
Eurotunnel - agreement between parties buidling tunnel was not anti competitve as it was necessary to project.
Rule of reason may apply where there is high commercial risk.
Generally RoR not accepted in competition law.
Types of vertical agreement
(4)
STM - Excusive distributorship
Brasserie de Haecht - Exclusive purchasing agreement
SABA: Selective distribution agreements - May restrict intrabrand competition and access to markets.
Quantitative Criteria - selective distribution system requires minimun turnover in products or stocking.
Affecting Trade Between Member States
STM
Belasco
Must be possible to forsee with a sufficient degree of probability that agreement may have an influence direct or indirect, actual or potential on trade between states.
Conduct confined to one state can affect interstate trade.
Art 101(2)
Automatic Nullity
2 Cases
Any agreement prohibited pursuant to the article shall be automatically void.
Beguelin Import co - agreement that is in breach will be automatically void and cannot be pleased against thrid parties.
STM - art 10(2) does not void all agreement - only provisions which are are subject to prohibition or not severable from the agreement.
