EU Competition Law

Question 0

Aims of comp law

Answer 0

Promote competitive market
Enhance eu’s performance in the global sphere
Contribute to the integration if the internal market (eliminating barriers)

Question 1

Objective of EU competition law

Answer 1

• constructed to ensure the maintenance of the common market
• help to achieve a single market of integration
• encourage economic activity amongst small and medium companies
• maximize efficiency by allowing the free flow of goods and resources

Question 2

Who does Art 101 apply to?

Answer 2

Aimed at private bodies / undertakings not dealing with government or public sector

Question 3

What is the purpose of Art 101?

Answer 3

Prevent any restrictive practices which may have an effect on competition in the EU - specific activities under (a) - (e)

Categories:
agreement of undertakings, decisions of undertakings associations and concerted practices that

Question 4

Art 101(1) : prohibition

Answer 4

• nature of agreements – agreements between undertakings; decisions by associations of undertakings; concerted practices
• affect trade – between member states
• object or effect – prevention; restriction; distortion of competition

Question 5

Art 101(2)

Answer 5

Any agreement or decisions prohibited pursuant to art 101 (1) shall be void

Question 6

Art 101(3) : exemptions

Answer 6

4 cumulative conditions - not alternative but need to have them all to take measure out of art 101:

1) the agreement must contribute to the improving the production or distribution of goods or contributes to technical or economical progress
2) consumers may receive fair share if resulting benefit
3) negative condition- restrictions which are not indispensable to the attainment of these objectives
4) the possibility if eliminating competition in respect of a substantial part of the products in question

Question 7

Art 102 TFEU

Answer 7

Involves one company abusing a strong position in the marketplace in which it was working

Applies where individual organizations have a near monopoly position or share an oligopolistic market with small number of other companies and taken unfair advantage of this position to the detriment of the market other companies and end consumers

Question 8

Abuse of dominant position elements:

Answer 8

• market
• dominance
• abuse
• affect competition between MS

Question 9

Hilti AG v Comission (1994)

Answer 9

Relevant product market is defined as in relation to characteristics are apt to satisfy need and are available to an extent to other products - market of nail guns - problem if Hilti was abusing dominant position in the market

Question 10

Dominance

Answer 10

Relates to a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independent of competitors, customers and consumers

Question 11

Tetra pack v Commission (1980)

Answer 11

Found that this company had dominant position in market in the design of carton packaging. There was a dominance in the market but justified by IP rights playing a role here.

Question 12

Abuse

Answer 12

Dominance not enough need of abuse of dominant position - tetra pack case

Question 13

Affect competition between MS

Case: British Leyland v Commission (1986)

Answer 13

Concerned excessive fees for certificate approval for left handed driver motor vehicle design without economic justification - court held : not necessary to establish specific effect on trade but evidence that potentially this type of certificate would affect trade between MS

Question 14

Role of commission and task under art 105 and regulation 1/2003

Answer 14

Ensuring that competition in the EU is not distorted by companies setting up their own rules and obstacles to trade which the EU is trying to abolish through free movement of goods provisions

Question 15

Commercial solvents v commission

Answer 15

-ECJ held that the prohibitions in 101 and 102 must be interpreted and applied in the light of art 3(d) which provides that the activities of the community shall include the institution of a system ensuring that competition is not distorted

Question 16

Primary court in competition law

Answer 16

General court

Question 17

Courage v Crehan

Answer 17

Stresses importance of competition law in political and constitutional order

Question 18

Application of exemptions

Answer 18

Individual exemption– application to the comission for a decision as to whether the agreement falls within art 101(3) – REMOVED BY REG 1/2003

Comfort letter – informal opinion from the commission that the agreement does not breach art 101 – ALSO REMOVED BY REG 1/2003

Block exemption blanket exemptions in certain industries passed by regulation- saves commission time by allowing a blanket exemption in industries where it is recognized that the majority of agreements should be exempted for example certain types of vertical agreements

Question 19

Secondary legislation

Answer 19

1/2003
Changed the existing system of individual notification and comfort letters (exemptions) – made article 101(3) directly effective and it allowed companies to resolve any problems in national courts of MS

• abolition of the practice of notifying business agreements to the commission
• empowerment of national competition authorities and courts
• European competition network

Question 20

ICI v commissions (dyestuffs)

Answer 20

Court of justice defined a concert practice as a form of coordination between enterprises that had not gone to the level of true contractual agreement but has cooperated for the risks of competition.

Question 21

Intro to comp law question

Answer 21

Generally mentioned in art 3(d)TFEU it refers to establishing competition rules necessary for the functioning of the internal market

Question 22

Sugar cartel case

Answer 22

Established the meaning of a concerted practice which was the action that allows competitors to fix a position in the knowledge of what others are going to do

Question 22

Consten case

Answer 22

Established that

• Art 101 could apply to vertical agreements
• in this case it was the agreement that harmed the single European market by an attempt to repartition along national boundaries

Question 23

Examples of what is prohibited under Art 101

Answer 23

• direct or indirect fixed purchase prince or selling prices
• limits or controls to production, markets, technical development or investment
• share markets or sources of supply
• putting trading partners at a disadvantage by applying dissimilar conditions to equivalent transactions with other partners
• make contracts subject to the acceptance of other parties supplementary obligations

Question 24

Exemptions from Art 101

Answer 24

If an agreement fulfills these 4 conditions then not to be declared void

1) agreement contributes to the improving production of distribution of goods
2) the agreement allows consumers a fair share of the benefit
3) agreement does not impose conditions that are not necessary
4) agreement does not allow undertakings to eliminate a substantial amount of competition

Question 25

Previous three ways of gaining an exemption

Answer 25

Individual exemption
Comfort letter
Block exemption

• regulation 1/2003 made art 101(3) directly effective and removed the comfort letter exemption and individual exemption

Question 26

Art 102 requirements

Answer 26

• an undertaking
• a dominant position
• abuse of that dominant position
• effect on trade between member states

If all of these are present then there is a breach of art 102

Question 27

United brands case (Chiquita Bananas)

Answer 27

Abused their dominant position in the market in regards to sales of bananas - charging different prices and sometimes refusing to sell;
Bananas were different enough from other fruit to not be cross substitutable therefore narrow market

Definition of dominant position – position of economic strength which allowed for:

• dominant undertaking to hinder effective competition
• undertaking to act independently of its competitors and consumers

Question 28

In order to establish market need to look at two things

Answer 28

Relevant product market: similarity of your product to other products and the ability to substitute your product for other similar products

Geographical market: need to consider how large a geographical area the company operates in - must be common market or substantial part of it