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EU > EU Competition Policy > Flashcards

EU Competition Policy Flashcards

1
Q

What treaty drove competition policy

A

Treaty of Rome, but overtime has been updated within the Treaty of Lisbon

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2
Q

Role of competition policy

A

Ensure competition in a common market is not distorted

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3
Q

What is compulsory for SEM functioning

A

Competition policy - as SEM allows less and larger firms, they have more power and so policy must ensure firms don’t misbehave

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4
Q

Q

A
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5
Q

Q

A
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6
Q

From a firm perspective, 2 possible responses to the SEM

A

Firms act competitively
Firms react defensively and inhibit success of the SE,

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7
Q

Key: firms within SEM may be more globally competitive but may act uncompetitively in the EU

A
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8
Q

Horizontal cooperation

A

Merging between companies of the same sector

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9
Q

Sotheby’s & Christies case relating to an anti-competitive agreement (horizontal cooperation)

A

Tried to collude horizontally (auction houses) ,

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10
Q

Leniency programme

A

Improves efficiency - giving evidence/whistleblowing removes liability , and so Christie’s snitched and Sotheby’s fined 6% turnover.

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11
Q

Nintendo - exclusive territories

A

Vertical cooperation - worked with suppliers to prevent product being sold in Germany, Prevented people buying product in Britain and to undercut and sell in Germany.

This was wrong to do as it interrupted free market and were fined.

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12
Q

Example of cartels

A

Premier League

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13
Q

Premier league case

A

Cartel - fixing price of the TV deals, 20 clubs acting as one.

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14
Q

Why was their cartel allowed to carry on?

A

Allows competitive balance. To ensure sustainability of the league and prevent excessive dominance.

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15
Q

Explicit prohibitions example

A

Price fixing
Output fixing
Market sharing agreements (e.g sugar cartel in 1970s)
Tied contracts

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16
Q

Are foreign firms covered if their EU trade is affected by anti-competitive behaviour

A

Yes

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17
Q

Relationship between risk of collusion and number of firms in a market

A

More firms, less collusion

Less firms, more collusion

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18
Q

Perfect clllusion

A

Firms coordinate prices and sales perfectly

19
Q

How do they achieve perfect collusion

A

Maximise profit from the charging monopoly price and quantity, and split sales among themselves

20
Q

Perfect collusion diagram

A

2n’ business remain as perfect, and charge the monopoly mark-up

21
Q

Partial collusion

A

Stops restructuring (the transition from short run to long run)

22
Q

Partial collusion diagram

A

Equilibrium point B, so prices are higher.

23
Q

Where is the welfare oss

A

Since higher prices

24
Q

3 main Exemptions exist

A

Negative clearance

Block exemptions

SME’s

25
Q

Negative clearance: when can exemptions for collusion exist (3)

A

If collusion improves production/distibtion of goods

Promotes technical or economic progress

If consumers benefit and no elimination of competition

26
Q

Q

A
27
Q

3 elements for monopoly abuse of power

A

Has to be dominant position

Abuse is illegal

Possibility of affecting intra-EU trade

28
Q

They are less effective than article 101. Why?

A

Defining the market is difficult

29
Q

Defining the market is difficult: Continental Can case

A

Hard to classify

30
Q

Abuse of dominance includes

A

Unfair pricing
Limiting markets
Tied contracts

31
Q

Coca Cola

A

Exclusivity agreements
Rebates for target & reserving shelf space
Use strong brands to sell weaker ones i.e Coca Cola made another drink called lilt , firms couldn’t just buy coke they had to sell lilt too.

32
Q

Google

A

Abuse of shopping - favours own google products e.g YouTube (part of google) , google play, google news etc.

Fined 2.4bn EUR

33
Q

Treaty of Rome didn’t address mergers

Merger regulation was added following Continental can case - however ineffective

A
34
Q

When is a merger prohibited

A

If strengthens dominant position which impairs competition

35
Q

3 thresholds for mergers

A

Big mergers impacting intra EU trade

Not national mergers e.g Sainsbury’s Asda

36
Q

Criticisms

A

Few are actually investigated

37
Q

Public enterprises

A
38
Q

Q

A

Q

39
Q

Q

A
40
Q

S

A
41
Q

September 2024 - apple have to pay Ireland and the interest (almost 2m a day)

A
42
Q

State aid effect on diagram

A

It stops movement from 2n’ to n’’, government aid prevents this process from occuring.

43
Q

What if only some countries subsidise

A

If a partner subsdiies its firms to break even, all restructuring forced on home country

44
Q

Competition policy in future

A

EU (16 decks)

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