EU Law Flashcards
Provide a brief overview of the EU and UK competition law & relevant institutions. Be able to explain the relationship between EU competition law and the competition laws of member states, in particular in the light of Article 3 of Regulation 1/2003.
2.1 Introduction
Provide a brief overview of the EU and UK competition law & relevant institutions.
Be able to explain the relationship between EU competition law and the competition laws of member states, in particular in the light of Article 3 of Regulation 1/2003.
2 EU Law
EU Treaties
Institutions
2.1 EU Treaties
The EU is established by two Treaties: the treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (‘TFEU’
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28 member states.
Under the treaties the member states confer competences on the EU so that it can fulfil its objectives, one of which is a highly competitive social market economy:
- Article 3 (3) TEU;
- Article 119(1) TFEU).
Much of EU law is concerned with elimination of obstacles to free movement (goods, services, persons, and capital). Creation of the Euro, EU wide public procurement regime, Europe 2020 strategy; all contribute to greater competition and cohesion economically. In addition to the macro effect on competition, the TFEU contains specific competition rules that apply to undertakings and to member states themselves.
2.1.1. Competition chapter in TFEU
EU competition law is contained in Chapter 1 of Title VII of Part 3 of the TFEU consisting of: Article 101(1): prohibits agreements, decision by associations of undertaking and concerted practices that have as their object or effect the restriction of competition, unless the conditions of Article 101(3) are satisfied. Article 102: prohibits the abuse by an undertaking or undertakings of a dominant position. Article 106(1): imposes obligations on member states in relation to the Treaty generally and the competition rules specifically, while Article 106(2) concerns the application of the competition rules to public undertakings and private undertakings to which a member state entrusts particular responsibilities. Articles 107 to 109: Prohibit state aid to undertakings by Member states that might distort competition in the internal market. ALSO: EU Merger Regulation (the EUMR) which applies to concentrations between undertakings that have an EU dimension Note: It is necessary to read the comp. rules in conjunction with the objectives and principles laid down in the TFEU and the TEU. Article 3(3) TEU states that the EU is to establish an internal market, which, in accordance with Protocol 27 on the internal market and competition annexed to the Treaties, is to include a system ensuring that competition is not distorted. The protocol has the same force as a Treaty Provision. The Lisbon treaty repealed Article 3(1)(g) of the EC Treaty that established as one of the activities of the European Community the achievement of a system of undistorted competition. In Konkurrensverket v TeliaSonera Sverige, the CoJ referred to Article 3(3) TEU and Protocol 27 as though there was no difference from Article 3(1)(g) EC. In Timab v Commission the General Court held that Article 3 TEU, read in conjunction with Protocol 27, has changed neither the purpose of Article 101 nor the rules for the imposition of fines. Article 3(1)(b) TFEU provides that the EU shall have exclusive competence in establishing the competition rules necessary for the functioning of the internal market. Article 119(1) TFEU provides that the activities of the Member States and the EU shall be conducted in accordance with the principle of an open market economy with free competition.
2.1.2 Single Market Imperative
it is important to stress that EU competition law is applied by the commission and the EU courts very much with the issue of single market integration in mind. The single market has been described by the commission as one of the EU’s biggest assets. It is determined to protect it. Agreements and conduct that might have the effect of dividing the territory of one member state from another will be closely scrutinised and may be severely punished. The existence of ‘single market’ competition rules as well as conventional’ competition rules is a unique feature of EU competition law. There have been a number of significant accessions to the Union in recent years which together with the possibility of future accessions, for instance from Balkan states, means that single market integration will remain a key feature of EU Competition law and policy. The Commission acts as guardian of the single market and is determined to prevent any retreat into economic nationalism. The court of Justice reaffirmed the importance of the single market imperative in its judgements in GlaxoSmithKline v Competition and Football Association Premier League.
2.1.3 Economic and Monetary Union
The creation of the Euro has an important influence on EU competition. Since the competitive process depends, amongst other things, on consumers having adequate information to enable them to make ration choices, price comparisons are difficult when the dame goods and services are sold in different, variable currencies; the problem is compounded with the cost of exchanging money. The Euro brings a transparency to price information that Funamentally transforms the position, and has a considerable impact on the way in which business is conducted. The aim of the ‘Single Euro Payments Area’ is to harmonise the payments market across the EEA by using common procedures and standards for payments in Euro.
2.1.4. Modernisation of EU Competition Law
In the first half of the 1990’s, EU recognised something was wrong with competition rules. Article 101 on restrictive agreements and Article 102 on the abuse of dominance were enforced with insufficient attention to economic principles. Then followed reforms of the regime on vertical restraints, horizontal cooperation agreements, and technology transfer agreements, as well as significant changes into the substantive test and procedures for mergers having an EU dimension. Another policy initiative was the adoption of the Commissions enforcement priorities in relation to the exclusionary conduct of dominant firms. Overarching everything was regulation 1/2003, which abolished the Commission’s monopoly over decision-making under article 101(3), requiring firms to make their own assessment of the compatibility of their conduct with EU law. Today it’s widely accepted that EU comp. law involves economic analysis of business practices and transactions within a legal process; that form-based rules are likely to be harmful rather than helpful; that intervention is justified only when there is evidence supporting a theory of harm that a practice restricts or distorts the competitive process, thereby having an adverse effect on consumer welfare, as well as taking into account if the particular conduct likely to harm competition is connected to the degree of market power the undertaking(s) have on the market(s).
2.2. Institutions
Council of the EU. European Commission. General Court. Court of Justice of the EU. Advisory Committee on Restrictive Practices and Dominant Positions. Advisory Committee on Concentrations. National Competition Authorities. National Courts. European Parliament.
2.2.1. Council of the EU
It is the supreme legislative body of the EU (Council of Ministers). Not involved in comp policy on regular basis. Council acts under powers conferred by Articles 103 & 352 TFEU, and has adopted several major pieces of legislation, including the EUMR & w/ EU parliament the EU Damages Directive. It grants powers to EC through regulations to enforce comp rules in TFEU, in particular Reg 1/2003.
2.2.2. EC
EC is the core of EU comp policy.
Responsible for fact-finding, taking action against infringements of Articles 101 & 102, imposing penalties, adopting block exemption regulations, conducting sectoral inquiries, investigating mergers and state aids, and for developing policy and legislative initiatives.
The EC is also involved in international comp. policy, including cooperation with other comp. authorities.
One commissioner is responsible for comp. matters, & certain decisions can be taken by the Commissioner for Competition rather than by the College of Commissioners.
There are two hearing officers, directly responsible to the Commissioner, responsible for safeguarding the exercise of procedural rights during Commission proceedings enforcing EU comp. law.
DG COMP - Directorate of the Commission, specifically responsible for competition policy.
The ECN – European Competition Network – consists of the EC and the national competition authorities of Member States (NCA’s) who are jointly responsible for enforcing Articles 101 & 102.
2.2.3. General Court
Hears appeals against EC decisions under Articles 101 & 102, State Aid provisions and under the EUMR
Reviews legality of decisions according to TFEU
CoJ grants GC powers to review treaties, both the law & facts, thus enabling it to assess evidence, annul decisions, and alter amounts of fines.
2.2.4 Court of Justice
Hears appeals from the GC on points of law only.
Has been strict about what is meant by an appeal on a point of law, and does not get drawn into factual disputes.
Deals with points of EU Law referred to it by national courts or tribunals under article 267 TFEU.
Assisted by Advocate General, drawn from a panel of 11 who delivers opinion on each case that comes before it.
2.2.5. Advisory Committee on Restrictive Practices and Dominant Positions
The body of officials from the NCA’s. They attend oral hearings, consider draft decisions of the Commission, comment on them & discuss draft legislation & develop policy generally.
2.2.6. Advisory Committee on Concentrations
Officials from NCA’s who attend oral hearings and must be consulted on draft decisions of the EC under the EUMR.
2.2.7. National Competition Authorities
NCA’s are obliged by Article 3(1) of Regulation 1/2003 to apply Articles 101 & 102 TFEU when agreements of conduct aggects trade between Member States.
NCA’s account for 85% of public enforcement of the EU comp rules.
NCA’s work with the EC within the ECN to allocate cases, exchange info, & develop practices.
