Law Ch 7: Competition Law Flashcards
What is competition law?
A set of norms which prevent monopolies and maintain fair competition at the market
What is a regulation?
legislation that applies within the European Union without the interference of national parliaments. They have a binding legal force throughout every member state.
What is a directive?
a legislation in which a certain goal or principle is adopted that should be implemented by the EU Member States the way that they see fit
What does competition law do?
- prohibits companies to enter into agreements limiting competition
- prevents very big companies from abusing their position
- prevents governments from distorting competition
- prevents monopolies from occurring through merger control
- recognizes the necessity of some monopolies
What is a decision?
legislation that only applies to an individual case e.g. fining a company for not keeping up with the rules of the European Union.
What does it mean when they say that “European law is supranational”
- It is directly applicable in the member states
- it is superior to domestic laws, when domestic law is not in compliance with European Law the domestic law may not be applied
What are the 4 freedoms under the EU?
- freedom of goods
- free movement of persons
- free movement of services
- free movement of capital
What is TFEU 101 about?
Prohibition of cartels
What is an undertaking?
an entity engaged in an economic activity, that is, an activity consisting of offering goods or services on a given market, regardless of its legal stats and the way in which it is financed. No intention to gain profits is required
What are examples of distortion of fair competition?
- fixing of purchase or selling prices,
- the limitation or control of production markets
- the sharing of markets or sources of supply
- applying dissimilar conditions to the same transactions with other trading parites
- forcing other parties to accept contractual terms with obligations that are not related to the contract (tying)
Which criteria are there for a cartel agreement to be allowed?
- it improves the production or distribution of goods or contributes to technical or economic progress
- it benefits the consumer
- the cartel is indispensable to realize the intended goals
- the cartel must not distort competition substantially
What is TFEU 102 about?
The abuse of dominant position
TRUE OR FALSE
When the percentage of market share is 50 percent or higher the undertaking holds a dominant position.
TRUE
How do you define the product market?
by considering whether or not a product has substitutes in practice
How does the Commission test if two products are on the same product market?
SSNIP Test
–> Small and significant but non-transitory increase in price-test, here the Commission calculates what the effects would be when the price of one product increases, and what the results are on the sales of another product.
