LECTURE 2 - competition law

Question 1

Competition law (definition)

Answer 1

Competition law is a set of norms which prevent monopolies and maintain fair competition at the market

Question 2

Monopoly (definition)

Answer 2

A position in which one company produces for an entire market or industry

Question 3

Why is a monopoly bad?

Answer 3

no competition -> limits innovation, monopolist can charge any price it wants or stop production, the quality will be less important and the customer pays for it all

Question 4

What does competition law? (5)

Answer 4

• Prohibits companies to enter into agreements limiting the competition
• Prevents very big companies from abusing their dominant position
• Prevents governments from distorting the competition
• Prevents monopolies from occurring through merger control
• Recognizes the necessity of some monopolies

Question 5

Sources of the EU competition law (4)

Answer 5

• TFEU 101 -109 + Protocol no. 27 on the internal market and competition
• The Merger Regulation (Council Regulation (EC) No. 139/2004)
• European Commission delegated acts and soft law
• ECJ case law

Question 6

Enforcement of EU competition law is done in two ways:

Answer 6

• Ex ante approval of mergers and state aid (reviewing before transaction)
• Ex post investigations (under 101, 102 and 107)

Question 7

Article 101 TFEU prohibits: (5)

Answer 7

• Undertakings and associations of undertakings to
• Enter in the agreements or engage in concerted practices or make decisions
• Which may affect trade between member states
• Which have as their object or effect the prevention, restriction or distortion of competition within the internal market
• Unless such agreements contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share fo the resulting benefit

Question 8

Undertakings (definition)

Answer 8

Undertakings are entities engaged in economic activity

Question 9

Pro-competitive effects (3)

Answer 9

• Block exemptions (pro-competitive effects are generally considered to overweigh anti-competitive effects)
• Individual exemptions (pro-competitive effects of the individual agreement overweigh the anti-competitive effects)
• De minimis (anti-competitive effects are insignificant)

Question 10

Article 102 TFEU prohibits (3)

Answer 10

• Undertakings to
• Abuse
• Their dominant position

Question 11

The element of dominance includes two sub-elements:

Answer 11

• Product and geographical market

- Share

Question 12

SSNIP test

Answer 12

Small but Significant and Non-transitory Increase in Price

Question 13

Abuse (4)

Answer 13

• Unfair prices or conditions
• Limitation of production supplies or technical development
• Discrimination (different prices in similar contracts)
• Tying (imposition of unnecessary service)