Restrictive practices (Art. 101 TFEU)

Question 1

Which ‘branches’ of competition law fall under “antitrust”?

Answer 1

• restrictive practices

- abuse of dominance

Question 2

Uniqueness in TFEU

Answer 2

EU imposes obligations directly on individuals + enforces them directly

Question 3

Structure of Art. 101 TFEU

Answer 3

1st paragraph: prohibition in principle

2nd paragraph: sanction

3rd paragraph: exception

Question 4

Field of application Art. 101 TFEU/1

Answer 4

if …

• parties: undertakings
• behaviour: agreements, decisions by associations, concerted practices
• object or effect: prevention, restriction or distortion of competition
• EU dimension: trade between Member States may be affected

… then …
- prohibited as incompatible with internal market

Question 5

Behaviour: types of collusion

Answer 5

– condition of plurality vs. unilateral behaviour
– loss of autonomy
– no formalism whatsoever
– ‘meeting of the minds’

Question 6

Behaviour: Agreement

Answer 6

– context/enforceability under national law irrelevant
– horizontal vs vertical: at the same level vs. at different levels in the production/distribution chain
– or ‘hybrid’, cf. ‘hub and spoke’ cartels in the retail sector
– cartel facilitators are also caught (Treuhand)

Question 7

Behaviour: decision by association of undertakings

Answer 7

– decisive = ability, in fact if not in law, to influence members’ conduct
– ‘decision’ can take the form of …
    • resolutions
    • ‘non-binding’ recommendations
    • deontological codes

Question 8

Behaviour: concerted practices

Answer 8

– ‘contact but no contract’
– no plan required, exchange of information may suffice
– not necessary to distinguish clearly from agreements

But:
– relationship parallel behaviour vs concerted practice is problematic
– parallel behaviour in itself is not sufficient proof of concerted practice
– concerted practice if also psychological element, idea of (moral) obligation
– burden of proof! (Woodpulp II)

Question 9

Object or effect

Answer 9

Prevention, restriction or distortion of competition within internal market

… object or effect -> also ineffective agreement/practice
… Maxima Latvija (2015) case: agreement reveals in itself a sufficient degree of harm to competition for it to be considered that it is not appropriate to assess its effects

Question 10

Restriction of competition

Answer 10

– economic rather than legal assessment
– necessary condition: autonomy of (one of the) parties to the agreement/practice is curtailed
– but not sufficient: for Art. 101 (1) to be applicable, competition must also be restricted ‘to an appreciable extent’ = de minimis

Question 11

De minimis quantitative thresholds

Answer 11

aggregate (market share) thresholds by all participating undertakings for EFFECT restrictions:
– 10% for agreements between competitors (horizontal)
– 15% for agreements between non-competitors (vertical)
– 10% for mixed horizontal/vertical agreements or if unclear

Question 12

Ancillary restraints

Answer 12

restriction which is directly related and necessary to the implementation of a main operation
-> non-competition clause in a contract for the sale of an undertaking

Question 13

Conditions for exceptions of restrictive practices

Answer 13

Art 101 (3) TFEU: Four conditions:

• production or distribution improvements, promotion of technical or economical progress
• passing a fair share of benefits to consumers
• not impose on the undertakings concerned restrictions which are not indispensable to attainment of objectives’
  4. ‘not afford undertakings the possibility of eliminating competition in respect of substantial part of the products’

Question 14

Variations of exceptions

Answer 14

• individual exceptions

- block exceptions

Question 15

Individual exceptions

Answer 15

directly applicable legal exception:
– old system: notification (return during Covid-19 crisis)
– new system: ‘do it yourself ’

Question 16

Block exceptions - general information

Answer 16

• for efficiency, legal certainty
• direct effect
• implemented through EC regulations
• limited period only, renewal possible
• economic approach: effect over form

Question 17

Block exceptions - Regulation

Answer 17

Regulation 330/2010

• vertical agreements
• market share thresholds
• hardcore restrictions

Question 18

Criticism/ controversy of exceptions

Answer 18

• individual sectors (e.g. cars, pharmaceuticals, …)
• evolving forms of collusion (e.g. hub and spoke)
• rule of reason in competition law or not?
• MFN agreements