Seminar 3 - Anticompetitive agreements Part 1

Question 1

What is Article 101 TFEU?

Answer 1

A law that prohibits agreements, decisions, and concerted practices that prevent or distort competition within the EU.

Question 2

What are the consequences of violating Article 101 TFEU?

Answer 2

Agreements violating Article 101(1) are automatically void, and parties may face fines or be sued for damages.

Question 3

What does Article 101(3) TFEU provide?

Answer 3

Exemptions for agreements that improve production or distribution and provide benefits to consumers, as long as they don’t eliminate competition.

Question 4

What is the UK equivalent of Article 101 TFEU?

Answer 4

The UK Competition Act 1998, Chapter 1 Prohibition.

Question 5

What is meant by an ‘undertaking’ in competition law?

Answer 5

Any entity engaged in economic activity, irrespective of its legal form.

Question 6

What is a ‘concerted practice’?

Answer 6

Coordination between firms to reduce competition without a formal agreement.

Question 7

What is a cartel?

Answer 7

An agreement between competitors to fix prices, limit production, or divide markets.

Question 8

What is the single economic unit doctrine?

Answer 8

Parent and subsidiary companies are considered a single entity for the purposes of Article 101 TFEU, meaning agreements between them may not fall under competition law.

Question 9

What are the types of agreements prohibited by Article 101(1) TFEU?

Answer 9

Agreements that directly or indirectly fix prices, limit production, share markets, or apply dissimilar conditions to equivalent transactions.

Question 10

What is the burden of proof for showing a breach of Article 101 TFEU?

Answer 10

The burden of proof is on the European Commission or national competition authorities to show a breach of Article 101(1).

Question 11

What is a vertical agreement under Article 101 TFEU?

Answer 11

An agreement between companies at different levels of the supply chain (e.g., manufacturer and distributor).

Question 12

What is a horizontal agreement under Article 101 TFEU?

Answer 12

An agreement between companies at the same level of the supply chain, such as two manufacturers or two retailers.

Question 13

What is meant by ‘concerted practice’ under Article 101 TFEU?

Answer 13

A form of coordination between firms that knowingly substitutes practical cooperation for the risks of competition without reaching the stage of a formal agreement.

Question 14

What is meant by ‘passive participation’ in anticompetitive agreements?

Answer 14

A party can be deemed part of an anticompetitive agreement if they attend a meeting where the agreement is discussed, even if they don’t actively participate.

Question 15

What is a ‘hub and spoke’ arrangement in the context of concerted practices?

Answer 15

An arrangement where competitors share information through a non-competitor (the hub), which then passes information to other competitors (the spokes).

Question 16

What happens if a public entity performs economic activity under Article 101 TFEU?

Answer 16

A public entity can be considered an undertaking and subject to competition rules if it engages in economic activities, even while performing public functions.

Question 17

What is the significance of ‘decisions by associations of undertakings’ under Article 101 TFEU?

Answer 17

Decisions made by associations, such as trade bodies, can be caught under Article 101 if they affect competition, even if they are not formal agreements.

Question 18

What is required for an agreement to have an appreciable effect on competition under Article 101 TFEU?

Answer 18

The agreement must impact trade between EU member states and must be capable of appreciably affecting competition.

Question 19

What is a block exemption under Article 101(3) TFEU?

Answer 19

Certain types of agreements that would ordinarily breach Article 101(1) but are exempt under specific EU regulations because they provide benefits to the market

Question 20

What is an example of a restriction by object under Article 101 TFEU?

Answer 20

A cartel engaging in price fixing or market sharing is considered a restriction by object, meaning it is inherently harmful to competition.

Question 21

How does the leniency procedure work in uncovering cartels?

Answer 21

A member of a cartel can report the existence of the cartel to competition authorities and receive immunity or a reduction in fines under the leniency procedure.

Question 22

What are the penalties for breaching Article 101 TFEU?

Answer 22

Breaches of Article 101 can result in agreements being voided, fines being imposed by authorities, and private lawsuits for damages.

Question 23

What was the significance of Case 107/82 AEG-Telefunken v Commission?

Answer 23

It established that even tacit agreements, such as selective distribution policies enforcing resale price maintenance, can violate Article 101 TFEU.

Question 24

What are ‘restrictions by object’ under Article 101 TFEU?

Answer 24

These are agreements that by their very nature restrict competition, such as price-fixing, limiting output, or market sharing, without needing to show actual harm to competition.

Question 25

What is the significance of Case COMP/39437 – TV and Computer Monitor Tubes?

Answer 25

This case involved the European Commission imposing fines for price-fixing and market sharing in the production of cathode ray tubes, a violation of Article 101.

Question 26

What is the single economic unit doctrine in competition law?

Answer 26

This principle holds that a parent and its subsidiary can be considered a single economic entity if the subsidiary lacks economic independence, and thus, agreements between them fall outside Article 101.

Question 27

What is the importance of market share in assessing appreciable effects on trade under Article 101 TFEU?

Answer 27

Agreements between parties with a combined market share of less than 5% are generally not considered to have an appreciable effect on competition.

Question 28

What are the consequences for trade associations that recommend anticompetitive practices?

Answer 28

Even non-binding recommendations from trade associations can be considered anticompetitive if they influence member behavior, violating Article 101.

Question 29

What does ‘algorithmic pricing’ pose as a challenge to competition law?

Answer 29

Algorithmic pricing can potentially facilitate collusion, as companies may use algorithms to monitor and match competitors’ prices, raising concerns about tacit agreements.

Question 30

What is the relevance of Case C-49/92 P Commission v Anic in anticompetitive agreements?

Answer 30

This case highlighted that merely attending a meeting where anticompetitive agreements are discussed can make a firm liable unless they explicitly distance themselves from the agreement.