Article 101 HZ PDF

Preview

Summary

ADDRESSING A PROBLEM QUESTION ON TFEU 101 Answer 4 questions when addressing a 101 (1) question 1. Is there an agreement between undertakings. Decisions by association of undertakings’ and ‘concerted practices’? Address condition of what an undertaking is. Publicly owned company= discuss if qualifie...

Description

ADDRESSING A PROBLEM QUESTION ON TFEU 101 ! Answer 4 questions when addressing a 101 (1) question! 1. Is there an agreement between undertakings. Decisions by association of undertakings’ and ‘concerted practices’? Address condition of what an undertaking is. Publicly owned company= discuss if qualifies as undertaking. Focus on activity don’t care if private or public. Höfner 2. Restriction by object or effect(define market) ( appreciable - market threshold : 10% combined for horizontal and 15% each for vertical agreement)! 3. Effect on trade. (trade between member states). UNLESS have an effect on trade then —> national law. Jurisdictional requirement. Look at commission notice.! Next : whether any applicable exemptions 101 (3)! 2 positive :! 1. Efficiency gains! 2. Pass on to consumers! 2 negative! Indispensable ! No elimination of all competition ! 1. What types of anti-competitive practice(s) is Article 101 designed to control? 2. Regulating conduct of two or more companies under the market. • -Prevention of collusion between firms which has harmful effects on competition and leads to the detriment of consumers. Types include : directly or indirectly fixing purchase or selling prices, listing or controlling production, market technical development or investment,, share markets or sources of supply, apply dissimilar conditions to equivalent transactions. Cartels. ! 1. Why does the Article mention ‘agreements’, ‘decisions by association of undertakings’ and ‘concerted practices’? 1. Find some sort of common behaviour. Agreement : meeting of minds or concurrence of the wills ( - : There has to be some form of collusion which prevents undertakings from acting independently and it removes the degree of uncertainty as to the operation of the market in questionT-Mobile Netherlands BV and others ! - Thus, two or more undertakings are required : there must be some sort of reciprocal conduct.! • Agreement : Concurrence of wills between at least two parties. Important that commission cannot hold unilateral conduct within the meaning of article 101 (1). Bayer v Commission: Distinction with genuine and merely apparent unilateral behaviour. Necessary for undertaking in question to have expressed their join intention to conduct themselves on the market in a specific way. Unilateral conduct is not caught under 101(1) unless there is a dominant position on the market! • Decisions by associations : Any decision on a rule or code of conduct. Wide requirement. Serves to preclude the possibility of firms colluding with one another in ways other than by agreements especially where trade associations are concerned. Wouters : to ensure principle is effective article 101 (1) covers not only direct methods of coordinating conduct between undertakings (agreements and concerted practices) but also institutionalised forms of cooperations- situations in which economic operators act through a collective structure or common body.! • Wouters : s it a decision: prohibiting lawyers and accountants working together. Bar association or also in trade associations. Often trade associations could form another route for cartel behaviour. ! • Difference commonality of a market. ! • Concerted practices : Allows competition enforces to catch secretive arrangements and collect circumstantial evidence. Rule that lowers the evidential threshold. Form of

coordination between undertakings where parties have not yet reached the stage of an actual agreement but knowingly coordinate their actions and cooperate instead of competing with one another.= may lead to abnormal competitive conditions on a given market. A concerted practice might be found, for example, where one company “signals” to its competitors a future price increase, and that company and its competitors then were to increase prices at or about the same time. 2. What is an ‘undertaking’ for the purposes of Article 101? In your view, would the following be considered to be an ‘undertaking’: barristers, accountants, opera singers, hospitals?!

• Definition : Höfner and Elser v Macrotron it has been said that an undertaking ‘’encompasses •

every entity engaged in an economic activity regardless of the legal status of the entity and the way in which it is financed.’’ Focus is on economic activity! Economic activity: offering of goods or services on the market. Firma Ambulanz Glöckner Or where the activity could at least in principle be carried on by a private undertaking to make profits. Albany International BV!

• Barristers : Wouters : bar of lawyers= undertaking because it is an entity carrying out an economic activity ( form of legal assistance carried out an economic activity.)!

• Accountants- Similar to lawyers = it is an entity carrying out an economic activity)! • Opera singers : They are paid and the public pays to see them at a theater. Similar to football

• •

• • • • •

clubs = undertakings :Piau Case : Football nay football clubs is an economic activity, position does not alter because the national associations group amateur clubs alongside profession ones. ! Distinction do employees of a firm count as undertakings : NO! Hospitals : Depends purpose is economic or social? A body will not be caught where and to the extent its exercising public law powers. If those activities connected with and inseparable from the exercise of public powers= as in Eurocontrol ((tasks of maintaining and improving navigation safety = within public interest) . Fenin V Commission - health service was not an undertaking bc operated on principle of solidarity. Humanitarian cause. ! Tricky hospitals : competition law is effectively EU law. Way different MS regulate hospitals is different. In some :providing services in the principle of solidarity= means no economic activity. Employees = not an economic undertaking. e.g CEO not acting personally, company engaging in it. Offerings goods and services on the market = economic activity NOT the purchasing of the activity. Fenin (eu case) contrast with Bettercare (uk) Notion of undertaking i.e notion of economic activity discussed in

3. What are the principal evidential problems associated with establishing the existence of a concerted practice?! - Start by observing common conduct in the market. e.g 3 firms raise prices at same time. Commission gets a complaint from a 4th firm saying cartel. ! - Oligopolistic market : e.g 4 main players where product is rather homogenous. 3 raise prices by same margin at the same time for 2 years. Complaint by fourth one saying cartel practice by competitors. Annual meeting of trade association know held an extra meeting. Same area same time. Commission observes common conduct. - Counter argument : Market dynamic and flexible and have to adapt. Consequence of increasing meetings a year. raw materials

• Start by 3 scenes :

1. Contact 2. Market conduct : I.e prices go up 3. Causation. (trickiest) If accused this must be rebutted. If no hard evidence and only circumstantial evidence.

• Circumstantial evidence to prove : Look at prices across Europe and suddenly they become

fixed/raise price. Or another circumstantial evidence : price became fixed or increased but shortly before chief executives happened to be in the same town at the same time. Look at all the evidence if no plausible explanation other than that concerted practice= then= collusion Woodpulp. Note : circumstantial evidence can be misleading. Are situations where companies behave in parallel without reaching agreement e.g oligopolies. Theory of games. Prisoners dilemma. Recognised and court of justice has in ICI v commission : every company has the right to behave and adopt its conduct intelligently to that of its competitors. e/g adopting yourself intelligently to your competitors. Could be a cartel or innocent parallel behaviour. Need a plausible explanation. Without this provision so many cartels would not have been caught. !

4. When does an agreement or concerted practice have the object or effect of preventing restricting or distorting competition? Are the concepts of ‘object’ and ‘effect’ mutually exclusive or are they complementary? Can you give examples of separate situations in which one could say ‘object’ and ‘effect’ exist? *** ESSAY QUESTION. ! 1. Starting point look at object : bc then don’t need to look at effect. Not very wide. Look at content of agreement. Agreement may reveal something bad for competition. Case law describe it as ‘’harmful to competition. Wilsher explains that it has to be a narrow box. ! - Court widening object box : ! - Allianz case : more insurance policies you sell from us = better terms from insurers. Hungarian law prohibited this. Said restriction by object. Preliminary question —> Court of justice :No price fixing. Addressed it by looking at content of this agreement. Does it reveal a sufficient harm of competition. ! 2. Look at objective intention ! 3. Legal and economic context. Problem in Allianz widened the economic context. (legally not allow this in Hungary) Paragraph 36 from Allianz. Regard to content of provisions, objectives and the economic and legal context it forms part. When determining that context= appropriate to take into consideration nature of goods and market structures. CJEU : asking enforces to take into account the real conditions in the market. Dangerous because blurs it with effect. ! Did court try to restrict object box after Allianz: Groupement des carted Bancaires! - Object : agreements that have as their object the restriction of competition. e.g Hardcore” restrictions such as price-fixing and market sharing are generally considered to constitute restrictions by object - Effect : agreements that have as their effect the restriction of competition. Looked at when the object is not clear. Resource intensive analysis - 1. The relevant market must be defined. - 2. Market shares and clauses of agreement - 2. Effect : vertical agreements : some permitted and some not. E.g exclusive distribution and selective distribution. Delimitis. Supplier of beer said to lease his beer house. Addressed it as an effect restriction. Look at market, market shares. Cumulative effect = ask for more information. - Not mutually exclusive : if establish object don’t need to look at effect 5. What is the de minimis doctrine =? Why does it exist?! : the practices must appreciably affect trade between member states. Art. 101(1) TFEU does not cover conduct which has an insignificant effect on competition. ! - Vertical agreements : Threshold of 15% aggregate market share in any of the relevant markets. ! - Horizontal agreements :Threshold of 10% aggregate market share in any of the relevant markets. ! - Look at notices 2004 : effect on trade. ! - Notice on De minimis notice : 2004 and issued new one in 2014 after Expedia.Expedia case told us not applicable to object restrictions because these always have effect on competition!

- In the case of undertakings with market shares below the relevant thresholds, the Commission will not institute proceedings (see Chart C35), unless the agreement contains a hardcore restriction; Why: Agreements that affect competition within the terms of article 101 (1) will not be caught unless they have an appreciable impact both on trade between member states and on competition. No point in holding agreement liable which only have a negligible effect on competition. ! - commission resource intensive. Costly!

6. Alpha and Beta are major watchmakers in the EU. Alpha and Beta for a number of years discussed joining forces in relation to the provision of repairs service for their watches. Alpha and Beta have recently created a joint venture company, Newco. New co. will take over the running of repairs business of Alpha and Beta. According to the parties, Alpha and Beta, the joint venture will enable them to achieve considerable operating efficiencies, which will lead to better services and lower prices for customers. The agreement between Alpha and Beta states that Newco. will have a life duration of 10 years. The agreement also states that neither Alpha nor Beta will compete with each other on the markets where Newco. operates.! Alpha and Beta would like to know whether this agreement can be exempted under Article 101(3).! Focus 101 (3) 4 conditions : whether 4 conditions fulfilled or can argue that they are. 1. Efficiency gains : Consteg v Grundig : CJ stressed that the improvement must show appreciable objective advantages of such a character as to compensate for the disadvantages which they cause in the field of competition. Lower Costs and Qualitative (better services). 2. Fair share for consumers: Pass on benefits must at least compensate consumers for any actual or likely impact caused to them by the restriction of competition. ! 3. Indispensability of restrictions: This balancing exercise should not include restriction that in any event are unnecessary to achieve the efficiencies. 4. The agreement does not afford the parties the possibility of eliminating competition. Short term efficiency gains must not be outweighed by longer-term losses stemming from the elimination of competition. -No elimination of all competition!...