Ec Competition Law

Front 1

Why control the market?

Back 1

- Control market power
- Avoid loss of consumer welfare
- Prevent monopolies from emanating
- Secure a "fair" market
- Maintain incentives to increase efficiency

Front 2

Art 81: Not applicable on...

Back 2

Vertical integration: seller and producer part of the same group, e.g. Nespresso or the Parker case ("single economic entity" doctrine) Independence test

Commercial agents: "true" commercial agents, e.g. car dealers.
TEST:
a: commercial risk directly related to the sale
b: risk related to market specific investments

Front 3

Art 81: Undertakings

Back 3

Höfner: "every entity enganged in an economic activity, regardless of the legal status of the entity and the way which it is financed" Does not have to be profitable.

Exception 1: Pure "state activities" Eurocontrol. The important thing is whether the activities themselves have a "public authority", not the status of the organization. BUT: Ambulanz Glockner: ambulance service and regular patient transportation. Undertaking

Exception 2: services based on solidarity. INAIL: French insurance not based on payment, FENIN case: Spanish medical supply buyer for hospitals

Exception 3: employee and trade unions (but only for activities directly relating to this)

Front 4

Art 81: Agreements

Back 4

Does not have to be legally binding (gentlemans agreement have been held to be an agreement)

May be oral

Concurrence of wills of at least 2 parties

VV Passat case: VW sent circulars and letters urging dealers not to sell Passat at a discounted price. ECJ rejected that it was established that there were an agreement (Whish p. 112) (but this could be an agreement, unclear where to draw the line)

Sandoz case: Export prohibited stamped on invoices. Tacitly accepted

Ford case: Decision not to supply right-hand driven cars as part of distribution agreement. ECJ didn't consider it a real agreement, but subsumed it under a unilateral agreement(which is doubtful).

Adalat case: unilateral policy of quotas is no agreements. Cheap drugs in Spain parallelimported into UK. Producer stop supplying Spanish marked with more than they need.

Front 5

EC Art 81: Concerted practice

Back 5

ECJ in Dyestuffs: (Meant to prohibit) " a form of coordination between undertakings which, without having reached the stahe where an agreement properly so called have been concluded, knowingly substitutes practical cooperation between them for the rusk of competition"

In Suiker Unie: "any direct or indirect contact" object or effect either "to influence the conduct of the market" or to "disclose to a competior" the price plans for the firm etc.

Whenever transparency is created, it should be checked out.

Concerted practice do not require a proof or a plan, e.g. Polypropylene

Burden of proof: no other credible explanation than collusion

Opposed to: right to adapt intelligently to the market

Front 6

Art 81: Metro doctrine: selective distribution

Back 6

No restriction in competition in case of selective distribution, if the case comply with 3 criteria:
a: Product necessities selective distribution (complex goods, luxury goods, newspapers)
b: Selection criteria purely qualitative
c: Restrictions imposed on dealers NO further than NECESSARY for quality of product

But: Market share under 30% ,if not it is not permitted

Front 7

Art 81: Complex cartels

Back 7

Agreement or concerted practice. No need to characterize them as one of them.

Concept of single, overall agreement (oral agreement covering individual meetings over a longer period of time between many participants)

Front 8

Art 81: Associations of undertakings

Back 8

Trade associations, Bar associations etc.

Decision with respect to market behavior. No binding force on the members is required.

Front 9

Art 81: "may effect trade between Member States"

Back 9

Non appreciability presumed if aggregate market share is less than 5%

Aggregate market share in horizontal cases: 40 mio Euro or more, total amount of undertakings

In vertical cases: supplier over 40 mio Euro

"may effect": must be possible to foresee

Front 10

Art 81, III Exception

Back 10

Criteria defined in the paragraph.

Burden of proof: The undertaking concerned

Front 11

EC Art 81: "object" to restrict competition

Back 11

Horizontal agreements:

- To fix prices
- To exchange current or future price information
- To share markets
- To limit output
- To limit sales
- for collective exclusive dealing

Vertical agreements:

- single branding
- to fix minimum retail price
- to impose export bans

Front 12

EC Art 81: "effect" the restriction competition

Back 12

Even though a policy has another legitimate purpose, it is illegal according to Art 81 if it's effect is a restriction of competition

Front 13

EC Art 82: abuse by "undertakings" in a dominant position

Back 13

Undertaking: to be read in the same way as in Art 81.

Front 14

EC Art 82: abuse by undertakings in a "dominant position"

Back 14

- Market share in focus

2 steps:
1. Determine relevant market
2. asess market structure to determine dominance

Front 15

EC Art 82: "relevant market"

Back 15

2 steps:
- product market
- geographical market

Front 16

EC Art 82: "relevant market" - Product market

Back 16

Product market:
a. Demand substitutability (look at recent shortages in the market, customers prefs. etc)
b. Supply substitution (price of changing production, short term, withouth major risks)

Front 17

EC Art 82: "relevant market" - geographical

Back 17

What is the potential radius of stores the consumer will turn to in his search for the product? For grocery; not a big radius. Car: bigger radius

Front 18

EC Art 82: "relevant market" - SNIP Test

Back 18

Small Non-Transitory Price Increase (5-10%)

Is this profitable for a potential monpolist, or will he experience spillover? Do this test until it doesn't become profitable, then you find the relevant product market.

BUT: Cellophane Fallacy: monopolist may already charge "maximum" price for the product, creating a spillover in non related markets

Front 19

Art 82: Exclusionary abuses

Back 19

Non price based abuse:
Tying (slips)
Refusal to supply (thumb down)
Single branding (Beatles 1#)

Price based abuses:
Tying (Train, Deutsche Bahn)
Fidelity rebates (Chip, Intel)
Predatory pricing (Baguette, Wannadoo)