Competition Law Article 101

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Article 101

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3 elements

1) agreements between undertakings, decisions by associations of undertakings and concerted practices

2) which may affect trade between MS

3) which have as their object or effect the preventions, restriction or distortion of competition within the internal market.

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Element 1

- undertaking

- agreement

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Undertaking = any legal or natural person engaged in some form of economic or commercial activity. (Hofner and Elser)

Agreement = includes formally and non-formally constituted agreements

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Element 1

- associations of undertakings

- concerted practice

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Associations of undertakings = trade and professional associations

Concerted practice = competitors co-ordinate their behaviour rather than competing (Sugar Cartel cases) these agreements have anti-competitive effects regarding pricing, marketing and market-sharing.

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Agreements which apply to Art 101(1)

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Horizontal

Vertical

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Horizontal agreements

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Agreements between parties operating at the same level of the production/distribution chain

For example, an agreement between retailers

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Vertical agreements

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Agreements between parties operating at different levels of the production/distribution chain

For example, a distribution agreement between a manufacturer and a retailer

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Element 2

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STM = effect on trade wherever it is 'possible to foresee with a sufficient degree of probability on the basis of a set off objective factors of law or of fact that the agreement in question may have an influence, direct or indirect, actual or potential, on the pattern of trade between MS.

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Factors to take into account

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Legal and economic context of an agreement, concerted practice or decision (Wilkin)

Similar contracts = together may result in an effect on trade. Must appreciably effect trade, contained in the Guidelines on the effect of trade = page 616 statute book.

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Element 3

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Where an agreement or decision is lacking having the object to prevent, restrict or distort trade the effect of the agreement must be considered.

The Notice on agreements of minor importance = If it has an insignificant effect on the market it will not fall within the scope of Art 101 = De minimis standard.

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Notice on agreements of minor importance

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Does not apply to agreements which have as their object the prevention, restriction or distortion of competition. Or to agreements containing hardcore restrictions.

This is because infringements by object have an appreciable effect on the market.

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Article 101(2)

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Any agreements or decisions prohibited shall be automatically void however if it is possible to only remove the restrictive clauses then only those clauses will be void.

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Article 101(3)

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Applies to individual and block exemptions.

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Individual exemptions

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Usually arise as a defence to enforcement proceedings.

Agreements must contribute to improving production, distribution, promoting technical or economic progress and consumers benefit.

There must be no unnecessary restrictions and no substantial elimination of competition.

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Block exemptions

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Certain categories of agreements.

Regulation 330/2010