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ICL Workshop 7
EU+ UKCompetition Law
- Competition Law is Designed to deal with whether an agreement (a contract) affects competition and to protect the Final Consumer (i.e. the law is concerned with the effect that an arrangement may have upon the competitive dynamic of a market). Therefore, the question is whether a contractual arrangement will have an effect on the ULTIMATE CONSUMER. ICL focuses on vertical agreements (i.e. two separate undertakings at different levels of the supply chain, i.e. they are not competitors e.g. Manufacturer and Distributor). Horizontal agreements = agreements between competitors- i.e. at same level of the supply chain Vertical agreements = agreements between non-competitors - i.e. at different levels of the supply chain
ICL Workshop 7
Competition law EU
1.Which competition authority will investigate?
- In EU = The competition Directorate of the European Commission (i.e. The EU Commission)
2.What is the legal basis for its investigation and prosecution?
- In EU = Article 101 TFEU (EU competition law) Article 102 TFEU (Abuse of market power)
3 .Is there a breach of article 101(1) TFEU (anticompetitive agreement between undertakings)? P.383 a. is there an agreement (written/oral/gentlemen's agreement (P's intention + conduct))(say that they distribution agreement constitutes an agreement)
b. between undertakings? (YES legal & natural persons, Co.s, P'ships, FIFA, BUT NOT parent &
subsidiary nor Agency Agree)(Mention that they are undertakings, because they are separate economic entities in the market unlike agents)
c. which may affect trade between Member States Art 101?NAAT rule = if the combined market share of P's is less than 5% on the relevant market + Seller's turnover in the EU is below EU40' it will not affect trade in EU (say specifically)
d. which have as its object/ the prevention/distortion/restriction of competition within the internal market?(say specifically why the agreement is anticompetitive, say what clauses specifically are anticompetitive and say if it relates to the object of the effect on the market and whether they are hardcore or not)
Hardcore/Object Restrictions in Vertical Agreements (Object Infringement)Price-FixingNegative effect on Price: Products become artificially expensive.Export BanNegative effect on Choice (and therefore price).
(Effect Infringement)Exclusive Distribution Provisions;Depends upon context; what other agreements are in place? Examine wider context.Probably answer; 'Potentially has an anti-competitive effect but we don't know on the facts...'Potential Anti-Competitive Clauses (Prep Task Agreement - Just run through and explain - these might be anti-competitive)2.1 - Exclusivity/Territory: No other distributors in the area;2.3 - Exclusivity: Producer will not sell direct in the area.3.4 & 3.5: Minimum Quantity & Maintenance of Stock: Distributor must order minimum quantity
-Application: Not definitely anti-competitive but taken in conjunction with other provisions it may have that effect.
Application: If so restrictive that it has an impact on their freedom - may be. E.g. they have to order so much that they cannot order anything else.
5.3: Control of Packaging
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