This is an extract of our Anti Competitive Agreements Decisions And Concerted Practices document, which we sell as part of our International Competition and Anti-Trust Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
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1. Understand and explain the elements of Article 101 TFEU and compare these to other regimes around the world
2. Identify and apply methodology to analyse potential breaches relating to Article 101
3. Understand Chapter I of the Competition Act and its relationship to Article 101
4. Consider recent decisions of the European Commission and Competition and Markets Authority relating to anti-competitive agreements
5. Apply letter writing skills Outcome 1 - elements of Article 101 TFEU Definition
Undertakin g Decisions by association s of undertakin gs Concerted Practices
Art 101 TFEU prohibits business agreements that may affect trade between Member States and have as their object or effect the prevention, restriction or distortion of competition in the common market Covers all types of commercial arrangements whether in writing or oral (includes gentlemen's agreements). It is sufficient for undertakings to have expressed their joint intention to conduct themselves on the market in a specific way
- Covers virtually all legal or natural persons carrying on economic or commercial activities
- Must be separate undertakings i.e. not patent or subsidiary companies or agency relationships
- Decisions by for example trade associations will be caught by Article 101-Concerted practice is defined a s a form of coordination between businesses which falls short even of an informal agreement, but which knowingly substitutes practical cooperation between them for the risks of competition Legislation extends to include conduct that impacts on competition but is made outside an agreement or decision Issue with establishing a breach of concerted practices is one of intent and evidence Parallel pricing is not conclusive evidence of a concerted practice but will be strong evidence of one if having regard to the specific features of the market concerned the conditions of competition including the prices charged are different from those which would normally be expected if there were effective competition Generally in an oligopoly (where the market is controlled by a number of undertakings) parallel conduct is often regarded as a natural economic
Effect of tradeObject or effect-Prevention, restriction or distortion of competitio n of the internal market Appreciabil ity-phenomenon and so will not breach Article 101 Article 101(1) will catch any agreement that is capable of influencing the pattern of trade between MS's Does not need to have such an effect Agreements are regarded not to affect trade if the combined market share of the parties to the agreement are less than 5% on the relevant market provided in the case of horizontal agreements that the parties' aggregate turnover in the EU does not exceed EU40 million (NAAT) (in relation to vertical agreements seller's turnover may not exceed EU40 million) If an agreement has as its object or effect the prevention, restriction or distortion of competition it will be caught by Article 101(1) Prosecution of Object infringements: Competition authorities do not have to prove that there would be an affect on competition, where an agreement may affect trade the mere existence of the infringement is enough Current list of object infringements in regard to horizontal relationships: o Fixing prices o Exchanging pricing information o Market sharing o Limiting output o Limiting sales o Exclusive dealing Current list of object infringements in regard to vertical relationships: o Resale price maintenance o Export bans (e.g. preventing a distributor from exporting goods outside allotted territory) Prosecution of effects infringement must show that there is an appreciable effect on competition on the market Arrangement as a whole needs to be considered (such as the market in which it operates, the parties and their respective shares) in order to assess if there has been an impact on competition Terms prevention, restriction or distortion used relatively interchangeably Ask the question 'does the agreement restrict actual or potential competition that would have existed without the agreement or restrictions contained in it?
Agreement will not breach Article 101(1) where it has only an insignificant effect on the market, taking into account the weak position which the persons concerned have on the market of the product in question See NAOMI and NAAT rule
Article 101(2) - sanction Article 101(3) - exemption-Any agreement in breach is automatically void - i.e. has no effect (nullity of the clause in the agreement, not whole agreement) Must satisfy 4 conditions: o Agreement must contribute to an improvement in the production or distribution of goods or the promotion of technical or economic progress o Consumers will get a fair share of the resulting benefit o The agreement does not impose on the undertakings restrictions which are not indispensible o The agreement will not afford them the possibility of substantially eliminating the competition Exemption can either be an individual exemption or a block exemption Individual exemption o Undertakings have to make their own assessment of the compatibility of their arrangements in the light of EU competition law and the case law o Undertaking must prove that the conditions under 101(3) are met Block exemption o Commission issued block exemptions which outlined a set of criteria within which an agreement would be exempted from Article 101(1) o Block exemptions are accompanied by guidelines which provide an invaluable source of information on how the Commission will interpret the exemption o Block exemption regulations can be withdrawn where a particular agreement has effects incompatible with Article 101(1) o Generally have a life of 10 years, can be reissued after a consultation period
Outcome 2 - methodology to analyse potential breaches
1. Explain why Art 101 TFEU is relevant:
? State: 'Art 101 TFEU prohibits business agreements that may affect trade between Member States and have as their object or effect the prevention, restriction or distortion of competition in the common market'
? Consider in turn each of the 5 constituent parts to Art 101?
2. Has there been an AGREEMENT?
? Included within the scope of Art 101(1) TFEU are:
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