Flashcards in Anti-competitive agreements cases and facts Deck (43):
Prohibits anti-competitive agreements, decision and practices. Such agreements are void in law
Companies can no longer go to competition commission to check whether agreement is anti-competitive
Notice on Agreement of Minor Importance (NAOMI)
Legislation for defence of de minimis
Comm Recommendation on Micro, Small and Medium Sized Enterprises
So small not affecting market, allowed leeway in terms of anti-competitive rules.
Hofner & Else
Undertaking means any economic activity (broad)
World Cup 1990 Package Tours
Fifa and Italian FA are undertakings under Art 101
Dealt with motor-cross racing, were not commercial company but had important rights, so were undertaking
Whether article 101 is engaged is a question of 3 elements;
- Inter-state trade
- Object or effect of prevention, restriction or distortion of competition
What are the 3 forms of collusion?
Agreements, decision and concerted practices
Comm v ANIC
Wide definition, contracts, oral agreements are all agreements for purposes of article 101
Treuhand v Comm
Even gentleman’s agreements covered under article 101. Even though not part of cartel, consultancy to cartel, however still anti-competitive as hiding evidence of cartel.
Tepea v Comm
Oral and written agreements
Hercules CHemicals v Comm
Gentlemans agreements fall under art 101
Bayer v Comm
What if just one party? If genuinely 1 company then won’t be anti competitive, but if one company being anti-competitive and other acquiescing, still anti-competitive
EC doesnt need to establish whether it is Art 101(1) or Art 101(2) breach
Vereniging v Comm
Even organisation which produces non-binding recommendations fall under 101
Transocean Marine Paint Association
Recommended to members that territories split up and don’t compete with each other. Court held this was fine as it was a niche product, so most important thing was that the product was available in territories, then competition would be worried about. (rule of reason approach)
Decision by trade association that goods distributed exclusively under common label is decision under Art 101(1)
Concerted practices definition; A form of coordination between undertakings which, without having reached the stage where an agreement properly so-called has been concluded, knowingly substitutes cooperation between them for the risks of competition
ICI Ltd v Commission
Raised prices based on raw materials, but no actual change in raw materials, just a concerted practice
Ahlstrom (Woodpulp Cartel)
Group of companies producing woodpulp. Accused of CP but found not guilty as genuine rise in raw materials and transport costs.
STM v Maschinebau
Mere potential to affect inter-MS trade (warned against anti-competitive behaviour in the future)
Consten v Grundig
Made radio and TVs. Consten French group of shops. Exclusive distribution agreement between Consten and Grundig. This creates lack of choice and artificially high product, depending on demand. The courts look at the effect on the consumer, if negative effect then may be anti-competitive, if no then may be allowed
Pronuptia de Paris
When franchise taken up prohibits setting up of other companies using franchise within a certain geographical distance. However court allowed this as rule of reason means that this product is getting into a new area.
Brasserie de Haecht
Network of agreements supplying beer to various pubs etc. All Belgian beers which was anti-competitive as though all in one state (not cross border) the effect of agreement was to prevent competition from foreign beers.
Horizontal distortion of the market - Carved up market by all manufacturers at same level of industry participating in concerted practices
Vertical distortion of the market - Controlled supply chain through production of bananas. Distorted competition as had too large share of market, and brand dominance
STM v Maschienbau
German company Maschinenbau wanted to move into France, STM assisted Maschinenbau as expensive getting into new market. Though looked like an anti-competitive contract, it actually increased competition as it introduced a new product into a market. Distortion as object. Evidence of rule of reason, justified as access to new territory and consumer has share of profit.
European Night Services
Requires full analysis of market, product, economic conditions etc to determine whether Art 101(1) has been breached (Different railways working together distorted competition)
Brasserie de Haecht
Collective effect of lots of small agreements can affect trade. Must examine the whole market to determine if Art 101(1) has been breached. (Belgian brewery had beer ties, which the effect of was to limit imported beer access to the market, as market had already been carved up – therefore by effect is anti-competitive)
Article 101 (a)-(e) list of prima facie anti-competitive agreements
o Price fixing
o Limit or control production
o Sources of supply
o Dissimilar trading conditions
o Supplementary obligations
What 3 defences are there for an anti-competitive agreement?
- De minimis
- Block exemption
- Rule of reason
What is de minimis
No appreciable effect of inter state trade
Volk v Vervaecke
Made dishwashers etc, tried to move out of MS into other MS. Had agreement with Vervaecke which terms of contract broke competition law. However had such small share of market that didn’t break competition law. (rule of reason concept)
What are the levels set in NAOMI?
Less than 10% share of market - horizontally not applicable
Less than 15% share of market - vertically not applicable
What are the positive justifications of the rule of reason 101(3)?
Allow consumers a share of the profit
What are the negative restrictions on the justifications of the rule of reason 101(3)
No dispensable restrictions
Does not eliminate competition
What 2 cases are examples of the rule of reason approach?
STM v Mashinebau - access to new territories
Pronuptia de Paris - Geographical ban on establishing franchise within certain distance -justified as greater choice for consumer
What legislation allows block exemptions?
What are block exemptions?
categories of companies which are exempt from competition laws. The setting of block exemption limits is based on 101(3) principles of rule of reason
Block exemption 330/2010
Vertical agreement with less than 30% share and no hardcore offences then will be exempt from competition law
Courage v Crehan
Tied pubs to beer. Bought all alcohol from Courage brewery as tied in, broke agreement as got spirits from other outlets. Courage sued, Crehan said tied pub illegal as contravened EU competition law. EU competition law supersedes UK competition law