Concept of an Undertaking Flashcards
(16 cards)
Why is “Undertaking” an important term?
mentioned in art 101 + 102
Many entities (businesses) may prevent,
restrict or distort competition, but, the key
question is whether they can be deemed to be undertakings for the purposes of EU
Competition Law?
Defining an “Undertaking”?
Not defined in TFEU at any stage.
Meant it had to be defined by the EU courts..
Liberal Approach?
the courts applied the
term ‘undertaking’ in its widest sense,
thereby giving them considerable
discretion in terms of applying core
objectives/functions of EU Competition
Law
What was the first judicial examination of an undertaking?
C-41/90, Hofner and Elser v Macrotron
GmbH (1991)
German public agency offering employment services.
Held: even if it is a public agency it performs an economic activity and is therefore an undertaking
ECJ - “every entity engaged in economic
activity regardless of the legal status of the entity”
can still be undertaking even if organisation lacks a profit motive or, does not have an economic purpose
Pavlov and others v Stichting Pensioenfunds Medische Specialisten
(2000)
consistently held that any activity
consisting in offering goods or services on a given market is an economic activity
businesses do not
have to be making profits or be engaged in
profit-making activities to be considered an
undertaking
Wouters case
(2002) Case asked can professional bodies—like the Dutch Bar Association— be considered undertakings when setting rules that affect competition?
any entity engaging in economic activity—even non-commercial organizations—can be subject to EU competition law if their actions affect market competition
C49/07 MOTOE and the functional approach
A legal entity may be acting as an
undertaking when it carries on one activity
but not when it carries on another activity
(2008) greek motorsport body (non-profit) giving race approvals and organising events
non-profit status and the
fact that it took part in the decision-making
process of public authorities could not
prevent ELPA from being considered an
undertaking. Commercial Exploitation of motrocycle events
“The classification of an activity as falling within the exercise of public powers or as an economic activity must be carried out separately for each activity exercised by a given entity”
Expanding on the functional approach
An example: A local authority
E.G., Dublin City Council
1. It can adopt speed limit bye-laws
2. It can adopt bye-laws specifying where
cars can/cannot be parked
3. It can own land which it operates
commercially as a car park e.g ILAC Car Park (1.78 million euro)
These must be assessed separately
INAIL case
(2002) Italian social insurance provider,
argued that these services provided were fully comparable to those provided by a private insurer
ECJ ruled that the insurance scheme operated with a clear social, rather
than commercial purpose.
Held: Not an undertaking as had social purpose, state control and no competition
Selex Sistemi Integrati
SpA v Commission
(2006) decide whether Eurocontrol,
established to provide navigational safety in the airspace of Europe, was acting as an undertaking.
delivering technical assistance and civil-military expertise across the full spectrum of air traffic management
CFI concluded that some of Eurocontrol’s
activities were economic in nature and some were not. But later, on appeal ECJ said this was an error.
Demonstrates need for functional approach.
“engaged in
economic activity”
any activity which involves offering goods or services on a market (under market conditions)
Spanish Courier Services: Spanish post office is an undertaking
Hofner: German Federal Employment Office was undertaking, provided services in market
What can be considered an undertaking?
entity’s legal status is irrelevant in the
assessment as to whether it constitutes an
undertaking
◦ All of the following have been held to constitute
undertakings:
Companies and partnerships, agricultural
cooperatives, P & I clubs and trade associations
Natural persons (but not employees)
Note: natural persons (acting as final consumers) are not deemed undertakings
State owned corporation too…..
Which activities are non-economic?
Social protection
◦ Pensions
◦ Health insurance
◦ Health care
Solidarity meaning?
Sodemare v Regione
Lombardia (1997) as ‘the inherently
uncommercial act of involuntary subsidisation of one social group by another’
exclusively social function
based on the principle of solidarity, not an economic activiity
The Professions?
Members of the liberal professions can be
undertakings for the purpose of the
competition rules
◦ Self-employed medical specialists
◦ Members of the Dutch Bar (Wouters / 2002)
In 2004, the Commission imposed a fine of
€100,000 on the Belgian Architects
Association for publishing a scale of
recommended minimum fees
Two or more legal entities
The crucial question is whether the parties
to an agreement are INDEPENDENT IN
THEIR DECISION-MAKING or whether one
has sufficient control over the other?
shareholding that the parent has
in its subsidiary
Does the parent own the totality or almost
the totality of the shares in the subsidiary?
If so, presumption that it controls the
subsidiary’s affairs
Akzo Nobel v Commission held 100% of share capital of subsidiaries
