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Flashcards in LECTURE 2 - competition law Deck (13)
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1

Competition law (definition)

Competition law is a set of norms which prevent monopolies and maintain fair competition at the market

2

Monopoly (definition)

A position in which one company produces for an entire market or industry

3

Why is a monopoly bad?

no competition -> limits innovation, monopolist can charge any price it wants or stop production, the quality will be less important and the customer pays for it all

4

What does competition law? (5)

- Prohibits companies to enter into agreements limiting the competition

- Prevents very big companies from abusing their dominant position

- Prevents governments from distorting the competition

- Prevents monopolies from occurring through merger control

- Recognizes the necessity of some monopolies

5

Sources of the EU competition law (4)

- TFEU 101 -109 + Protocol no. 27 on the internal market and competition
- The Merger Regulation (Council Regulation (EC) No. 139/2004)
- European Commission delegated acts and soft law
- ECJ case law

6

Enforcement of EU competition law is done in two ways:

- Ex ante approval of mergers and state aid (reviewing before transaction)
- Ex post investigations (under 101, 102 and 107)

7

Article 101 TFEU prohibits: (5)

- Undertakings and associations of undertakings to

- Enter in the agreements or engage in concerted practices or make decisions

- Which may affect trade between member states

- Which have as their object or effect the prevention, restriction or distortion of competition within the internal market

- Unless such agreements contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share fo the resulting benefit

8

Undertakings (definition)

Undertakings are entities engaged in economic activity

9

Pro-competitive effects (3)

- Block exemptions (pro-competitive effects are generally considered to overweigh anti-competitive effects)

- Individual exemptions (pro-competitive effects of the individual agreement overweigh the anti-competitive effects)

- De minimis (anti-competitive effects are insignificant)

10

Article 102 TFEU prohibits (3)

- Undertakings to

- Abuse

- Their dominant position

11

The element of dominance includes two sub-elements:

- Product and geographical market
- Share

12

SSNIP test

Small but Significant and Non-transitory Increase in Price

13

Abuse (4)

- Unfair prices or conditions
- Limitation of production supplies or technical development
- Discrimination (different prices in similar contracts)
- Tying (imposition of unnecessary service)