Commercial Law

4. Article 101(1)

Riccardo Ghetti
www.riccardoghetti.it
Article 101(1) part 1
1. Article 101(1)
2. Undertakings
3. Associations of undertakings
4. The single economic entity doctrine
5. Reorganisations and sales
6. The notion of “agreements”
7. The notion of “decision”
8. The notion of “concerted practice”
9. The object or effect on competition
10. The de minimis doctrine
11. The effect on trade
1. Article 101(1)
legal status A. Legal requirements

informative, non-prescriptive content

1. Article 101(1) Legal consequence exemptions
1. Article 101(1)

Cartel/antitrust à economic v. legal notion

A. Minimum legal requirements

B. Legal consequences

C. Exemptions
2. Defining «undertaking»
The same firm might be an undertaking
- Functional approach à in some circumstances but not in others

- Offering goods or services on a mkt

- Non need for a profit motive
- Engaged in economic activity
- Regardless of legal status
- Regardless of financing

- Solidarity
- Non-economic activities - Exercise of public auth. powers
- Procurement ancillary to NEA

- The professions à Self-employed MDs, lawyers, accountants are undertakings

- Employees à Incorporated into the undertaking they work for

3. Associations of undertakings

A representative body that takes decisions

followed by its members

(from Wouters)
- Defined through functional approach

- Included in the scope of article 101(1)

4. The single economic entity

Article 101(1) does not apply to agreements beween legal

persons forming a single economic entity

- Notion of control

Subsidiary à parent-subsidiary relationships (intra-group operations)

are excluded from article 101(1), but using a wide definition:

When “a company exercises decisive influence over the other with

the result that the latter does not enjoy ‘real autonomy’ in
determining its commercial policy on the market” [Viho]
4. The control chain
shareholders
shares

votes
majority in GM

appointing > dictating board

of directors decisions

controlling the
managing the
company
business
 4. Company and business
The entrepreneur… …runs a business

The entrepreneur is a legal subject The business is an activity

It could be a It could be a It could be carried out by any

natural person legal person legal being, but regardless of
who is carrying it out…

It could be a It could be a
…the activity will be subject to
corporation different entity
business law

Applicable law
Subject to applicable Subject to the law
corporate law applicable to such entity
4. The single economic entity
When “a company exercises decisive influence over the other with
the result that the latter does not enjoy ‘real autonomy’ in
determining its commercial policy on the market” [Viho]

Parent and wholly

owned subsidiary
Parent of a joint venture
Majority shareholder

Minority shareholder
Implications?

à See Whish
5. Reorganisation and sales

1. Reorganisation does not per se exempt a firm from liability

2. Sale of business: the seller remains liable unless…

liability extends

- …the seller ceases to exist;

to the buyer

- …the seller no longer carries out an economic

activity on the market and has a strong structural
links with the acquirer.
6. The notion of «agreement»

ARTICLE 101(1) IS NOT LIMITED TO FORMAL

CONTRACTS à substantial approach

Requires “the existence of a concurrence of

wills between at least two parties, the form in
which it is manifested being unimportant so long
as it constitutes the faithful expression of the
parties’ intention” [Bayer].
7. The meaning of «decisions»

DECISIONS BY ASSOCIATIONS OF UNDERTAKINGS

The coordination of individual firms’ behaviour might happen

through trade associations, including:

- the constitution of the trade association itself

- the decision of a trade association

8. «Concerted practice»
- CP do not reach the threshold required for “agreement”

- Often interested party destroy evidence of agreements

- “a form of coordination between undertakings which, without

having reached the stage where an agreement properly o-called
has been concluded, knowingly substitutes practical cooperation
between them for the risks of competition [Dyestuffs]

- ”even in the absence of anticompetitive effects on the market”

[Polypropylene]…

- … and with a presumption between conduct and contact [Hüls].

9. The object or effect on c.

THE OBJECT OR EFFECT OF RESTRICTING COMPETITION

- OBJECT AND EFFECT MUST BE READ DIJUNCTIVELY

- object: the objective meaning and purpose of agreement

- effect: on actual or potential competition

- context analysis + counterfactual reasoning

10. The de minimis doctrine

ARTICLE 101(1) DOES NOT APPLY IF THE AGREEMENT DOES NOT:

- Have an appreciable impact on inter-state trade…

- …or on competition
11. The effect on trade

101(1) applies only when decision or concerted practices may

affect trade between Member States

- The effet must be appreciable

- Broad notion of inter-state trade

- Appreciability is a function of market share

 Riccardo Ghetti

www.riccardoghetti.it

www.unibo.it