EU Competition Law

Alexandros Tsadiras
 Structure
• Introduction

• Conceptualisation

• The concept of ‘undertaking’

• Anti-competitive agreements (Art. 101 TFEU)

 Introduction (I)
• Competition law has always been of central
importance for the EU.
• The precise role and objective of the EU
competition rules are contestable.
• The main provisions of primary EU law are Arts
101 and 102 TFEU
• The EU legislature has played important role in
enacting supporting legislation to amplify the
basic Treaty rules.
 Introduction (II)
• Area characterized by tones of litigation:
Created a body of case law of far greater
sophistication than might be suggested by the
bare words of TFEU provisions.

• Wealth of secondary literature.

 Introduction (III)
• Anti-competitive agreements (Art. 101 TFEU)

• Abuse of dominant position (Art. 102 TFEU)

• Mergers (Merger Regulation and the

Implementing Regulation)
 Conceptualisation

Fragmentation of EU market!!!

By state authorities By private entities

 State authorities
1.Free movement of goods amongst Member States = Free Trade Area (FTA)
2.FTA + common external tariff = Customs Union (CU)
3.CU + free movement of persons, services and capital = Common Market
(CM)
4.CM + single currency = Monetary Union (MU)
5.MU + single monetary and fiscal policy = Economic and Monetary Union
(EMU)
6.EMU + common policies = Political Union (PU)
 Private entities
• Anti-competitive agreements (Art. 101 TFEU)
 Private entities
• Anti-competitive agreements (Art. 101 TFEU)
 Private entities
Agreements are illegal if the participants agree
to:
• share markets or customers
• fix prices
• limit production
 Private entities
• Abuse of dominant position (Art. 102 TFEU)
 Private entities
• Abuse of dominant position (Art. 102 TFEU)
 TFEU competition provisions
TITLE VII
COMMON RULES ON COMPETITION, TAXATION
AND APPROXIMATION OF LAWS
CHAPTER 1
RULES ON COMPETITION
SECTION 1
RULES APPLYING TO UNDERTAKINGS
 The concept of undertaking
• Appreciation of its importance.

• The TFEU does not provide a definition.

• The EU court has taken a broad view.

 Case C-41/90, Klaus Höfner and Fritz Elser v
Macrotron GmbH, 23 April 1991
21. It must be observed, in the context of
competition law, first that the concept of an
undertaking encompasses every entity engaged
in an economic activity, regardless of the legal
status of the entity and the way in which it is
financed and, secondly, that employment
procurement is an economic activity.
 The concept of undertaking:
positive aspect
• Corporations, partnerships, individuals, trade
associations, state-own corporations and
cooperatives engaging in an economic activity

Commercial context = economic profit

 The concept of undertaking:
negative aspect

• State authorities exercising public law powers

 Trilemma
• Anti-competitive agreements (Art. 101 TFEU)

• Abuse of dominant position (Art. 102 TFEU)

• Mergers (Merger Regulation and the

Implementing Regulation)
Anti-competitive agreements
(Art. 101 TFEU)
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in particular
those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Article 101(2) and (3) TFEU
2. Any agreements or decisions prohibited  pursuant to this Article shall be automatically
void.
 
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
 
— any agreement or category of agreements between undertakings,
 
— any decision or category of decisions by associations of undertakings,
 
— any concerted practice or category of concerted practices, which contributes to improving
the production or distribution of goods or to promoting technical or economic progress, while
allowing consumers a fair share of the resulting benefit, and which does not:
 
(a) impose on the undertakings concerned restrictions which are not indispensable to the
attainment of these objectives;
 
(b) afford such undertakings the possibility of eliminating competition in respect of a
substantial part of the products in question.
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in particular
those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Agreement
• The TFEU does not provide a definition.

• The EU court has taken a broad view.

• Agreement might be written or oral, formal or

informal, legally binding or not, with or
without sanctions
 Case 41/69 ACF Chemiefarma NV v
Commission
Informal agreements can be caught under Art.
101 TFEU and the fact that the parties claim to
have terminated them is not conclusive. The EU
court will examine the facts to determine
whether it was economically plausible that the
pricing behavior of the parties could have been
achieved in the absence of collusion.
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in particular
those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Between undertakings
• We need more than one undertaking to apply Art.
101 TFEU. If there are two undertakings Art. 101
TFEU applies. If there is one undertaking , then we
have intra-firm agreement to which Art. 101 TFEU
does not apply.

• The question of single economic entity

Subsidiaries
 Single economic entity
• Subsidiaries have independent legal
personality, but for the purposes of
competition law they may be treated as a
single economic entity along with the parent
company.
• Whether they constitute single economic
entity is a question of fact.
 Single economic entity
Considerations include:
• The number of shares the parent has in the
subsidiary
• The composition of the board of directors
• Whether the subsidiary carries out the
parent’s instructions.
• Case C-73/95 P, Parker Pen case
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices
which may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in particular
those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
Decisions by associations of undertakings

• The law Society of a Member State decides to

fix the remuneration for lawyers
• An agricultural association coordinate prices
on behalf of its members.
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in particular
those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Case 48/69 ICI v Commission
There can be a concerted practice even though
there is no actual plan between the parties. The
key idea is that each undertaking must operate
independently on the market.
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in particular
those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Case 56/65, Société La Technique Minière v.
Maschinenbau Ulm, 1966
“it must be possible to foresee with a sufficient
degree of probability on the basis of a set of
objective factors of law or of fact that the
agreement in question may have an influence,
direct or indirect, actual or potential, on the
pattern of trade between Member States."
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in
particular those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 object or effect
Case 56/65, Société La Technique Minière v.
Maschinenbau Ulm, 1966
• Either … or …

• Object = Certain agreements are by their very

nature injurious to normal competition: price-
fixing, market division, collective boycotts etc.
 effect
Case T‑328/03, O2 (Germany) GmbH & Co. OHG
v Commission, 2 May 2006

68. Moreover, in a case such as this, where it is accepted that the

agreement does not have as its object a restriction of competition, the
effects of the agreement should be considered and for it to be caught by
the prohibition it is necessary to find that those factors are present which
show that competition has in fact been prevented or restricted or
distorted to an appreciable extent. The competition in question must be
understood within the actual context in which it would occur in the
absence of the agreement in dispute; the interference with competition
may in particular be doubted if the agreement seems really necessary for
the penetration of a new area by an undertaking.
 effect
Case T‑328/03, O2 (Germany) GmbH & Co. OHG
v Commission, 2 May 2006
71.  The examination required in the light of
Article 81(1) EC consists essentially in taking
account of the impact of the agreement on
existing and potential competition … and the
competition situation in the absence of the
agreement ..., those two factors being intrinsically
linked.
 Article 101(1) TFEU
1.   with the internal market: all agreements
The following shall be prohibited as incompatible
between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the
prevention, restriction or distortion of competition within the internal market, and in particular
those which:
 
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
 
(b) limit or control production, markets, technical development, or investment;
 
(c) share markets or sources of supply;
 
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 
(e) make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Article 101(2) and (3) TFEU
2. Any agreements or decisions prohibited  pursuant to this Article shall be automatically
void.
 
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
 
— any agreement or category of agreements between undertakings,
 
— any decision or category of decisions by associations of undertakings,
 
— any concerted practice or category of concerted practices, which contributes to improving
the production or distribution of goods or to promoting technical or economic progress, while
allowing consumers a fair share of the resulting benefit, and which does not:
 
(a) impose on the undertakings concerned restrictions which are not indispensable to the
attainment of these objectives;
 
(b) afford such undertakings the possibility of eliminating competition in respect of a
substantial part of the products in question.
 Article 101(2) and (3) TFEU
  to this Article shall be automatically void.
2. Any agreements or decisions prohibited pursuant
 
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
 
— any agreement or category of agreements between undertakings,
 
— any decision or category of decisions by associations of undertakings,
 
— any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or

economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of
these objectives;
 
(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of
the products in question.
• Anti-competitive agreements (Art. 101 TFEU)

• Abuse of dominant position (Art. 102 TFEU)

• Mergers (Merger Regulation and the

Implementing Regulation)
Abuse of dominant position (Art. 102 TFEU)

• Rationale: monopoly power can lead to higher

prices and lower output than would exist under
normal competitive conditions.
• It is not the dominance that is penalised, but
the abuse thereof.
• There exists a wealth of case-law on the subject
• The application of Art. 102 TFEU involves a four-
stage analysis.
 Article 102
(ex Article 82 TEC)

Any abuse by one or more undertakings of a dominant position within the internal market or in a
substantial part of it shall be prohibited as incompatible with the internal market in so far as it
may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Stages of analysis

1.Undertaking
2.Relevant market
3.Dominance
4.Abuse
Undertaking
 Article 102
(ex Article 82 TEC)

Any abuse by one or more undertakings of a dominant position within the internal market
or in a substantial part of it shall be prohibited as incompatible with the internal market in so far
as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Case C-41/90, Klaus Höfner and Fritz Elser v
Macrotron GmbH, 23 April 1991
21. It must be observed, in the context of
competition law, first that the concept of an
undertaking encompasses every entity engaged
in an economic activity, regardless of the legal
status of the entity and the way in which it is
financed and, secondly, that employment
procurement is an economic activity.
Relevant market
 Article 102
(ex Article 82 TEC)

Any abuse by one or more undertakings of a dominant position within the internal
market or in a substantial part of it shall be prohibited as incompatible with
the internal market in so far as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Relevant market
1. The product market
2. The geographic market
3. The temporal factor
 The product market
The key concept:
interchangeability
(cross-elasticity, substitutability)
Demand side, Supply side
 The product market
• Case 27/76, United Brands Company and
United Brands Continentaal BV v Commission
of the European Communities (Chiquita
Bananas)
• Case 322/81, NV Nederlandsche Banden
Industrie Michelin v Commission of the
European Communities
 The geographic market
• Case 27/76, United Brands Company and
United Brands Continentaal BV v Commission
of the European Communities (Chiquita
Bananas)
 The temporal factor
• Seasonal products
Dominance
 Article 102
(ex Article 82 TEC)

Any abuse by one or more undertakings of a dominant position

within the internal market or in a substantial part of it shall be prohibited as incompatible with
the internal market in so far as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no
connection with the subject of such contracts.
 Dominance
1. Single firm dominance

2. Joint dominance
 Single firm dominance
• Case 27/76, United Brands Company and
United Brands Continentaal BV v Commission
of the European Communities (Chiquita
Bananas)
• Case 85/76, Hoffmann-La Roche
 Joint dominance
Joined cases C-395/96 P and C-396/96 P,
Compagnie maritime belge transports SA (C-
395/96 P), Compagnie maritime belge SA (C-
395/96 P) and Dafra-Lines A/S (C-396/96 P)
v Commission of the European Communities
Abuse
 Refusal to supply
Joined cases 6 and 7-73, Istituto Chemioterapico
Italiano S.p.A. and Commercial Solvents
Corporation v Commission of the European
Communities
 Predatory pricing
Case C-62/86, AKZO Chemie BV v Commission of
the European Communities
Many thanks for your kind
attention !!!