Law & Ethics 3 Summary
Law: Recap Law & Ethics 1 + Ch 7 + 10 +12 +14
International Law and Business – A Global Introduction by Bart Wernaart + Lecture Notes
Ethics: Recap Law & Ethics 1 + Lecture Notes
Chapter 7: European Union and Competition Law
What is Competition Law?
a set of norms which prevent monopolies and maintain fair competition at the market
Why Competition Law?
a lack of competition and monopolies present a danger to the market, in particular to the EU single
market
What Competition Law Does?
prohibits companies to enter into agreements limiting competition
prevents very big companies from abusing their position
prevents governments from distorting the competition
prevents monopolies from occurring through merger control
recognizes the necessity of some monopolies
Sources of EU competition law
TFEU: 101 – 109 TFEU an protocol NO 27 on the internal market and competition
The merger regulation
European Commission delegated acts and soft law
The ECJ case law which forms the core of the competition law beyond the TFEU rules
7.1 – Economic integration in Europe
After WW2 economic integration is key to lasting peace.
Not all EU members are a part of the monetary union. The European Union is characterized by its
supranational law and organization. The EU legislative bodies and the European court of justice have
played a profound role in the forming in European law; a field of law in its own right that is applicable in
the domestic legal orders of its member states
The fact that European law is supranational means two things
it is directly applicable in its member states
it is superior to domestic laws, when domestic law is not in compliance with European law the
domestic law may not be applied
Regulation legislation that applies within the European Union without the interference of national
parliaments. They have a binding legal force throughout every member state.
Directive a legislation in which a certain goal or principle is adopted that should be implemented by
the EU Member States the way that they see fit
Decision legislation that only applies to an individual case e.g. fining a company for not keeping up
with the rules of the European Union.
7.2 Free trade under the EU
The 4 freedoms
1. Freedom of goods
Based on two concepts: a ban on all fiscal restriction + the elimination of all quantitative restrictions to
trade goods.
Article 30 TFEU: any charges at some point related to the fact that a product crosses a border
between EU member states is illegal
Article 34+35 TFEU: prohibits quantitative restrictions on imports and exports e.g. quotas
Article 36 TFEU: quantitative restrictions to trade may be justified under the right conditions.
Article 110 TFEU: forbids discrimination of foreign products through national taxation such as value
added tax or excise duties.
, 2. Free movement of persons
The general idea here is that free movement of persons contributes to the establishment of a free
market economy. After all, one needs workers and self-employed people to produce and sell goods.
All citizens of an European Union member state automatically can enjoy the right to move freely within
the territory of the member states.
Schengen countries removed all border control at common borders. There are EU countries that
are not a Schengen country and Schengen countries that are not a part of the EY.
TFEU 45 free movement of workers
TFEU 49 free movement of self-employed + freedom of establishment.
3. Free movement of services
Here there is no permanent establishment involved. One does simply cross the border to perform a
service.
TFEU 56 stipulates the freedom to provide and receive services in the EU. Here the court has ruled
that direct and indirect barriers to providing of services is prohibited, as well as hindering of services
providing in general.
4. Free movement of capital
The financing if economic activity is not restricted to country borders. Monetary policies are
automatically harmonized due to the centralized organization of the Euro.
7.2.3 – Competition Law
An undertaking is an entity engaged in an economic activity, that is, an activity consisting of offering
goods or services on a given market, regardless of its legal stats and the way in which it is financed.
No intention to gain profits is required
TFEU 101 prohibition of cartels, these are usually agreements or practices that have as affect the
distortion of fair competition.
Examples of the distortion of fair competition are
the fixing of purchase or selling prices
the limitation or control of production, markets, technical development, or investment to only a
few
the sharing of markets or sources of supply
applying dissimilar conditions to the same transactions with other trading parties, thereby
placing them at a competitive disadvantage
forcing the other party to accept contractual terms with obligations that are not related to the
actual contract
After this the form of a cartel needs to be specified usually this is an agreement that the parties
mutually agreed on. It needs to be proven that at some point the involved parties willingly gave
their consent to distorting the market and the fair competition on the market. The forming of a
cartel is not always easy to prove because the involved parties will try to rid the evidence.
In assessing whether TFEU 101 is violated consider the result and consequences of the behavior
rather than the intension.
All entities in society that at some point employ in economic activity have to act in compliance with
article 101 TFEU.
There are some exemptions to the prohibition of cartels, the commission may exempt certain
individual cartel agreements when they fulfil ALL the following criteria
Improve the production or distribution of goods or contribute to technical or economic progress
It benefits the consumer
The cartel must be indispensable to realize the intended goals
The cartel must not distort competition substantially
Law: Recap Law & Ethics 1 + Ch 7 + 10 +12 +14
International Law and Business – A Global Introduction by Bart Wernaart + Lecture Notes
Ethics: Recap Law & Ethics 1 + Lecture Notes
Chapter 7: European Union and Competition Law
What is Competition Law?
a set of norms which prevent monopolies and maintain fair competition at the market
Why Competition Law?
a lack of competition and monopolies present a danger to the market, in particular to the EU single
market
What Competition Law Does?
prohibits companies to enter into agreements limiting competition
prevents very big companies from abusing their position
prevents governments from distorting the competition
prevents monopolies from occurring through merger control
recognizes the necessity of some monopolies
Sources of EU competition law
TFEU: 101 – 109 TFEU an protocol NO 27 on the internal market and competition
The merger regulation
European Commission delegated acts and soft law
The ECJ case law which forms the core of the competition law beyond the TFEU rules
7.1 – Economic integration in Europe
After WW2 economic integration is key to lasting peace.
Not all EU members are a part of the monetary union. The European Union is characterized by its
supranational law and organization. The EU legislative bodies and the European court of justice have
played a profound role in the forming in European law; a field of law in its own right that is applicable in
the domestic legal orders of its member states
The fact that European law is supranational means two things
it is directly applicable in its member states
it is superior to domestic laws, when domestic law is not in compliance with European law the
domestic law may not be applied
Regulation legislation that applies within the European Union without the interference of national
parliaments. They have a binding legal force throughout every member state.
Directive a legislation in which a certain goal or principle is adopted that should be implemented by
the EU Member States the way that they see fit
Decision legislation that only applies to an individual case e.g. fining a company for not keeping up
with the rules of the European Union.
7.2 Free trade under the EU
The 4 freedoms
1. Freedom of goods
Based on two concepts: a ban on all fiscal restriction + the elimination of all quantitative restrictions to
trade goods.
Article 30 TFEU: any charges at some point related to the fact that a product crosses a border
between EU member states is illegal
Article 34+35 TFEU: prohibits quantitative restrictions on imports and exports e.g. quotas
Article 36 TFEU: quantitative restrictions to trade may be justified under the right conditions.
Article 110 TFEU: forbids discrimination of foreign products through national taxation such as value
added tax or excise duties.
, 2. Free movement of persons
The general idea here is that free movement of persons contributes to the establishment of a free
market economy. After all, one needs workers and self-employed people to produce and sell goods.
All citizens of an European Union member state automatically can enjoy the right to move freely within
the territory of the member states.
Schengen countries removed all border control at common borders. There are EU countries that
are not a Schengen country and Schengen countries that are not a part of the EY.
TFEU 45 free movement of workers
TFEU 49 free movement of self-employed + freedom of establishment.
3. Free movement of services
Here there is no permanent establishment involved. One does simply cross the border to perform a
service.
TFEU 56 stipulates the freedom to provide and receive services in the EU. Here the court has ruled
that direct and indirect barriers to providing of services is prohibited, as well as hindering of services
providing in general.
4. Free movement of capital
The financing if economic activity is not restricted to country borders. Monetary policies are
automatically harmonized due to the centralized organization of the Euro.
7.2.3 – Competition Law
An undertaking is an entity engaged in an economic activity, that is, an activity consisting of offering
goods or services on a given market, regardless of its legal stats and the way in which it is financed.
No intention to gain profits is required
TFEU 101 prohibition of cartels, these are usually agreements or practices that have as affect the
distortion of fair competition.
Examples of the distortion of fair competition are
the fixing of purchase or selling prices
the limitation or control of production, markets, technical development, or investment to only a
few
the sharing of markets or sources of supply
applying dissimilar conditions to the same transactions with other trading parties, thereby
placing them at a competitive disadvantage
forcing the other party to accept contractual terms with obligations that are not related to the
actual contract
After this the form of a cartel needs to be specified usually this is an agreement that the parties
mutually agreed on. It needs to be proven that at some point the involved parties willingly gave
their consent to distorting the market and the fair competition on the market. The forming of a
cartel is not always easy to prove because the involved parties will try to rid the evidence.
In assessing whether TFEU 101 is violated consider the result and consequences of the behavior
rather than the intension.
All entities in society that at some point employ in economic activity have to act in compliance with
article 101 TFEU.
There are some exemptions to the prohibition of cartels, the commission may exempt certain
individual cartel agreements when they fulfil ALL the following criteria
Improve the production or distribution of goods or contribute to technical or economic progress
It benefits the consumer
The cartel must be indispensable to realize the intended goals
The cartel must not distort competition substantially
