EUCL: Summary.
Week 1: Introduction.
Competition: process of rivalry between companies → companies act so
that customers buy from them rather than from other companies.
Competition law promotes or seeks to
maintain market competition by
regulating anti-competitive conduct by
companies.
Goals of competition law:
- Protect competition in order to:
o Maximize consumer welfare.
Different from protection of consumers’ interests
(GlaxoSmithKline).
This is a classic foal of consumer law rather than
competition law.
It does entail:
Allocative efficiency → goods and services are
allocated in the best possible way on the basis of
prices consumers want to pay.
Productive efficiency → goods and services are
produced at lowest cost possible.
Dynamic efficiency → research and development
to improve products.
o Establish the internal market.
Usually the Union cares about the internal market more than
the consumers itself.
May also be good for consumers.
o The competition process (GlaxoSmithKline).
Aim of competition law eventually is to ensure equal
opportunities.
Practices must be efficient and fair.
The interest of competitors themselves.
It is in the interest of an average, circumspect market
operator that competition is not restricted.
o Fundamental rights and significant values (Roquette Frères;
TeliaSonera; CK Telecoms UK Investments).
- Sometimes less competition may be better.
May have good social outcomes when one dominances the market.
The substantive rules on competition:
a. Those addressed to actors in the markets.
, o Prohibition of agreements and practices restricting
competition (Art. 101 TFEU).
o Prohibition on abuse of dominant position (Art. 102 TFEU).
o Prohibition on concentrations distorting competition (Merger
Control Regulation).
b. Those addressed to states.
o Prohibition on state aid distorting competition (Art. 107
TFEU).
o Prohibition on anti-competitive measures taken by the state
with regard to specific undertaking (Art. 106(1) TFEU).
Procedural rules on competition:
- The Commission can carry out investigations and impose sanctions
→ centralized enforcement.
o Decisions may be appealed against before the GC (Art. 263
TFEU); higher appeal may occur before the CJEU.
Right to an effective remedy and fair trial (cf. Art. 6
ECHR and Art. 47 Charter).
- National Competition Authorities (NCA) can do so (Art. 5 R1/2003)
→ decentralized.
Can be deducted from the direct effect from Art. 101(1)(3) and
102 TFEU.
o For both national and European competition law (Art. 35
R1/2003).
Subject to judicial review (cf. Art. 6 ECHR; Art. 47 i.c.w.
51 Charter).
Possibility of preliminary questions (Art. 267 TFEU).
In relation to competition law → private enforcement is a possibility.
This consists of two components:
a. Nullity of agreements.
b. Damage claims (Courage v. Crehan).
This can only take place at the national level as it is horizontal
relationships.
Some significant concepts in competition law are:
- Undertaking.
Every entity engaged in economic activities is an undertaking
within the meaning of European competition law (Höfner).
o Offering of goods and services.
o Limits to this concept.
Exercise of official authority does not amount to
economic activity.
Activities typical for the public domain.
, o Not when governmental entities act in
commercial capacity.
Social security.
Depends on the design of the social security system
concerned whether the bodies managing this system are
engaged in economic activities and qualify as
undertakings.
Must be primarily based on solidarity;
And subject to substantial state control.
Education.
Predominantly financed by the state;
And not engaged in an economic activity.
o Comes down to following test if competition law applies:
Supply of goods or services is mainly dependent on
public funding;
Aim of this funding is the pursuit of a public interest
goal;
The activities under review are closely related to this
goal.
o All subsidiaries and parent companies are considered as one
undertaking → form an economic unit.
Internal agreements do not fall within the scope of
competition law.
If one subsidiary violated competition law, it also affects
the other subsidiaries.
- Market definition.
One could only argue practices of firms are harmful for competition
if the special characteristics of a given market are identified.
o On the basis of product / service: the relevant product
market.
The criterion of substitution must be applied.
The features and the intended use of the products
concerned (United Brands).
Demand substitution:
Product may be replaced by another product from
the perspective of the consumer.
Supply substitution:
Whether suppliers are able to switch production.
Small but significant nontransitory increase in
price (SSNIP).
If a relatively small change of price for a product
determines the consumer to switch to another product,
these belong to the same market.
Week 1: Introduction.
Competition: process of rivalry between companies → companies act so
that customers buy from them rather than from other companies.
Competition law promotes or seeks to
maintain market competition by
regulating anti-competitive conduct by
companies.
Goals of competition law:
- Protect competition in order to:
o Maximize consumer welfare.
Different from protection of consumers’ interests
(GlaxoSmithKline).
This is a classic foal of consumer law rather than
competition law.
It does entail:
Allocative efficiency → goods and services are
allocated in the best possible way on the basis of
prices consumers want to pay.
Productive efficiency → goods and services are
produced at lowest cost possible.
Dynamic efficiency → research and development
to improve products.
o Establish the internal market.
Usually the Union cares about the internal market more than
the consumers itself.
May also be good for consumers.
o The competition process (GlaxoSmithKline).
Aim of competition law eventually is to ensure equal
opportunities.
Practices must be efficient and fair.
The interest of competitors themselves.
It is in the interest of an average, circumspect market
operator that competition is not restricted.
o Fundamental rights and significant values (Roquette Frères;
TeliaSonera; CK Telecoms UK Investments).
- Sometimes less competition may be better.
May have good social outcomes when one dominances the market.
The substantive rules on competition:
a. Those addressed to actors in the markets.
, o Prohibition of agreements and practices restricting
competition (Art. 101 TFEU).
o Prohibition on abuse of dominant position (Art. 102 TFEU).
o Prohibition on concentrations distorting competition (Merger
Control Regulation).
b. Those addressed to states.
o Prohibition on state aid distorting competition (Art. 107
TFEU).
o Prohibition on anti-competitive measures taken by the state
with regard to specific undertaking (Art. 106(1) TFEU).
Procedural rules on competition:
- The Commission can carry out investigations and impose sanctions
→ centralized enforcement.
o Decisions may be appealed against before the GC (Art. 263
TFEU); higher appeal may occur before the CJEU.
Right to an effective remedy and fair trial (cf. Art. 6
ECHR and Art. 47 Charter).
- National Competition Authorities (NCA) can do so (Art. 5 R1/2003)
→ decentralized.
Can be deducted from the direct effect from Art. 101(1)(3) and
102 TFEU.
o For both national and European competition law (Art. 35
R1/2003).
Subject to judicial review (cf. Art. 6 ECHR; Art. 47 i.c.w.
51 Charter).
Possibility of preliminary questions (Art. 267 TFEU).
In relation to competition law → private enforcement is a possibility.
This consists of two components:
a. Nullity of agreements.
b. Damage claims (Courage v. Crehan).
This can only take place at the national level as it is horizontal
relationships.
Some significant concepts in competition law are:
- Undertaking.
Every entity engaged in economic activities is an undertaking
within the meaning of European competition law (Höfner).
o Offering of goods and services.
o Limits to this concept.
Exercise of official authority does not amount to
economic activity.
Activities typical for the public domain.
, o Not when governmental entities act in
commercial capacity.
Social security.
Depends on the design of the social security system
concerned whether the bodies managing this system are
engaged in economic activities and qualify as
undertakings.
Must be primarily based on solidarity;
And subject to substantial state control.
Education.
Predominantly financed by the state;
And not engaged in an economic activity.
o Comes down to following test if competition law applies:
Supply of goods or services is mainly dependent on
public funding;
Aim of this funding is the pursuit of a public interest
goal;
The activities under review are closely related to this
goal.
o All subsidiaries and parent companies are considered as one
undertaking → form an economic unit.
Internal agreements do not fall within the scope of
competition law.
If one subsidiary violated competition law, it also affects
the other subsidiaries.
- Market definition.
One could only argue practices of firms are harmful for competition
if the special characteristics of a given market are identified.
o On the basis of product / service: the relevant product
market.
The criterion of substitution must be applied.
The features and the intended use of the products
concerned (United Brands).
Demand substitution:
Product may be replaced by another product from
the perspective of the consumer.
Supply substitution:
Whether suppliers are able to switch production.
Small but significant nontransitory increase in
price (SSNIP).
If a relatively small change of price for a product
determines the consumer to switch to another product,
these belong to the same market.
