Lecture Week 6
Arti cle 101 TFEU- cartel prohibiti on
Competition law
Note the renumbering:
Background and objectives of Competition Law
Background
Rules on the internal market
- Free movement rules -> aimed at member states
- Competition rules -> aimed at undertakings & aimed (sometimes) at member states
in relations with undertakings
Zooming in on competition law
- Provisions for undertakings:
o Cartel prohibition
o Prohibition on abuse of dominance
o Merger control
- Provisions for member states in relation to undertakings: (not dealt with in this
course)
o Undertakings with entrusted tasks
o State-aid
Objectives of European competition law
- Consumer welfare: commission’s economic approach
o The commission’s law is aimed making consumer welfare as big as possible
o Placed at the heart of why we have competition law.
- Structure of competition: Court: (also) process/structure of competition
o In the case law of the Court we see other objectives;
Efficiencies/total welfare: efficiencies only -> consumer welfare
standard (not: total welfare)
Internal market: Court: no barriers between member states
Non-economic objectives: Commission: no; academic discussion,
position Court unclear
, Four recurring examples
1. ‘EU Slaps Fines on Car, Truck Bearings Makers’
a. Coordination of passing-on of steel price increases to customers, collusion on
Requests for Quotations, exchange of commercially sensitive information
2. ‘Whiter than white? EU fines washing powder cartel’
a. EU fines washing powder cartel -> price-fixing
3. “Heineken, Grolsch and Bavaria operated a cartel on the beer market in the
Netherlands”
4. Pierre Fabre’s requirement’s ‘a pharmacist needs to be physically present’ means
internet sales’ restriction. In a selective distribution network this is a prohibited
restriction of competition.
Cartel prohibition
Article 101 TFEU
Elements of article 101(1) TFEU
1. Undertaking
- Case Höfner
o Entity engaged in economic activity
o Economic activity: providing goods or services on the market
- Examples:
o Heineken, Grolsch and Bavaria are undertakings
o Ball bearings cartel: manufacturers, so undertakings
o Washing powder: undertaking
o Pierre Fabre: undertaking
2. Some form of multilateral conduct
- Agreement: concurrence of wills (wilsovereenkomst) (Bayer case)
- Concerted practice (onderling afgestemde feitelijke gedragingen): form of co-
ordination between undertakings, which knowingly substitutes practical co-operation
between them for the risks of competition (ICI-case)
- Decision of association of undertakings
o Organized groups, membership, will to coordinate members’ action
o E.g. decision by Bar of the Netherlands (Wouters case)
- Examples
o Beer-cartel: agreement -> concurrence of wills
o Ball-bearings call: partly agreement, partly concerted practice
o Washing powder: agreement
o Pierre Fabre: agreement -> concurrence of wills
3. Appreciable restriction of competition
- Central economic/legal question
o How could competition have developed without conduct?
o What is the impact on competitive parameters (price, output, quality,
innovation)?
- Important economic distinction between
o Horizontal agreements: same place in chain of production; competitors
o Vertical agreements: different places in chain of production
- Another important economic distinction between:
Arti cle 101 TFEU- cartel prohibiti on
Competition law
Note the renumbering:
Background and objectives of Competition Law
Background
Rules on the internal market
- Free movement rules -> aimed at member states
- Competition rules -> aimed at undertakings & aimed (sometimes) at member states
in relations with undertakings
Zooming in on competition law
- Provisions for undertakings:
o Cartel prohibition
o Prohibition on abuse of dominance
o Merger control
- Provisions for member states in relation to undertakings: (not dealt with in this
course)
o Undertakings with entrusted tasks
o State-aid
Objectives of European competition law
- Consumer welfare: commission’s economic approach
o The commission’s law is aimed making consumer welfare as big as possible
o Placed at the heart of why we have competition law.
- Structure of competition: Court: (also) process/structure of competition
o In the case law of the Court we see other objectives;
Efficiencies/total welfare: efficiencies only -> consumer welfare
standard (not: total welfare)
Internal market: Court: no barriers between member states
Non-economic objectives: Commission: no; academic discussion,
position Court unclear
, Four recurring examples
1. ‘EU Slaps Fines on Car, Truck Bearings Makers’
a. Coordination of passing-on of steel price increases to customers, collusion on
Requests for Quotations, exchange of commercially sensitive information
2. ‘Whiter than white? EU fines washing powder cartel’
a. EU fines washing powder cartel -> price-fixing
3. “Heineken, Grolsch and Bavaria operated a cartel on the beer market in the
Netherlands”
4. Pierre Fabre’s requirement’s ‘a pharmacist needs to be physically present’ means
internet sales’ restriction. In a selective distribution network this is a prohibited
restriction of competition.
Cartel prohibition
Article 101 TFEU
Elements of article 101(1) TFEU
1. Undertaking
- Case Höfner
o Entity engaged in economic activity
o Economic activity: providing goods or services on the market
- Examples:
o Heineken, Grolsch and Bavaria are undertakings
o Ball bearings cartel: manufacturers, so undertakings
o Washing powder: undertaking
o Pierre Fabre: undertaking
2. Some form of multilateral conduct
- Agreement: concurrence of wills (wilsovereenkomst) (Bayer case)
- Concerted practice (onderling afgestemde feitelijke gedragingen): form of co-
ordination between undertakings, which knowingly substitutes practical co-operation
between them for the risks of competition (ICI-case)
- Decision of association of undertakings
o Organized groups, membership, will to coordinate members’ action
o E.g. decision by Bar of the Netherlands (Wouters case)
- Examples
o Beer-cartel: agreement -> concurrence of wills
o Ball-bearings call: partly agreement, partly concerted practice
o Washing powder: agreement
o Pierre Fabre: agreement -> concurrence of wills
3. Appreciable restriction of competition
- Central economic/legal question
o How could competition have developed without conduct?
o What is the impact on competitive parameters (price, output, quality,
innovation)?
- Important economic distinction between
o Horizontal agreements: same place in chain of production; competitors
o Vertical agreements: different places in chain of production
- Another important economic distinction between:
