Class notes
Commercial Law and Practice LG07 D1
- Course
- Institution
Commercial Law and Practice LG07 D1
[Show more]
Seller
Followlaw-notes
Reviews received
Content preview
LEGAL PRACTICE COURSECommercial Law and Practice
Large Group 7
Topic(s):
Competition Law:
o Article 101 Treaty on the Functioning of the European Union
o Competition Act 1998 Chapter I prohibition
o Article 102 Treaty on the Functioning of the European Union
o Competition Act 1998 Chapter II prohibition
Learning Outcomes:
By the end of this session you will be able to:
identify how an agreement or activity may be subject to EU competition law, UK
competition law or both;
adopt a structured approach to analysing an agreement or activity, in order to identify
how it is affected by EU or UK competition law; and
provide advice as to the applicability of the Notice on Agreements of Minor
Importance (“NAOMI”) and the Vertical Restraints Block Exemption (“VRBE”)
Session Activities:
As set out in the session outline.
Materials Attached:
Session outline
Preparation for Session:
Read Chapter 28 of the Commercial manual.
Read the following provisions contained in the Appendix to the Commercial manual and
bring them with you to the session:
o Treaty on the Functioning of the European Union, Article 101 and Article 102
o Commission Regulation No. 330/2010 (VRBE)
o Commission Notice 2014/C 291/01 (NAOMI)
Post-Session:
Review your notes of the session in order to consolidate your understanding.
Debt finance of the module was commercial. It about looking at docs. Competition is all black
letter law so its technical.
docs_952468968.docx 1/18 © City, University of London 2020
, LEGAL PRACTICE COURSE
1. Introduction
In practice, if you had identified a competition law concern and spotted that issue you would
then obtain specialist legal advise from someone who exclusively practices in that area.
■ EU – Arts 101, 102 TFEU
■ UK – Chapters I and II, Competition Act 1998; Enterprise Act 2002
Chapter 1 and 2 of Competition Act 1998 are the UK versions of Art 101 & 102 – similar
Agreement for supply of goods and services may potentially infringe Competition law at
either EU or a UK level. Most commercial agreements would be considered under rules that
relate to Anti-competitive agreements.
We don’t cover other areas of competition law e.g. merger control focus is on only Art 101
& 102 TFEU and Chapter 1 and 2 of Competition Act 1998 + Enterprise Act 2002
2. Article 101 TFEU (see also the flowchart in the Appendix to this handout)
Go through the flowchart when you deal with art 101 and apply to set of facts that relate to
your client to try and reach a conclusion as to whether there is an issue under article 101
flowchart structures it very well [use this for exam]
2.1 The prohibition
Prohibition focuses on the “agreements 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”
Art 101 TFEU
Two or more undertakings
Agreement/decision/concerted practice. They have to go
agreements/decisions/concerted practices so it can be wider than just a written
agreement.
May affect trade between Member States. So for 101 to apply there has to be some
impact on trade between Member states. If the issue you’re looking at was entirely in
the UK then it wouldn’t be appropriate. If there is no impact on trade between
member states then you wouldn’t be looking at art 101 you would instead consider
chapter 1 of the CA 1998.
Object or effect … prevention, restriction or distortion of competition within the
internal market. So in order to analyse an agreement decision or practice you need to
go through those elements.
In analysing an agreement, decision or practice, ask:
2.1.1 Is it between two or more undertakings?
Any natural or legal person can be an undertaking for this purpose provided they are
engaged in economic or commercial activities. It doesn’t matter whether its for profit or not.
This includes companies, partnerships, sole traders, trade associations, state undertakings
and non-EU undertakings what an undertaking is is really broad.
You have to have 2 separate economic entities If you got an agreement between
companies in the same group of companies that is not caught as an undertaking because its
deemed to be 1 economic entity. so if you got an agreement between companies in the same
© City, University of London 2020 2/18 docs_952468968.docx
, LEGAL PRACTICE COURSE
group of companies that isn’t caught as an undertaking because its deemed to be 1
economic entity.
That’s different to what we talked about in BLP because we talked about companies in the
group being their own separate legal entities. For this purpose they are deemed to be 1
economic entity.
2.1.2 Is there an “agreement” or “decision” or “concerted practice to fall within art
101”?
Decisions of trade associations are caught. For example, the rules or constitution of a trade
association is sufficient to constitute a decision. Also it could include an exchange of info
between competitors such as market data, collusive tendering, joint purchasing, joint use of
standard terms and conditions of trade, agreements on industry standards. Non legally
binding aka gentleman’s agreement can also be caught. So whether there is a decision
agreement or concerted practice is very wide. Its not just an agreement so a piece of paper
between 2 undertakings it could be much broader than that.
2.1.3 Is it correct to say that it “may affect trade on Member States”?
Another factor you would consider when trying to work out whether art 101 applies. So does
it affect trade between member states (MS). So this can be the case even if all the parties
are located in 1 MS.
It could also affect trade between MS if the activity is outside MS.
Wood Pulp 2 [1998] case in which number of wood pulp producers in the US, Canada and
Scandinavia operated a pricing cartel, that affected imports into the EU and as such it
affected trade between MS even though all the people involved were outside of MS.
You don’t need to quote case references for the exam.
European Commission set out in its effect on Trade Guidelines details of agreements which
in principle wont affect trade between MS. That gives us some guidance as to what might
constitute trade between MS. Commission has said that if the agreement falls within the
effect on trade guidelines, they do not think its is capable of appreciably affecting trade. The
test is that there is a combined share of market parties of less than 5% AND if it’s a
horizontal agreement.
AND is crucial as it has to be both parts in order not to appreciably effect trade
Horizontal agreements are people involved at the same level of the chain. So all distributors
or all retailers. The combined turnover of the parties in the EU is below 40million euros or if
its vertical, they just look at the sellers turnover being below 40 mill euros (has to be both of
those factors). If both of those factors apply its then possible to say under the effect of trade
guidelines there isn’t an appreciable effect on trade. Therefore art 101 will not apply – if you
come to that conclusion you need to get specialist advice.
Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty,
Commission Notice [2004] OJ C101/81 (the “Effect on Trade Guidelines”):
Commission regards agreement as “not capable of appreciably affecting trade” if:
combined market share of parties to agreement is less than 5%; and
(i) if a horizontal agreement, combined turnover of parties in EU is below 40 million
euros or (ii) if a vertical agreement, seller’s turnover is below 40 million euros.
docs_952468968.docx 3/18 © City, University of London 2020
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller law-notes. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.89. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now