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Self test en study cases.Self-study week 1
1. Is control of mergers necessary in the internal market? Why?
If you believe in the free market idea and the ability of competition, then yes, it is necessary to control mergers
in the internal market. This is because big companies which merge can disturb the balance of the free market,
making space for a monopoly. Small mergers are mostly not that harmful, it is the big mergers that should be
controlled.
Well, control of mergers, one of the five pillars of EU competition law. Would be nice if it were necessary
because otherwise we have a redundant branch of competition or that is certainly not the case, it is necessary.
It is, as we said the preemptive parents have 102. So the reasoning is let us not wait for an abuse of dominance
to happen. But let us preempt any abuse of dominance by checking all cases of artificial growth on the markets.
What is artificial growth? It is growing, not because you are the best But growing because you take over
another company you merge you launch public takeover bits, etc. So, that is why we need merge of control.
Good. We do it without a merger regulation that will be the topic for in two weeks, and perhaps we could work
on the basis of 101 or 102, but that is a very second best option. It's much better to have a full fledged
merchant regulation.
So how is the interplay between that merger regulation and articles 111 or two. The answer is the Merger
Regulation is a priori control before they get together and 101/102 ex post. So you will use 102 ex post, you will
say, well, you are engaging engaging in an abuse of dominant position. So is it possible that the Commission
would first approve emergent and then one month later, say, now you are abusing your dominant position.
Yes, that is possible. Will it happen in practice? Well, it will not happen after one month, but it can happen after
a year. The Facebook WhatsApp merger, which was first approved and then sometime later, the Commission
imposed a fine, under the merger regulation itself. Sothat is possible and, in my view, it is notproblematic
because the to have different aims. One is to check beforehand with all the knowledge you have on that
particular moment. And the other one is looking at behavior. Once the entities are effectively merged.
What is more problematic is another form of interplay. And that is that actually, that you and I don't have to
respect the Merger Regulation. We can say the merger, the Commission approved this merger, but we will use
the directly applicable articles 101 or 102 to our national judge and say national judge this merger in itself.Is an
abuse of dominance, or this merger because the merger is an agreement. It's an agreement is a sale and
purchase agreements disagreements is restrictive of competition and I want you national judge to stop it. Is
that possible, in theory it is? Why because 101 or 102 are higher in the hierarchy of norms, then the manager
regulation, which is only secondary legislation so nobody in a merger regulation can take away from us, the
rights to invoke 111 or two before our national judge.In practice, fortunately it rarely happens. And when it
happens. The NCAA national competition authorities or the national judges have the tendency to reject it and
to say, Yeah, but, well this was already controlled by the Commission and we respect that commission decision,
but it remains possible. There is nothingwhich can take away that right from us. So, that is a very problematic
interplay between 111 or two on the one hand and the merger integration.
2. How are the respective competencies of the CJ and GC regulated in
competition cases?
Actions for annulment of Commission decisions in competition cases are brought in the first instance before
the General Court. The General Court muss assess the legality of decisions according to the provisions of the
TFEU. The Court of Justice hears appeals from the General Court on points of law only. The Court also deals
with points of law referred to it by national courts under art. 267 TFEU.
Member States who in the past, had the so called privilege of going directly to the Court of Justice nowadays
also appear in competition cases before the general courts first. So what are the certainties when it comes to
the division of competencies between the General Court, and the Court of Justice.
, In a so called direct action, which is an action for a annulmenr, for example of a Commission decision.
Everyone Member States or natural person or company. We all go in first instance to the general
courts and on appeal to the Court of Justice.
And the Court of Justice on abuse can only rule on issues of law, not on the facts.
All the preliminary ruling questions still are before the Court of Justice.
The EU legal order and the national legal order respect each other.So if I have a decision of my national
competition authority which I do not like I will fight it within my national legal order.Similarly, you may read in
the newspaper, the Court of Justice has invalidated this or that national law. Well, it's not true.Because the
Court of Justice doesn't do that the Court of Justice, may at the maximum see a national law, like the one and
then it describes yours, is illegal, but it will not directly invalidate the national act. These are two distinct legal
orders which respect each other. So, as you rightly indicate if the Commission adopts a decision. Yeah, it's
illegal or so I fight it before an EU chords in first instance general course.
3. Read Article 173 TFEU. Some commentators read a danger for
politicisation of the EU's competition policy in this provision. Why? Do you
agree with their point of view? What is the relation between competition
policy and industrial policy?
“1. The Union and the Member States shall ensure that the conditions necessary for the competitiveness of the
Union's industry exist.
For that purpose, in accordance with a system of open and competitive markets, their action shall be aimed at:-
speeding up the adjustment of industry to structural changes,- encouraging an environment favourable to
initiative and to the development of undertakings throughout the Union, particularly small and medium-sized
undertakings,- encouraging an environment favourable to cooperation between undertakings,- fostering better
exploitation of the industrial potential of policies of innovation, research and technological development.
2. The Member States shall consult each other in liaison with the Commission and, where necessary, shall
coordinate their action. The Commission may take any useful initiative to promote such coordination, in
particular initiatives aiming at the establishment of guidelines and indicators, the organisation of exchange of
best practice, and the preparation of the necessary elements for periodic monitoring and evaluation. The
European Parliament shall be kept fully informed.
3. The Union shall contribute to the achievement of the objectives set out in paragraph 1 through the policies
and activities it pursues under other provisions of the Treaties. The European Parliament and the Council, acting
in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee,
may decide on specific measures in support of action taken in the Member States to achieve the objectives set
out in paragraph 1, excluding any harmonisation of the laws and regulations of the Member States.
This Title shall not provide a basis for the introduction by the Union of any measure which could lead to a
distortion of competition or contains tax provisions or provisions relating to the rights and interests of employed
persons.”
They probably read that in this provision since it speaks of Member States consulting each other.
This is the industrial policy that we already referred to during the first meeting there is a tension between
competition policy, on the one hand and Industrial Policy, on the other.
4. Read Article 179 TFEU. Would you agree that the relationship between
this provision and European competition law is rather tense?
“1. The Union shall have the objective of strengthening its scientific and technological bases by achieving a
European research area in which researchers, scientific knowledge and technology circulate freely, and
encouraging it to become more competitive, including in its industry, while promoting all the research activities
deemed necessary by virtue of other Chapters of the Treaties.
2. For this purpose the Union shall, throughout the Union, encourage undertakings, including small and
medium-sized undertakings, research centres and universities in their research and technological development
activities of high quality; it shall support their efforts to cooperate with one another, aiming, notably, at
permitting researchers to cooperate freely across borders and at enabling undertakings to exploit the internal
,market potential to the full, in particular through the opening-up of national public contracts, the definition of
common standards and the removal of legal and fiscal obstacles to that cooperation.
3. All Union activities under the Treaties in the area of research and technological development, including
demonstration projects, shall be decided on and implemented in accordance with the provisions of this Title.”
It is rather tense, since the provision states that ‘The Union shall support the efforts of undertakings to
cooperate with one another, aiming, notably, at permitting researchers to cooperate freely across borders and
at enabling undertakings to exploit the internal market potential to the full, in particular through the opening-
up of national public contracts, the definition of common standards and the removal of legal and fiscal
obstacles to that cooperation’. From the other point of view, it also speaks of making the European research
area more competitive, which would mean this provision also encourages competition and there is no tense
relationship between this provision and European competition law
There is a tension between, Competition law and policy, on the one hand and research and development on
the other. What is that tension. Well, the tension is double
First of all, there is a risk that if you want to promote industrial policy. Think of the big merger
cases, creating national champions, or even European like Champion Siemens Alstom.
o There is a risk of collusion. In order to reach an industrial policy aim.
o What will we do, we will make we will allow companies to work together. And if you
allow companies to work together, you have a cartel agreements, so that is the first
tension.
o Similarly, if you want to promote research and development into a vaccine against covert
19 you may be tempted to say the big companies, please join forces so that you're not all
doing the same work over and over again.And that will be promoting a cartel agreement
so that is the first danger.
And then the second danger is stated. You may be inclined to give state it to allow state it to be
given by Member States. So these are the two tensions which indeed exist.
And the danger of politicization we already discussed it yeah industrial policy is very much linked to politics.
What do we, what do our politicians see as major projects major infrastructure projects, or other projects that
have to be promoted. So there is indeed this this danger.
What is the relation between competition policy and industrial policy. If you read the article it very soon
becomes clear that there is a hierarchy where competition policy is on top. Why, because if you look at the
third paragraph, you read at the end. This title shall not provide basis for the introduction by the Union of any
measure which could lead to a distortion of competition so competition takes precedence over this article so
there is not really a conflict. The conflict is solved by the hierarchy of norms, however there is an implicit
tension.
Research andDevelop development. If you read the article you see that the the competence of the Union is
rather limited it is framed in terms of we shall support, we shall contribute. It is not framed as in terms of we
have exclusive competence to deal with this. So there you have a similar precedence for competition law. The
Union has for European competition law exclusive competence, over research and development provisions. So
there is an inherent tension, but it is not a legal conflict of norms, because we have a hierarchy between norms.
5. What has the Lisbon Treaty changed in the competition law field?
It has changed, mainly one thing and not necessarily for the better. It has removed competition from the
beginning of the first articles of the TF EU to a protocol.Since the establishment of the EC competition was right
up there with other instruments to promotes values of the EU, but now it is gone. It is in a protocol and this is
said to be the result of the lobbying of big French companies from a legal point of view, we don't care too much
because as you know protocols have the same legal value as the Treaty provisions themselves, but this rather
symbolic.Especially if you compare it to the Maastricht treaty were, much more attention was given to
competition throughout the tree Lisbon kind of done. Does that we are in a time as you know where we speak
less about in the Treaty less about competition and more about services of general interests.
, 6. Is the EU's competition policy an instrument of positive or of negative
integration?
An instrument of positive integration. Legislation is being published, investigations are started, restrictions are
being forced.
Is the EU competition policy, an instrument of positive or negative integration, when we discussed the goals of
competition law one specific goal for the EU competition Law is to promote the internal markets and the
question then is how this competition policy in competition law promotes the internal markets by harmonizing,
unifying, diverging national rules or by prohibiting certain behavior.
We mainly prohibit, it's negative integration we integrate by prohibiting certain actions, rather than that we
harmonize positive integration. That is not absolute. We have some very important harmonizing instruments
for example the private enforcement directive. But the focus is on the negative integration.
7. Why are there specific rules on competition with regard to agriculture
and transport?
These are very specific markets.
It's it's a historic thing. Agricultural transport were our first two common policies in the beginning and
agriculture and transport were to specifically dealt with common policies and that has remained up to today.
So they still have their own and partially deviating from general competition law rules.
They are not excluded sectors, because the same competition law principles that we apply to other sectors are
also applied in these sectors, however, they do have their own rules and these rules may, to a certain extent,
deviate from the rules we know in other sectors. You see that part of the special rules are vanishing because
when new instruments are adopted, sometimes the spaces specific rules for agriculture and transport are
simply abolished, and they are integrated in the overall competition laws.
8. What is the relationship between competition policy and the four
fundamental freedoms?
The four fundamental freedoms are there to achieve the goal of the single market, whereby the competition
policy of the EU is there to also achieve this goal and protect the four freedoms.
In real life in your real life cases you will notice that many cases deal with bothCompetition law and internal
market law. Internal market law = the four freedoms, free movement of goods, persons, services and capital.
What is the difference between internal market law and competition law In theory it is really simple
internal market law regulates Member State behavior and competition law regulates the behavior of
undertakings.
If you look at the free movement provisions in the Treaty, they are in there for Member States
Member States shall not discriminate Member States shall not restrict.
So the big divider is intermarket law for members to behavior competition law for undertakings,
• However, the two are gradually converting.
o We start to apply the four freedoms to the behavior of individuals and we call that horizontal
direct effects of free movement provisions.
o And on the other hand, we start applying competition law rules in Article 101/102, which
were written for undertakings to Member State behavior. And we are saying Member States,
I know that these roles were not written for you, but you have to respect them because you
have to be loyal.
o At the same time, you see that they still have some historical differences which are perhaps
no longer relevant. We have de minimis in competition law, but we don't have the minimum
is an internal market law that is strang if you start applying them to the same case. Another
example, either justification grounds justification grounds and internal market law are written
also for Member States, but if we start applying it to individual student we adapt our
justification rounds.
o So in theory, we have a beautiful distinction between the two in practice in many of your
cases you will apply both
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