Examples of Anti-competitive behaviour (supported with case law)
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Course
Competition Law (319)
Institution
Lancaster University (LU)
Lecture notes covering various anti-trust issues such as:
- Algorithmic pricing
- The four requirements of Art 101(3) TFEU
- Burden of proof in Art 101(3)
- Vertical restraints
- Selective distribution
- Franchising
-> All supported with several case studies!
W2 L2:
Algorithmic pricing
Online sellers use AI to set prices (as opposed to individual retailers making those decisions).
Anything where a machine makes the price.
Type of price fixing which drives the price up
Manufacturer A is using pricing software to monitor Retailer B, & C’s compliance with
RRPs.
Retailer D is adhering to retail price maintenance, and retailer E is monitoring and matching
retailer D’s prices using pricing software.
Retailer F & G both use referential pricing algorithms to set prices. Independently the
algorithms interact to increase prices.
Calvano et al, “autonomous pricing algorithms may independently discover that if they are to make
the highest possible profit they should avoid price wars. That is, they may learn to collude, even if
they have not been specifically instructed to do so, and even if they do not communicate with one
another.”
Is this an agreement or independent action?
- If it has an effect on the market its likely to be seen unlawful as an anti-competitive
mechanism.
- Can’t hold the algorithm responsible – whoever sets it will take responsibility for whatever
pricing decision it takes.
Decisions of Associations:
o FRUBO v Commission (Case 71/74)
Decisions do not have to be binding.
Recommendations are likely to have an anti-competitive effect.
o AROW v BNIC, OJ 1982, L379/1
Trade associations themselves can be found to infringe Article 101(1) and can be fined.
o Pavlov v Stichting Pensioenfonds Medische Specialisten (Cases C-180-184/98)
- Medical pension fund.
- Quasi regulatory function. Argued they were exercising public law functions therefore
outside 101.
- The other half is acting as a trade body.
“The fact that a professional organisation is governed by a public-law statute does not
preclude the application of Article 85 EC. According to its wording, that provision applies to
agreements between undertakings and decisions by associations of undertakings. So, the
legal framework within which an association decision is taken and the legal definition given
to that framework by the national legal system are irrelevant”.
, Competition Law 319
Undertakings:
- Decisions between two separate undertakings
- Must be sufficiently independent of each other
o Viho (Case C-73/95P)
- The ‘economic entity’ doctrine.
- A group of companies are a single economic entity – they’re not separate undertakings.
o Sumal (Case 882/19)
- Private and public law enforcement of competition law have the same understanding of
‘undertaking’
- Groups of companies can contain several ‘economic units’ with ‘no connection’ between
them.
- There must be an economic connection between the violation and the person you’re
bringing action against.
Effect on trade between MS
- If the agreement has an effect on trade between MS, EU law will apply.
- If the agreement has no effect on trade, domestic law applies.
o Societe Technique Miniere v Maschinenbau Ulm (STM) (Case 56/65)
For Article 81 to apply:
“it must be possible to foresee with a sufficient degree of probability on the basis of a set of
objective factors of law or fact that the agreement in question may have an influence, direct or
indirect, actual or potential, on the pattern of trade between Member States”
Relatively low bar for EU law to apply.
o Cementhandelaren v Commission (Cement) (Case 8/72)
Commission Notice, Guidelines on the effect on trade concept contained in Arts 81 and 82 of
the Treaty, OJ 2004, C101/81.
Object or effect?
Agreement must have an object or effect to restrict competition
STM (Case 56/65)
- The words ‘object’ and ‘effect’ are to be read disjunctively. (separate meanings)
Brasserie de Haecht v Wilkin (Case 23/67)
The importance of market analysis:
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