Summary
Samenvatting Probleem 2 uitwerkingen European Law
- Course
- Institution
Dit zijn de uitwerkingen van Probleem 2 European Law Jaar 2
[Show more]
Seller
Follow
chlvdziel
Content preview
Probleem 2 European LawLeerdoelen:
(1) What are the rules regarding the prohibition of collusive behaviour/cartels in European competition law?
EU competition law serves a two-fold purpose: to promote market integration and ensure effective competition. As regards the objective
(doelstelling van marktintegratie) of market integration, it is worth referring to the Court of Justice’s judgment in Consten and Grundig,
in which it held as follows concerning the prohibition of collusive behaviour in what is now art 101 TFEU:
The Treaty, whose preamble and context aim at abolishing (opheffen) the barriers between States, and which in several provisions gives
evidence of a stern attitude with regard to their reappearance, could not allow undertakings to reconstruct such barriers.
In other words, if member states are required to remove trade barriers, private parties (undertakings) should not be able to create new
ones by concluding market sharing agreements. This reasoning is not limited to article 101 TFEU, as undertakings with a dominant
position are also prohibited from erecting trade barriers or influencing trade. (ook verboden is handelsbelemmeringen op te werpen of
de handel te beïnvloeden) In relation to state aid supervision, for example, the idea is to prevent a subsidy race between member states
that would also artificially alter (veranderen) the flow of trade between the member states. Notably in relation to products that are
distributed in an online environment, the Commission has been keen to prevent market partitioning (marktverdeling) , for example by
companies that engage in geo-blocking.
The second objective of the competition rules is to ensure the proper functioning of the market mechanism, which is the central
distributional mechanism in a free market economy. (waarborgen van de goede werking van het marktmechanisme, het centrale
distributiemechanisme in een vrijemarkteconomie.)
In a competitive market, supply and demand are more evenly matched than in a market where one undertaking has a dominant position
or the members of a cartel engage in price fixing (maken prijsafspraken). That is because a dominant position can be abused, for
example, by deliberately undersupplying the market relative to demand in order to engineer market (opzettelijk onderaanbod op de
markt te bieden ten opzichte van de vraag om de markt te manipuleren), as consumers will simply switch to another supplier if their
regular supplier attempts to create a shortage or simply raises its prices.
Monopolists are less inclined to do their best to meet market demand, minimise production costs or invest in the development of new
and better products.
It is tempting to believe that the purpose of competition rules is to maximise consumer welfare and that the question whether
something is prohibited under those rules should always be answered in the light of its impact on consumer welfare. However, that
would be an oversimplification. Consumer welfare is a yardstick (maatstaf) for measuring the effect or outcome of a more or less
competitive process. However, there is considerable uncertainty as to the exact objective of the EU competition rules and as a result the
yardstick for intervention on the basis of EU competition law is not entirely clear. This uncertainty coincides largely with the difficulty of
defining exactly what competition is.
Competition can be understood as a process whereby undertakings constantly seek to produce and sell cheaper and better products
than their immediate rivals.
The question whether a monopolist is able to behave like a typical monopolist depends, inter alia, on how easy or difficult it is to access a
given market. When the barriers to entry are low, any attempt to raise prices will provoke (uitlokken) the entry of other undertakings
that are able and willing to sell the same product more cheaply. In other words, competition is not just about the conduct of
undertakings but also about how the market is organized. Some forms of government regulation, such as the requirement to obtain a
license, can act as a barrier to entry. By the same token, consumer loyalty also functions as a barrier to entry. The way in which a market
is organized is referred to as the structure of the market. Thus, in order to determine whether a market is competitive, three groups of
variables need to be examined:
In its judgment is GlaxoSmithKline Services and Others, the Court of Justice provided a clear answer to the question whether outcomes in
terms of consumer intervene in a market on competition law grounds:
In order to determine whether competition is being restricted, it is thus imperative to examine both the structure of the market and the
conduct of the relevant economic operators as well as the outcomes of the conduct. (er sprake is van concurrentiebeperking, is het dus
absoluut noodzakelijk om zowel de structuur van de markt en het gedrag van de relevante marktdeelnemers als de resultaten van het
gedrag te onderzoeken.)
Given the large number of economic and non-economic factors that need to be weighed up – at times against each other – competition
law can be a highly complex field. As a result of this complexity, enforcing or complying with the competition rules becomes a daunting
task. In certain cases, however, competition law reduces this complexity and the ensuing legal uncertainty by allowing for short cuts. In
such short cuts more attention is paid to formal aspects of the practice that may be restrict competition. Reference can be made in this
context to, for example, the legal qualification (juridische kwalificatie) of a clause or an agreement in question as opposed to the effects
, that this clause or agreement may have on the market structure, the behaviour on the market or the performance in term of consumer
welfare.
In the literature, the effort to strike a balance between those two approaches to applying competition law is sometimes described as the
difference between a legalistic form-based approach and a more economic approach that focuses on effects that occur in the
performance category. (legalistische vormbenadering en een meer economische benadering die zich richt op effecten die optreden in de
prestatiecategorie.) A key question in this context is whether intervention on competition law grounds can take place on the basis of a
purely legal analysis or whether it should only occur in the event of demonstrable negative economic effect.
Basic principles of competition law
These principles or concepts, which inform (ten gronslag liggen aan) all provisions of EU competition law, relate to the personal and
territorial scope of competition law, the basic principles of competition as an economic phenomenon and the specific objectives of EU
competition law.
The personal scope of competition law: the concept of an undertaking
The EU competition rules apply to undertakings, which are prohibited, inter alia, from concluding anti-competitive agreements (geen
concurrentieverstorende overeenkomsten), pursuant to art 101 TFEU, or abusing a dominant position, pursuant to art 102 TFEU. Entities
that cannot be classified as undertakings are exempt from competition law. This means that the concept of an undertaking determines
the scope ratione personae of EU competition law (de personele werkingssfeer van het EU-mededingingsrecht).
The starting point is the concept of an undertaking, which the Court of Justice defines as follows in Höfner and Elser:
‘It must be observed, in the context of competition law, first that the concept of an undertaking encompassed every entity engaged in an
economic activity, regardless of the legal status of the entity and the way in which it is financed and, secondly, that employment
procurement is an economic activity.’
It is evident from the above that the Court of Justice employs a functional definition of the concept of an undertaking. In other words, it
is function rather than form (eerder de functie dan de vorm die bepaalt of) that dictates whether or not an entity qualifies as an
undertaking.
The key question is therefore what the term ‘economic activity’ actually covers? It can be inferred from the Court of Justice’s judgment in
AAMS, among others, that any entity that is active in a market and buys or sells products or services there under market conditions
should be regarded as an undertaking. There are two exceptions to the concept of economic activity. Based on the Court’s own
terminology, they can be referred to as
- the exercise of public powers exception and: The Court of Justice first accepted the exercise of public powers exception in SAT
v Eurocontrol: This case concerned the refusal of a German airline company by the name of SAT to pay an invoice that it had
received from Eurocontrol, the organization responsible for the safety and control of air navigation in Europe, for air navigation
services provided for flights operated by procedures followed by Eurocontrol, in charging countries different rates for
equivalent services, constitutes an abuse of a dominant position within the meaning of art 86 (102 TFEU).
he national court hearing the case decided to request a preliminary ruling from the Court of Justice, as an undertaking within
the meaning of art 102 TFEU. In order to do so, the Court of Justice had to examine whether Eurocontrol’s activities regarding
control and supervision of the Europe’s air space constitutes an economic activity. It decided that this was not the case on the
grounds that the control and supervision of air space was ‘connected with the exercise of powers which are typically those of a
public authority’. Since Eurocontrol’s activities thus did not constitute an economic activity, competition law did not apply to
them. Moreover, since the art of sending an invoice for the aforementioned control and supervision activities was directly
connected to those activities, it likewise did not constitute an economic activity.
In Cali and Figli, the Court of Justice applied the exercise of public powers exception for a second time when it concluded that
preventive environmental inspections did not constitute an economic activity.
- the exception for non-commercial activities, which are logical extensions of one another.
The second exception to the concept of an undertaking can be referred to as the exception for solidarity-based activities.
Poucet and Pistre case: In this case, the Court of Justice examines the special requirements that the government imposes on
the performance of a particular activity in order to determine whether it could also be performed under ordinary market
conditions (bijzondere eisen die de overheid stelt aan de uitoefening van een bepaalde activiteit om te bepalen of deze ook
onder normale marktomstandigheden kan worden uitgeoefend).
The case law in this area relates mostly to social insurance and pension funds. This sector is often subject to government
intervention in order to ensure a certain level of solidarity (onderhevig aan overheidsingrijpen om een zekere mate van
solidariteit te waarborgen). This is necessary because the risks covered by social insurance tend to vary significantly by
population group. Without such solidarity, those classified as bad risks, such as people with dangerous jobs of a history of
cardiovascular disease, would have to pay much higher premiums that those classified as good risks, such as young and healthy
people with non-dangerous job. Solidarity ensures that social insurance premiums remain affordable for all (Solidariteit zorgt
ervoor dat sociale verzekeringspremies voor iedereen betaalbaar blijven), since the good and bad risks cancel each other out.
In order to achieve this, certain rules may be required. Examples include the obligation to accept policy holders without prior
medical tests, the obligation of company pension funds to support each other if one of them is required to disburse a large
amount of money and the fact that such disbursements are not dependent on the payment of premiums by the insured party.
The higher the level of solidarity, the harder it becomes to provide the social insurance products under ordinary market
conditions, for the simple reason that, given the choice, classified as bad risks (Hoe hoger het niveau van solidariteit, hoe
moeilijker het wordt om de sociale verzekeringsproducten onder normale marktvoorwaarden aan te bieden, om de
eenvoudige reden dat, gezien de keuze, geclassificeerd als slechte risico's). In a number of cases, the Court of Justice has
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 chlvdziel. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.08. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53340 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now