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Summary EU Competition Law
Jones & Sufrin (view preview of the summary: shorturl.at/qtzKM)
Contents
Chapter 1 – Introduction to Competition Law ...................................................................................... 11
1.2 Introduction ................................................................................................................................. 11
1.3 The economics of Competition Law ........................................................................................... 11
A. Basic concepts of welfare economics ...................................................................................... 11
B. Perfect Competition and Efficiency ......................................................................................... 12
C. Monopoly ................................................................................................................................. 13
D. Oligopoly ................................................................................................................................. 13
E Perfect Competition, Monopoly, Market Power and Competition in the Real World. ............. 13
F. The Concept of Welfare ............................................................................................................ 13
G. Dynamic Competition and Schumpeterian Rivalry ................................................................. 14
1.4 Schools of Competition Analysis and Theories and Concepts relevant tot Competition Law. .. 14
A. The Structure → Conduct → Performance Paradigm and the Harvard School ....................... 14
B. The Chicago School, Post Chicago and Neo-Chicago ............................................................. 14
C. Game Theory ............................................................................................................................ 15
D. Behavioural Antitrust ............................................................................................................... 15
E. Raising Rivals’ Costs................................................................................................................ 16
F. Transaction Cost Economics .................................................................................................... 16
G. Workable Competition ............................................................................................................. 16
H. Contestable Markets Theory .................................................................................................... 16
I The Austrian School ................................................................................................................... 16
J. Effective Competition ............................................................................................................... 16
1.5 Ordoliberalism ............................................................................................................................ 16
1.6 The Possible Goals and Values of Competition Law.................................................................. 17
A. General ..................................................................................................................................... 17
B. Economic Efficiency and Welfare ........................................................................................... 17
C. Protection of Economic Freedom and the Dispersal of Economic Power ............................... 17
D. Protecting the competitive Process or Protecting Competition ................................................ 17
E. Protecting Competitors ............................................................................................................. 17
F. Fairness ..................................................................................................................................... 17
G. Equality and Redistribution...................................................................................................... 18
H. Other Public Policies and the ‘Public Interest’ ........................................................................ 18
1.7 US Antitrust Law ........................................................................................................................ 18
A. General ..................................................................................................................................... 18
1
, B. Differences between US and EU Law ...................................................................................... 18
1.8 EU Competition Law .................................................................................................................. 19
A. The Objectives of the EU and the Role of the Competition Rules........................................... 19
B. The Objectives of EU Competition Law .................................................................................. 19
1.9 The Application of EU Competition Law ................................................................................... 21
A. Form, Effects, Presumptions, and Theories of Harm ............................................................... 21
B. Over- and Under-Enforcement: Type 1 and Type 2 Errors ...................................................... 22
C. The Use of Economic Analysis ................................................................................................ 22
1.10 The Digital Economy ................................................................................................................ 22
A. General ..................................................................................................................................... 22
B. Features of Digital Economy Markets...................................................................................... 22
C. Challenges in Applying Competition Law to the Digital Economy ......................................... 23
D. The Role of Competition Law in Respect of the Digital Economy ......................................... 23
1.11 EU Competition Law and Regulation ....................................................................................... 23
1.13 Conclusions ............................................................................................................................... 24
Chapter 2 – The Competition Law and Institutions of the European Union......................................... 24
2.1 Central Issues .............................................................................................................................. 24
2.3 Introduction to the European Union............................................................................................ 24
B. The EU treaty ........................................................................................................................... 24
C. The Non-Judicial EU Institutions ............................................................................................. 25
E. The EU Courts .......................................................................................................................... 25
F. General Principles of EU Law and Fundamental (Human) Rights ........................................... 26
2.4 The Competition Provisions ....................................................................................................... 26
A. General ..................................................................................................................................... 26
B. The Substantive Competition Provisions of the TFEU ............................................................ 27
C. The Procedural Provisions........................................................................................................ 27
D. The European Merger Regulation (EUMR) ............................................................................. 27
E. Other Relevant Treaty Provisions............................................................................................. 27
2.5 Communications and Notices ..................................................................................................... 28
2.6 The Competition Rules and the European Economic Area ........................................................ 28
2.7 Modernisation ............................................................................................................................. 28
2.8 Conclusions ................................................................................................................................. 28
Chapter 3 – Market Power, Market Definition, and Barriers to Entry .................................................. 28
3.1 Central Issues .............................................................................................................................. 28
3.3 Market Power .............................................................................................................................. 29
3.4 Market Definition and EU Competition Law.............................................................................. 29
A. The Purpose of Market Definition ........................................................................................... 29
2
, B. The Definition of the Relevant Market .................................................................................... 29
C. The Commission Notice on the Definition of the Relevant Market for the Purposes of EU
Competition Law .......................................................................................................................... 30
D. Demand and Supply Substitution ............................................................................................. 30
E. Demand Substitution ................................................................................................................ 30
F. Supply Substitution ................................................................................................................... 32
G. Particular Issues in Market Definition ..................................................................................... 33
H. The Geographic Market ........................................................................................................... 34
I. The Temporal Market ................................................................................................................ 34
3.5 Barriers to Entry and Expansion ................................................................................................. 34
A. The Role of Barriers to Entry ................................................................................................... 34
B. Types of Barriers to Entry ........................................................................................................ 34
Chapter 4 – Article 101 TFEU: The Elements ...................................................................................... 36
4.1 Central Issues .............................................................................................................................. 36
4.2 Introduction ................................................................................................................................. 36
4.3 The Text and Scheme of Article 101 .......................................................................................... 36
A. The Three Paragraphs .............................................................................................................. 36
B. The Consequences of Infringement .......................................................................................... 36
C. Burden and Standard of Proof .................................................................................................. 36
4.4 The Interpretation and Application of Article 101(1) ................................................................. 37
A. ‘Undertaking’ and Associations of Undertakings’ ................................................................... 37
B. The Meaning of ‘Agreement’, ‘Decision’ and ‘Concerted Practice’ ....................................... 40
C. Object or Effect of the Prevention, Restriction, or Distortion of Competition ........................ 45
D. An Appreciable Effect on Competition and Trade................................................................... 45
E. An Appreciable effect on Trade of Between Member States ................................................... 45
F. Agreements Required by National Legislation or Encouraged by National Governments ...... 46
G. Commission Notices ................................................................................................................ 47
4.5 Article 101(2) .............................................................................................................................. 47
4.6 Exclusions ................................................................................................................................... 47
Chapter 5 – Article 101 TFEI: Substantive Appraisal .......................................................................... 47
5.1 Central Issues .............................................................................................................................. 47
5.2 Introduction and Background...................................................................................................... 47
A. Article 101(1) and Article 101(3)............................................................................................. 47
C. The Interpretation of ‘Object or Effect is the Prevention, Restriction, or Distortion of
Competition – The Early Approach .............................................................................................. 47
D. Section 1 of the Sherman Act................................................................................................... 48
E. Modernisation ........................................................................................................................... 48
3
, 5.3 Article 101(1), Agreements Which have as Their Object or Effect the Prevention, Restriction or
Distortion of Competition ................................................................................................................. 49
A. Object or Effect ........................................................................................................................ 49
B. Agreements that Restrict Competition by Object: Restraints Which Reveal a Sufficiently
Deleterious Impact on Competition .............................................................................................. 49
C. Agreements That Do Not Restrict Competition by Object: Analysing Their Effects .............. 53
D. Conclusions and Reflections on Article 101(1) Analysis ........................................................ 56
5.4 Article 101(3) .............................................................................................................................. 56
A. Application of Article 101(3) ................................................................................................... 56
B. Burden and Standard of Proof .................................................................................................. 56
C. Any Agreement may in Principle Benefit from Article 101(3) ................................................ 57
D. The Article 101(3) Criteria....................................................................................................... 57
E. Block Exemptions .................................................................................................................... 59
F. Unilateral Action and Article 101(3) ........................................................................................ 59
Chapter 6 – Article 102 TFEU: Introduction and Dominant Position .................................................. 60
6.1 Central Issues .............................................................................................................................. 60
6.2 Introduction ................................................................................................................................. 60
6.3 The Text and Scheme of Article 102 .......................................................................................... 60
A. The Prohibition ........................................................................................................................ 60
B. The Enforcement of Article 102 ............................................................................................... 60
6.4 Interpretation and application of Article 102 .............................................................................. 61
A. The Meaning of One or More Undertakings ............................................................................ 61
B. A Dominant Position ................................................................................................................ 62
C. A Dominant Position within a Substantial Part of the Internal Market .................................... 62
D. Abuse ....................................................................................................................................... 62
E. An Effect on Trade Between Member States ........................................................................... 62
6.5 The Review of Article 102 .......................................................................................................... 63
C. The Guidance Paper ................................................................................................................. 63
6.6 The Relationship Between Article 102 and Article 101 ............................................................. 64
6.7 The Concept of Dominance ........................................................................................................ 64
A. The Definition of a Dominant Position in the Case Law ......................................................... 64
B. Dominant Position in the Guidance Paper ............................................................................... 64
C. Effects-based Analysis and the Concept of Dominance ........................................................... 64
D. Establishing Dominance: A Two-stage Approach ................................................................... 65
6.8 Market Definition in Article 102 Cases ...................................................................................... 65
A. General ..................................................................................................................................... 65
B. The Product Market .................................................................................................................. 65
C. The Geographic Market............................................................................................................ 68
4
, D. The Temporal Market .............................................................................................................. 68
6.9 Assessing Market Power ............................................................................................................. 68
A. General ..................................................................................................................................... 68
B. Market Shares ........................................................................................................................... 68
C. Other Factors Indicating Dominance and Barriers to Entry ..................................................... 70
D. Countervailing Buyer Power .................................................................................................... 73
Chapter 7 – Article 102 TFEU: Conduct Which Can Be an Abuse ...................................................... 73
7.1 Central Issues .............................................................................................................................. 73
7.2 Introduction ................................................................................................................................. 74
7.3 The Meaning of Abuse................................................................................................................ 74
A. General ..................................................................................................................................... 74
B. Types of Abuse Covered by Article 102 TFEU ....................................................................... 74
C. Article 102 Covers Exploitative and Exclusionary Abuses ..................................................... 74
D. The Broad Nature of the Concept of Abuse ............................................................................. 75
E. Exclusionary Abuses: Distinguishing Illegitimate from Legitimate Conduct .......................... 76
F. Form- and Effects-based Analysis ............................................................................................ 77
G. Appreciability........................................................................................................................... 77
7.4 The Commission’s Approach to Exclusionary Abuses in the Guidance Paper: The ‘Anti-
Competitive Foreclosure’ Concept ................................................................................................... 77
7.5 Objective Justification, Efficiency, and Other Defences ............................................................ 78
A. General ..................................................................................................................................... 78
B. Objective Justification in Post Danmark I ................................................................................ 78
C. Objective Necessity .................................................................................................................. 78
D. Efficiencies............................................................................................................................... 78
E. The Burden of Proof ................................................................................................................. 79
F. The Difficulties of the Efficiency Defence ............................................................................... 79
G. Protecting the Undertaking’s Own Commercial Interests........................................................ 79
H. The ‘Meeting Competition’ Defence ....................................................................................... 79
7.6 Dominance and Abuse on Different Markets: ‘Leveraging’ of Market Power as a Theory of Harm
.......................................................................................................................................................... 80
7.7 General Issues in Respect of Abuses Concerning Prices ............................................................ 80
A. Exploitative and Exclusionary Pricing Policies ....................................................................... 80
B. Price Discrimination ................................................................................................................. 80
C. Cost Levels ............................................................................................................................... 81
D. The General Approach in the Guidance Paper to Price-based Exclusionary Conduct: the ‘As
Efficient Competitor’ Standard ..................................................................................................... 81
E. The General Approach of the EU Courts to Pricing Abuses .................................................... 82
7.8 Predatory Pricing ........................................................................................................................ 82
5
, A. General ..................................................................................................................................... 82
B. The Areeda-Turner Test ........................................................................................................... 82
C. The Test Laid Down in AKZO................................................................................................. 82
D. The Post Danmark I Case ......................................................................................................... 83
E. The ‘Meeting Competition’ Defence and Predatory Pricing .................................................... 83
F. Recoupment .............................................................................................................................. 83
G. Predatory Pricing in the Guidance Paper and the Sacrifice Principle ...................................... 84
H. Predatory Pricing in New and Digital Economy Markets ........................................................ 84
I. Selective Above-cost Pricing..................................................................................................... 84
7.9 Margin Squeeze .......................................................................................................................... 85
A. General ..................................................................................................................................... 85
B. The Case Law ........................................................................................................................... 85
C. Margin Squeeze in the Guidance Paper.................................................................................... 86
D. US Law on Margin Squeeze .................................................................................................... 86
E. Comment .................................................................................................................................. 86
7.10 Exclusive Dealing: Exclusive Purchasing and Loyalty (-Inducing) Rebates ............................ 87
A. General ..................................................................................................................................... 87
B. Exclusive Dealing: An Abuse ‘By Object’ or ‘By Effect’? ..................................................... 87
C. Exclusive Purchasing ............................................................................................................... 88
D. Exclusive Distribution.............................................................................................................. 89
E. Exclusivity and Loyalty (-Inducing) Rebates ........................................................................... 89
F. Naked Restrictions .................................................................................................................... 91
7.11 Tying and Bundling .................................................................................................................. 91
A. General ..................................................................................................................................... 91
B. The Commercial Rationale for Tying and Bundling ................................................................ 92
C. The Economic Arguments over Tying and Bundling............................................................... 92
D. Tying and Bundling and Article 102 ........................................................................................ 92
E. The Case Law ........................................................................................................................... 92
F. Tying and Bundling in the Guidance Paper .............................................................................. 94
7.12 Refusal to supply....................................................................................................................... 94
A. General ..................................................................................................................................... 94
B. The Exclusion of Competitors from Downstream Markets...................................................... 95
C. The Bronner Criteria and Their Evolution ............................................................................... 95
D. Refusal to Supply and Intellectual Property Rights ................................................................. 97
E. Refusal to Supply and Interoperability – The Microsoft Case ................................................. 98
F. Refusal to Supply ‘Big Data’ .................................................................................................... 98
G. Refusal to Supply in Situations Not Involving Upstream/Downstream Markets..................... 98
6
, H. Refusal to Supply in the Guidance Paper ................................................................................. 99
I. Refusal to Supply and the ‘Essential Facilities’ Doctrine in US Law ....................................... 99
7.13 ‘Self-preferencing’ .................................................................................................................... 99
B. Self-preferencing and the Google Search (Sopping) Decision ................................................. 99
C. Self-preferencing: In Search of a Theory of Harm ................................................................... 99
7.14 Other Exclusionary Practices .................................................................................................. 100
A. General ................................................................................................................................... 100
B. Pursuit of Legal Proceedings, Vexatious Litigation, and Enforcing Legal Rights ................. 100
C. ’Regulatory Gaming’.............................................................................................................. 100
D. ‘Forced Free-riding’ ............................................................................................................... 100
7.15 Secondary Line Discrimination .............................................................................................. 100
A. Introduction to Article 102(c) ................................................................................................ 100
B. Exclusionary Practices under Article 102(c) .......................................................................... 101
C. Discrimination on Grounds of Nationality or Geographic Location ...................................... 101
D. Secondary Line Discrimination and ‘Competitive Disadvantage’ ......................................... 101
7.16 Exploitative Abuses ................................................................................................................ 101
A. Unfairly High or Low Pricing ................................................................................................ 101
B. Imposing Unfair Trading Conditions and Entering into Restrictive Agreements .................. 102
C. Inefficiency and Limiting Production .................................................................................... 102
7.17 Conduct Hindering Inter-Member State Trade ....................................................................... 102
Chapter 9 – Horizontal agreements: Cartels and Collusion ................................................................ 102
9.1 Central Issues ............................................................................................................................ 102
9.2 Introduction ............................................................................................................................... 103
B. Cartels and Collusion – Explicit and Tacit ............................................................................. 103
C. Competition Law and Collusion (Explicit and Tacit) ............................................................ 104
9.3 Cartels ....................................................................................................................................... 105
A. Substantive Analysis under Article 101 ................................................................................. 105
B. Proving a Breach .................................................................................................................... 106
9.4 Characterisation – Is it a Cartel? ............................................................................................... 108
A. Price and Output Restraints Ancillary or Necessary to Beneficial Collaboration? ................ 108
B. Information-sharing Agreements ........................................................................................... 109
C. Restrictions on Non-price Trading Conditions, Advertising, and Promotion ........................ 112
9.5 Oligopoly and the Problem of Tacit Collusion ......................................................................... 112
A. The Oligopoly Problem and Article 101 ................................................................................ 112
B. Oligopoly and Article 102 ...................................................................................................... 112
C. Alternative Methods for Dealing with Oligopolistic Markets under EU Law ....................... 114
Chapter 11 – Vertical Agreements ...................................................................................................... 114
7
, 11.1 Central Issues .......................................................................................................................... 114
11.2 Introduction ............................................................................................................................. 114
A. General ................................................................................................................................ 114
B. Methods of Distribution ...................................................................................................... 115
C. Competition Rules and Distribution ................................................................................... 116
11.3 The EU Approach to Vertical Agreements – An overview .................................................... 119
A. The Background: The Single Market Project and Restrictions on Economic Freedom ..... 119
B. The Approach since 1999: The Block Exemption and Reform .......................................... 119
C. Methodology ....................................................................................................................... 120
11.4 Vertical Agreements and Article 101(1) of the Treaty ........................................................... 120
A. Restrictions by Object ......................................................................................................... 120
B. Analysing the Restrictive ‘Effect’ of Vertical Agreements ................................................ 122
11.5 Article 101(3) .......................................................................................................................... 125
B. The Old Block Exemptions .................................................................................................... 126
C. The Vertical Regulation – Regulation 330/2010 ................................................................ 126
D. The Motor Vehicle Distribution Block Exemption ............................................................. 129
E. Article 101(3) – Individual Assessment.............................................................................. 130
11.6 Subcontracting Agreements .................................................................................................... 130
11.7 Article 102 and Distribution ................................................................................................... 130
11.8 Conclusions ............................................................................................................................. 131
Chapter 13 – Public Enforcement by the Commission and the National Competition Authorities of the
Antitrust Provisions ............................................................................................................................ 131
13.1 Central Issues .......................................................................................................................... 131
13.3 Overview of the EU enforcement Regime from May 2004 .................................................... 131
13.4 Modernisation and Regulation 1/2003 .................................................................................... 131
A. The Old Enforcement Regime Under Regulation 17 ............................................................. 131
B. The Modernisation White Paper............................................................................................. 131
C. Regulation 1/2003 and the Modernisation ‘Pakcage’ ......................................................... 132
13.5 The European Competition Network ...................................................................................... 132
13.7 Enforcement by the Commission ............................................................................................ 132
A. General ................................................................................................................................... 132
B. Fundamental Human Rights ................................................................................................... 132
C. Complaints ............................................................................................................................. 133
D. The Investigation Stage of the Administrative Procedure: Fact-Finding by the Commission
134
E. The Second, ‘Inter Partes’ or ‘Adversarial’, Stage of the Procedure .................................. 136
F. Commission Decisions........................................................................................................ 137
G. The Settlement Procedure in Cartel Cases .......................................................................... 138
8
, H. Informal Settlements ........................................................................................................... 139
I. Fines and Periodic Penalty Payments ................................................................................. 139
K. The Powers of the Commission and Due Process ............................................................... 141
13.8 Proceedings before the Court of Justice of the European Union ............................................ 141
A. Judicial Review ...................................................................................................................... 141
B. Actions for Damages Under Article 340 TFEU ..................................................................... 142
13.9 Enforcement by the National Competition Authorities Within the European Competition
Network .......................................................................................................................................... 142
A. General ................................................................................................................................... 142
B. Enforcement Powers of the National Competition Authorities .............................................. 142
C. Division of Work ................................................................................................................ 142
13.10 The Relationship Between EU and National Competition Law ........................................... 143
13.11 Criminalisation and Sanctions Against Individuals .............................................................. 143
Chapter 14 – Private enforcement ....................................................................................................... 143
14.3 The Role of Private Antitrust Litigation, its Relationship with Public Enforcement, and the
Experience in the US ...................................................................................................................... 143
14.4 Private Enforcement in the EU ............................................................................................... 144
A. Overview: Effective Judicial Protection and the Principle of National Procedural Autonomy
.................................................................................................................................................... 144
B. Uniform and Concurrent Application of Articles 101 and 102 .............................................. 145
C. The Enforceability of Agreements Infringing Article 101 or 102 .......................................... 145
D. Remedies: injunctions and Damages .................................................................................. 145
Chapter 15 – Mergers.......................................................................................................................... 147
15.1 Central Issues .......................................................................................................................... 147
15.2 Introduction ............................................................................................................................. 147
A. What is a Merger? .................................................................................................................. 147
B. The Purpose of Merger Control.............................................................................................. 147
C. The History of the European Merger Control Regulation .................................................. 149
D. Scheme of the European Union Merger Regulation ........................................................... 149
15.3 Jurisdiction .............................................................................................................................. 149
A. Concentrations ....................................................................................................................... 149
B. EU Dimension ........................................................................................................................ 151
C. Concentrations with an EU Dimension: A One-Stop Shop?............................................... 153
D. Concentrations without an EU Dimension .......................................................................... 155
E. A Residual Role for Articles 101 and 102 of the Treaty..................................................... 155
15.4 Procedure ................................................................................................................................ 155
A. Notification ............................................................................................................................ 155
B. Reasoned Submissions ........................................................................................................... 155
9
, C. Suspension.............................................................................................................................. 156
D. Phase I Investigation .............................................................................................................. 156
E. Phase II ................................................................................................................................... 156
F. Conduct of Merger Investigations....................................................................................... 157
G. Summary ............................................................................................................................. 157
15.5 Substantive Appraisal of Concentrations Under the EU Merger Regulation.......................... 157
A. Background ............................................................................................................................ 157
B. Reform and the New Substantive Test ................................................................................... 157
C. Burden and Standard of Proof and Counterfactual................................................................. 158
D. A Significant Impediment to Effective Competition .......................................................... 158
E. Article 2(4), (5), Joint Ventures .......................................................................................... 167
F. Restrictions Directly Related and Necessary to the Concentration..................................... 167
G. Commitments or Remedies ................................................................................................. 167
15.7 Judicial Review and Other Proceedings Before the EU Courts .............................................. 168
15.8 International Issues ................................................................................................................. 168
A. The Long Arm of the EUMR ................................................................................................. 168
B. Reciprocity ............................................................................................................................. 168
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