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Aantekeningen College 3
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Aantekeningen van de derde interactieve sessie uit het mastervak European Competition law.
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EUROPEAN COMPETITION LAW –THIRD INTERACTIVE SESSION 10
NOVEMBER 2020
Questions
1. Difference between an agreement and a concerted practice? See slide 8 of recorded lecture 2.
See slide 8 of the recorded lecture to on that slide you find the definition of a concerted practice and you will
see that it precedes the stage of a full agreement. So there is no full agreement in that there is no Complete
understanding between the parties, but they nevertheless behave in common example my hub and spoke
cartel no agreements between the supermarket's it's not an agreement. Nevertheless, according to certain and
CA's it's a concerted practice between these parties. So yes, there is a difference.
2. “Under the ratione materae, what are the sources for the industry exemptions? The lecture
mentioned Art 346 for munitions/arms, but what about transport and agriculture? And in those
areas, is it sector specialist rules or does normal competition law apply with additional
regulation?”
Transport an agricultural It's a historic exemption andthose normal competition law apply with additional
regulation. Well, I do want to point you to Article 42 of the Treatysaying that, yes, we will apply normal
competition rules to agriculture. However, there is a precedence for the common agricultural policy, as you see
there in the Judgments, and that's established line of cases. Common Agricultural Policy takes precedence over
the objectives of the Treaty, in the field of competition, so that is not so innocent. Agriculture has its own
objectives and you may see the results of that throughout agriculture, however, as you know, we do not deal
with these rules, nor with the specific transport rules.
Art. 42 TFEU: “The provisions of the Chapter relating to rules on competition shall apply to production of and
trade in agricultural products only to the extent determined by the European Parliament and the Council
within the framework of Article 43(2) and in accordance with the procedure laid down therein, account being
taken of the objectives set out in Article 39.
The Council, on a proposal from the Commission, may authorise the granting of aid:
(a) for the protection of enterprises handicapped by structural or natural conditions;
(b) within the framework of economic development programmes.”
ECJ: “The first para of Article [42] of the Treaty, which acknowledges that the CAP takes precedence over the
objectives of the Treaty in the field of competition, makes it clear that any application in this field of the
Treaty provisions relating to competition is subject to account being taken of the objectives set out in Article
[39] of the Treaty …”
3. “Maxima Latvija stated that the clause on the rental contract was not an object restriction
because its very nature doesn't restrict/prevent/distort competition in the food trade. Would there
be any recourse in competition law if the company had been using the clause to restrict
competition in another industry? A hypothetical I can imagine is having an anchor tenant be a
company with strong animal welfare goals but who operated in a market unrelated to animals in
any way (Lush, for example) using its veto power to prevent a pet shop from opening in its mall.
What would the analysis look like in this case?”
I would say if in maximal lot via the claws, there was not found to be an object restriction. I would say a fortiori
this example will also not be an object restriction, because the fear of you hindering competition in your own
sector, you are active is much greater than the fear that you would have an impact on competition in this
sector. Well, you are not active. So to me, that would not be different analysis.
,4. “I have a substantial question on week 2: There seems to be a difference between selective and
exclusive distribution systems. Is it only, that exclusive relates to a certain territory while selective
just depends on the selected distributors?
Art. 1(1), sub e, of Regulation 330/2010: “ ‘selective distribution system’ means a distribution system where
the supplier undertakes to sell the contract goods or services […] only to distributors selected on the basis of
specified criteria and where these distributors undertake not to sell such goods or services to unauthorised
distributors within the territory reserved by the supplier to operate that system;”
5. Is absolute and relative territorial protection the same? I could not find information on the
differences.
Art. 4 of Regulation 330/2010: Restrictions that remove the benefit of the block exemption — hardcore
restrictions
The exemption provided for in Article 2 shall not apply to vertical agreements which, […] have as their object:
[…]
(b) the restriction of the territory into which, or of the customers to whom, a buyer […] may sell the contract
goods or services, except:
(i) the restriction of active sales into the exclusive territory or to an exclusive customer group reserved to
the supplier or allocated by the supplier to another buyer, where such a restriction does not limit sales by
the customers of the buyer”
6. “I am writing you this e-mail because I have a question regarding the subject matter of Week 2
and, in particular, the definition of concerted practices.
We learned last week that for a concerted practice to be presumed there needs to be (i) a certain parallel
behaviour, (ii) awareness of market players of the behaviour of their counterparts (access to commercially
sensitive information) and (iii) a causal link between these two elements. In the Eturas case, paras. 30 - 32, the
Court says, that Regulation 1/2003 only regulates the allocation of the burden of proof of these elements
(article 2) and that the rules governing the assessment of evidence and the standard of proof are to be
established by national law.
However, the Court gives some interpretative guidance to national courts that they have to follow when
assessing both the presumption in question and the ways in which it can be rebutted. My question then is: are
all elements of the presumption of concerted practice regulated by national rules or are they part of the
concept of 'concerted practice' pursuant to 101, TFEU? If they would all be regulated by national rules, in light
of the Court's guidance, in which of those elements do national courts generally have more freedom of
assessment?”
What is for EU law and what is for national procedural? What is mentioned in paragraphs 3232 is the so called
procedural autonomy of Member States. What does this mean your law will define or should define the
substantive concepts. EU will or may see for an agreement to exist. There should be a meeting of the minds.
But what is needed to prove that there is a meeting of the minds. That question what procedural rules what
standards of proof. Do you require is answered, not by EU law, but by national law, and that is that standards
of national procedural autonomy, however Euturas is proof the Vebic case, is proof that EU competition law is
limiting that national autonomy. And is ever more intervening in the national autonomy and how does EU
competition will do this. It does it by referring to the standard of efficiency. EU Law must be applied efficiently
by different Member States, the different Member States must not make it excessively difficult or more difficult
for EU competition law to be applied nationally than other parts of their national legislation and that is how the
ECJ limits national procedural autonomy. However the basics still hold true
Agreements or practices which may be object restrictions, but are not listed as hardcore restraints
• First example marketplace bands marketplace bands as you saw in the Coty judgments. So I prohibit
you to sell your product on a marketplace and I not doing that to preserve the luxury image of your
, product, as was the case in Coty, but I'm simply prohibiting it. That for me would be an example of
something that is not hardcore, but is nevertheless objects restriction
• Another example, the pay for delay agreements. Where the originator pharmaceutical producers like
Pfizer are paying generics producers, not to bring the generic products to the markets.They pay for a
delay of the introduction of generic. Again, some of these pay for delay agreements, are perfectly
legal. But many of them are lots are simply tactics to delay introduction of generic on the markets,
these would be object restrictions. Not listed as hardcore restraints
• A technical example, but one of which we are 100% certain that it is a good example because the
Commission itself says so. And that is the example of a joint selling agreement without price fixing.
Two companies agree to sell, their products together through one sales agency this instead of
investing separately in sales channels, we will join forces. And we do not fix the prices of course if we
would fix the prices for our products that we would have a hardcore restraint, but we don't fix the
prices, but we still sell together.That according to the Commission in its guidelines on horizontal
restraints paragraphs 225/256 might be an example of an object restriction, which is not a hardcore
restraints.
F. Case study. Mineral water
Vittel, Volvic, Evian, Spa and Chaudfontaine are the main players on the market for mineral water in France and
the Benelux countries. They have an aggregate market share of more than 80% on the relevant market. One
day, Delhaize, a major chain of supermarkets in these countries, notices that the price for a bottle of 2l mineral
water of Vittel has been raised by 15%. There seems to be no specific explanation readily available for the
substantial price increase. Soon afterwards, the other companies also raise their prices for mineral water. The
Commission decides to investigate into the matter, to scrutinize the price increases upon their compatibility
with EU competition law.
What could be the possible findings of the Commission’s enquiry?
You can say that there is an agreement or not an agreement then a concerted practice that they all follow.
There is an agreement, one possible outcome is there is no agreement, but there is a concerted practice.
It could be joined dominance and the abuse of that. Because they're legally independent undertakings and they
present themselves as single undertakings, but then they do still
It could be predatory pricing and depending on why they increase the prices. The finding could be they do this to
drive orders out of the markets. So it's not only joined dominance and abuse of joint dominance.
It's possible that one of them holds like 60% and the others only five.So then it could be sole dominance and
perhaps an abuse of sole dominance and what would then be the position of the orders. Then they would
basically have no choice other than to like raise a post as well to compete just rational parallel behavior.
Couldn't just be a natural development. The retail would some study or like something on the market, showing
that the customers valued it more over the others. And so they decided to distinguish themselves from the other
companies by raising price, showing that they are more premium perhaps than the others, and the others with
them, not like it. So they will raise the price as well to show that they're on the same quality level as we tell
itself. It's perfectly well possible that there is nothing wrong here. It's just you have one price leader and the
others are followers and
One morning, get out of bed and they say, Well today we're gonna raise our prices by 15% why well because I
want more profits mean is there anything wrong with that. No, we are all free. So they don't have to explain
why they raised their prices, if they feel like raising and everyone else is crazy enough to follow. Okay, so
It can be that the Commission finds a restrictive agreements it, which can be or cannot be exempted that
that is another discussion, it can be that they find a concerted practice.It can be to define joint dominance. It
can be that they find not only joined dominance, but also abuse of joint dominance, example of predatory
pricing. Someone else might say successive pricing. It might be. Number five, that they find soul dominance and
the others are somehow forced to follow or it might be that they find no infringement at all.
, Where is the line between joining dominance of us any conservative practice?
• The difference the similarity. First is that you adopt a common approach on the markets. Yeah.
• The difference is in the dominance elements you can perfectly well have a concerted practice without
Dawn's. You cannot have joined dominance without dominance. So there are similarities and
differences.
• Also for a joint dominant position we say that you present yourself as one on the market that is at
least difference in degree with a concerted practice. Think of the supermarket. They never presented
themselves as well.
It's not, it's not an abuse but this is the end of the service of general economic interest that you have to deliver.
Yeah, you don't, you no longer deliver your minimum service of general economic and it's a bit far fetched.
• 01:46:33It's a bit far fetched, but it's not impossible.
• 01:46:36Okay, I would like to leave it to you, but I do see one more very interesting remark in the
chats.
• 01:46:45And that has to do with our previous case. And the person says doesn't Cisco work in the favor
of my printing company.
• 01:46:56printer software could arguably high tech product like a video calls. Yes, absolutely. And what
you are then talking about is we had three
• 01:47:07Arguments. The first one was, we are not dominant. The second one was, we are not abusing
our dominant position. The third one was, we are perhaps abusing it's but we have a good justification
and what you are adding is
G. Case study: 3D printing
It's a company specialized in 3D printing and it's really like one of these good old American dream success
stories.With one difference. It's not a US company.The company's started out in a garage box bit like the apple
case in a garage box where someone who's a believer, a visionary wanted to establish 3D printing technology at
a time when that was stillalmost not heard of.It was a spin off of a university initially then afterwards University
said well we don't think it's going to work. And the person went it alone.
And the company is now market leader and is quoted on NASDAQ in New York, and they are leading name in
3D printing.However, this company is notearning money by producing 3D printers. What they are making
money with is software.Because they develop software to make their 3D printers and printing technology
communicate with traditional printers.
So they will enter into an agreement with of producers printer saying we can for device for you, software that
allows your traditional old fashioned printers to communicate with new 3D printers.Okay, that's very
successful.The problem is that they want to be certain that if they invest hundreds of thousands of euros in this
software to make this particular printer communicate with a CD printer.So, that the investment will not be in
vain. So before starting to develop that software.
They want an agreement with the printing manufacturer saying once the software is ready.you will bundle this
software with your printers. And if we are certain that you will buy this software and you will buy it only from
us, then we will give you a rebates on the software. We will give you Hewlett Packard's a an exclusivity rebate.
This all goes fine up to a certain moments where, the salespeople, so not lawyers. The salespeople are
negotiating with one of these traditional printing companies. And someone around the table tells them, this is
illegal, what you're doing. You are abusing your dominant position. And there are very high fines for what you
are actually doing here with these exclusivity rebates.
The company's shocked. They never heard this before. Of course, they know about the high fine so they are
really in panic and they come to you and they asked you write me an opinion that I am not abusing my
dominant position.
• Get an economic analysis about their exclusivity rebates that these exclusivity rebates don't lead to
any prohibitive effects on the market, like in the Intel case. Maybe there is no abuse. If we look at
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