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Oxford Law Citator
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Faull & Nikpay - The EU Law of Competition, 3rd Edition edited by Faull, Jonathan; Nikpay, Ali; Taylor, Deirdre (1st March 2014)
Preliminary Material
Editors
Assistant Editor
Contributors
Foreword to the 3rd Edition
Preface
Contents—Summary
Contents
List of Abbreviations
Table of Cases
1 Tables of Court of Justice and the General Court of the European Union Cases
A Alphabetical (Court of Justice and General Court of the European Union combined)
B Numerical Table of Court of Justice Cases
C Numerical Table of General Court Cases
2 Tables of European Commission Decisions
A Alphabetical (all types of Decision combined)
B Numerical Table of Merger Decisions
C Numerical Table of Non-Merger Decisions
D Numerical Table of Joint Venture Decisions
3 Table of National and Other Cases
Belgium
Denmark
EFTA Court
European Court of Human Rights
Finland
France
Germany
Italy
Netherlands
Poland
Spain
United Kingdom
United States
Table Of Treaties and Legislation
1 Table of EU/EC Treaties
2 Tables of EU/EC Legislation
A Table of Regulations
B Table of Directives
C Table of Decisions
3 Table of EU/EC Notices, Guidelines and Other Informal Texts
A Table of Guidelines and Notices (Chronological)
B Table of Recommendations
C Table of Communications
D Table of Competition Reports
4 Table of National Legislation
Austria
Finland
France
Germany
Hungary
Ireland
Italy
Latvia
Lithuania
Netherlands
Romania
Slovakia
Spain
Sweden
United Kingdom
United States
5 Table of International Treaties
Main Text
Part I General Principles
1 The Economics of Competition
Preliminary Material
A Introduction
1.01
1.02
1.03
1.04
1.05
B Structure, Conduct, Performance
(1) Early Developments
1.06
1.07
1.08
(2) The Harvard School
1.09
1.10
1.11
(3) The Chicago School
1.12
1.13
1.14
1.15
(4) More Recent Developments
1.16
1.17
1.18
1.19
1.20
C Static Welfare Analysis of Market Power
(1) Introduction
1.21
1.22
1.23
1.24
1.25
1.26
(2) Basic Microeconomic Concepts
1.27
(a) Consumer Surplus
1.28
(b) Production Costs
1.29
1.30
(c) Short-Run Production Costs
1.31
1.32
1.33
1.34
1.35
(d) Profit Maximization
1.36
1.37
1.38
1.39
1.40
(e) Long-Run Production Costs
1.41
1.42
(f) Economies of Scale and Minimum Efficient Scale
1.43
1.44
1.45
1.46
1.47
1.48
1.49
(g) Entry Barriers
1.50
1.51
1.52
1.53
1.54
1.55
(h) Contestability
1.56
1.57
(3) Perfect Competition
(a) The Model
1.58
1.59
1.60
1.61
(b) The Outcome
1.62
1.63
1.64
(4) Monopoly
(a) The Model
1.65
1.66
1.67
(b) The Outcome
1.68
1.69
1.70
1.71
1.72
1.73
1.74
1.75
1.76
1.77
(5) Oligopoly
(a) Introduction
1.78
1.79
1.80
1.81
1.82
(b) Game Theory
1.83
1.84
1.85
1.86
1.87
1.88
1.89
1.90
1.91
1.92
(c) The Scope for Collusion Illustrated with the Prisoner’s Dilemma
1.93
1.94
1.95
1.96
1.97
1.98
1.99
1.100
1.101
1.102
1.103
1.104
1.105
1.106
1.107
1.108
(d) Some Results
1.109
1.110
1.111
1.112
1.113
1.114
1.115
1.116
1.117
1.118
1.119
D Dynamic Welfare Analysis of Market Power
(1) Innovation and Welfare
1.120
1.121
(2) Different Views
1.122
1.123
1.124
(3) Some Empirical Results
1.125
1.126
(4) The ‘New Economy’
1.127
1.128
1.129
1.130
1.131
1.132
(5) Some Concluding Remarks
1.133
E Market Definition
1.134
1.135
1.136
1.137
1.138
(1) Product Market Definition
1.139
1.140
(a) Demand-Side Substitution
1.141
1.142
1.143
1.144
1.145
1.146
(b) The SSNIP Test
1.147
1.148
1.149
1.150
1.151
1.152
(c) Elasticity Concepts and the Diversion Ratio
1.153
1.154
1.155
1.156
1.157
1.158
1.159
(d) Supply-Side Substitution
1.160
1.161
1.162
1.163
1.164
1.165
1.166
1.167
1.168
(2) The Relevant Geographic Market
1.169
(a) Demand-Side Substitution
1.170
1.171
(b) Supply-Side Substitution
1.172
1.173
1.174
(3) Specific Issues in the Context of Market Definition
1.175
(a) Chains of Substitution
1.176
1.177
(b) Price Discrimination
1.178
1.179
1.180
(c) Captive Production
1.181
1.182
1.183
(4) Further Considerations
(a) Market Definition in Practice
1.184
1.185
1.186
1.187
(b) Defining the Market: Not an End in Itself
1.188
1.189
F Market Power and Dominance
1.190
1.191
(1) Market Power
(a) Concept
1.192
1.193
1.194
1.195
1.196
1.197
1.198
1.199
1.200
1.201
(b) Identification of (Static) Market Power
1.202
1.203
1.204
1.205
1.206
1.207
1.208
1.209
1.210
(2) Dominance
1.211
(a) Single Dominance
1.212
1.213
1.214
1.215
1.216
1.217
1.218
(b) Collective Dominance
1.219
1.220
1.221
1.222
1.223
1.224
(3) Enhancing Market Power
1.225
1.226
(a) Merger with a Competitor: Unilateral vs Coordinated Effects
1.227
1.228
1.229
1.230
1.231
1.232
1.233
1.234
1.235
1.236
1.237
1.238
1.239
(b) Exclusionary Strategies
1.240
1.241
1.242
1.243
1.244
1.245
1.246
1.247
1.248
G Empirical Methods for Market Definition and the Assessment of Market Power
1.249
1.250
1.251
1.252
(1) Analysis of Prices and Price Movements
1.253
(a) Price Correlation Analysis
1.254
1.255
1.256
1.257
1.258
1.259
1.260
1.261
1.262
(b) Extension: Stationarity/Co-Integration
1.263
1.264
(2) Analysis of Price Elasticities of Demand
1.265
1.266
1.267
1.268
1.269
1.270
1.271
1.272
1.273
1.274
1.275
1.276
1.277
1.278
1.279
1.280
1.281
1.282
1.283
1.284
1.285
1.286
1.287
1.288
(3) Critical Loss Analysis
1.289
1.290
1.291
1.292
1.293
1.294
(4) UPP
1.295
1.296
1.297
1.298
1.299
1.300
1.301
(5) Event Analysis
1.302
1.303
1.304
1.305
(6) Assessment Methods Relating Price to Market Structure
1.306
(a) Price Concentration Analysis
1.307
1.308
1.309
1.310
1.311
1.312
(b) Direct Evaluation of Competitive Constraints
1.313
(7) Analysis of Bidding Data
1.314
1.315
1.316
1.317
1.318
1.319
1.320
1.321
1.322
1.323
1.324
(8) Merger Simulation
1.325
1.326
1.327
1.328
1.329
1.330
1.331
1.332
2 The Enforcement System Under Regulation 1/2003
Preliminary Material
A Direct Application of Articles 101 and 102
(1) Introduction
2.01
2.02
2.03
(2) The Aims and Results of the System Change
2.04
(a) Increased Application of Articles 101 and 102 at Member State Level
2.05
2.06
2.07
2.08
(b) The Commission’s Focus on Enforcement
2.09
2.10
2.11
(3) Self-assessment and Legal Certainty
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
(4) The Direct Effect of Articles 101 and 102
2.20
2.21
2.22
2.23
2.24
(5) Burden and Standard of Proof
2.25
2.26
2.27
2.28
2.29
B The Relationship Between EU Competition Law and National Competition Law
(1) Introduction
2.30
2.31
2.32
(2) Article 3(1): The Obligation to Apply Articles 101 and 102
2.33
(a) Scope of Article 3(1)
2.34
2.35
2.36
2.37
2.38
2.39
(b) Primary Functions of Article 3(1)
2.40
2.41
2.42
2.43
2.44
(3) The Convergence Rule of Article 3(2)
2.45
2.46
2.47
2.48
2.49
2.50
2.51
(4) The Legal Consequences of Infringing Article 3(1) and (2)
2.52
2.53
2.54
(5) Article 3 and the Primacy Rule
2.55
2.56
2.57
(6) Exceptions to Article 3
2.58
(a) National Competition Laws
2.59
2.60
2.61
2.62
2.63
2.64
2.65
(b) National Laws Implementing EU Law Directives
2.66
2.67
(c) Member State Measures Covered by Article 106
2.68
2.69
(d) National Merger Control Laws
2.70
2.71
(e) Criminal Sanctions on Natural Persons
2.72
2.73
2.74
2.75
2.76
C Powers and Decisions of National Competition Authorities
(1) Introduction
2.77
(2) The NCA
2.78
2.79
2.80
2.81
2.82
(3) The Decisions of an NCA
2.83
(a) Scope of Article 5
2.84
2.85
2.86
2.87
(b) The Decisions Listed in Article 5
2.88
2.89
2.90
(4) Triggering a Decision by an NCA
(a) The NCA Acts on its Own Initiative or on a Complaint
2.91
2.92
(b) National Notification Systems
2.93
2.94
2.95
D Commission Powers and Decisions
(1) Introduction
2.96
2.97
2.98
(2) Article 7: Finding and Termination of Infringements
2.99
(a) The Power to Find Infringements
2.100
2.101
(a)
(b)
(c)
2.102
(b) The Power to Impose Remedies
2.103
(i) General Principles
2.104
2.105
2.106
(ii) Structural and Behavioural Remedies
2.107
2.108
2.109
(iii) Break-ups
2.110
2.111
2.112
(a) Break-ups
(b) Break-ups
(c) Break-ups
(d) Break-ups
2.113
(c) Complaints
2.114
2.115
(3) Article 8: Interim Measures
2.116
2.117
(4) Article 9: Commitments
(a) Introduction
2.118
2.119
2.120
(b) The Nature of Article 9 Decisions
2.121
2.122
2.123
2.124
2.125
(c) The Purpose of Article 9 Decisions
2.126
2.127
2.128
(d) The Procedure for Adopting Article 9 Decisions
2.129
2.130
2.131
2.132
2.133
2.134
(e) Adoption of the Decision and Reopening of the Proceedings
2.135
2.136
2.137
(a)
(b)
(c)
2.138
2.139
2.140
2.141
2.142
(f) The Scope for Legal Challenge
2.143
2.144
(5) Article 10: Finding of Inapplicability
(a) Introduction
2.145
(b) The Nature and Purpose of Article 10 Decisions
2.146
2.147
2.148
2.149
(c) The Legal Effects of Article 10 Decisions
2.150
2.151
(i) The Relationship Between Articles 9 and 10
2.152
2.153
E Cooperation Between Enforcers
(1) Introduction
2.154
(2) Cooperation within the ECN
2.155
(a) The Sharing of Work Amongst the Competition Authorities
2.156
2.157
2.158
2.159
(b) An NCA’s Request to Another NCA to Carry Out an Investigation
2.160
2.161
2.162
(c) Exchange of Information and Its Use in Evidence
2.163
2.164
(i) Exchange of Information within the ECN
(i) Empowering ECN Members to Exchange Information
2.165
2.166
(ii) Allowing ECN Members to Exchange Information
2.167
2.168
2.169
(iii) Exchanging Information Voluntarily Submitted by a Leniency Applicant
2.170
2.171
2.172
(ii) The Use of the Exchanged Information in Evidence
2.173
(i) The Relation Between Article 12 and the National Law Provisions Prohibiting NCAs from Divulging Confidential Information
2.174
2.175
2.176 A Wider Umbrella for the Protection of Confidential Information
(iii) The Use in Evidence of the Information Exchanged within the ECN
2.177
2.178
(i) The General Principles of EU Law
2.179
2.180
2.181
(ii) Information Exchanged Can Only Be Used in Evidence for the Application of EU Competition Rules
2.182
2.183
2.184
(iii) Information Exchanged Can Only Be Used in Evidence in Respect of the Subject Matter for Which it was Collected
2.185
2.186
(iv) The Limitations With Regard to the Use of Information in Evidence to Impose Sanctions on Natural Persons
2.187
2.188
2.189
2.190
2.191 Experience with Article 12
(d) The Obligation of Professional Secrecy and the Need to Disclose Information
2.192
2.193
(i) Which Information is Covered by Professional Secrecy?
(i) The Wide Coverage of Professional Secrecy
2.194
2.195
2.196
2.197 Specific Sub-Category Within the Wider Concept of Professional Secrecy: Business Secrets and Other Confidential Information
(iii) Business Secrets
2.198
2.199
2.200
2.201 Other Confidential Information
(ii) The Disclosure of Information Acquired or Exchanged Pursuant to Regulation 1/2003
2.202
2.203
2.204
(i) Disclosure Necessary to Prove an Infringement of Article 101 or 102
2.205
2.206
(iii) Disclosure in granting access to the file
(i) Access to the File for the Addressee of a Statement of Objections
2.207
2.208
2.209 Access to Information by Other Parties with Legitimate Interest, in Particular Complainants
(3) Coherent Application within the ECN
(a) Introduction
2.210
2.211
2.212
(b) Information under Article 11(3)
2.213
(c) The Procedure in Article 11(4)
2.214
2.215
(i) The Scope of the Article 11(4) Procedure
2.216
2.217
2.218
2.219
2.220
2.221
(ii) The Article 11(4) Process and its Objective
2.222
2.223
2.224
(iii) The Legal Consequences of Failure to Comply with Article 11(4)
2.225
2.226
2.227
2.228
(d) Article 11(6): The Commission’s Power to Withdraw a Case
2.229
2.230
(i) The Legal Nature of Article 11(6)
2.231
2.232
2.233
(ii) The Authorities Covered by Article 11(6)
2.234
2.235
2.236
2.237
(iii) Circumstances in Which Withdrawal may be Envisaged
2.238
2.239
2.240
2.241
2.242
2.243
2.244
2.245
2.246
2.247
(iv) The Procedure for Applying Article 11(6)
2.248
2.249
2.250
(4) Coherent Application by National Courts
(a) The Competence of National Courts to Apply EU Competition Rules
2.251
2.252
2.253
(b) The Coherent Application of EU Competition Rules by National Courts
2.254
2.255
2.256
2.257
2.258 Commission Initiatives towards Coherent Application of EU Competition Rules
(i) The Commission’s Policy Notices and Guidelines
2.259
2.260
(ii) Co-Financing the Training of National Judges in EU Competition Rules
2.261
2.262
2.263 A Database on National Judgments
(ii) Consistency in the Case of Parallel or Consecutive Application of EU Competition Rules
2.264
2.265
2.266
2.267
2.268
2.269
(c) Cooperation Between the Commission and the National Courts
2.270
2.271
2.272
2.273
2.274 The Opportunity for the National Courts to ask the Commission for Information or for its Opinion
(i) The Opportunity to Ask the Commission for Information
2.275
2.276
2.277
2.278
2.279
2.280
2.281
2.282
2.283
2.284 The Opportunity to Ask the Commission for Its Opinion
(ii) The Submission of Observations
2.285
2.286
2.287
2.288
2.289
3 Article 101
Preliminary Material
A Introduction
3.01
B Scope of Article 101
(1) Scope
3.02
3.03
(2) Coal and Steel
3.04
(3) Defence
3.05
3.06
3.07
3.08
3.09
3.10
3.11
(4) Environment and Culture
3.12
3.13
3.14
3.15
(5) Sport
3.16
3.17
3.18
3.19
3.20
3.21
3.22
C Article 101(1)
3.23
3.24
3.25
3.26
(1) Undertakings
(a) Definition
3.27
3.28
3.29
3.30
3.31
3.32
3.33
(b) Professions
3.34
3.35
3.36
3.37
3.38
(c) Public Bodies Exception
3.39
3.40
3.41
3.42
3.43
3.44
3.45
3.46
3.47
3.48
(d) The Single Economic Unit Doctrine (No Intra-Enterprise Conspiracy in EU Law)
3.49
3.50
3.51
3.52
(i) A Subsidiary Wholly-Owned, or Almost Wholly-Owned, By Its Parent
3.53
3.54
3.55
3.56
3.57
3.58
(ii) A Parent Holding a Majority Shareholding in a Subsidiary But Less than 100 Per Cent
3.59
3.60
3.61
(iii) Parent Liability in the Context of Joint Control
3.62
3.63
3.64
3.65
3.66
3.67 Companies with Non-Controlling Stakes in Another Company
(e) Successor Undertakings
3.68
3.69
3.70
3.71
3.72
3.73
(2) Agreements
(a) General Definition
3.74
(b) Requires At Least Two Undertakings
3.75
(c) Form Irrelevant
3.76
3.77
3.78
3.79
3.80
3.81
3.82
3.83
(d) Does the Notion of ‘Agreement’ Presuppose that the Parties Jointly Intend to Limit Their Freedom of Action as Regards Future Conduct on the Market?
3.84
3.85
3.86
(e) Single Continuous Infringement Doctrine
3.87
3.88
3.89
3.90
3.91
3.92
3.93
3.94
3.95
3.96
3.97
3.98
3.99
3.100
(f) Tacit Acquiescence in Relation to the Particular Anti-Competitive Measure in Question is the Minimum Requirement in Vertical Cases
3.101
3.102
3.103
(i) Volkswagen II
3.104
3.105
3.106
3.107
3.108
(ii) What Does Tacit Acquiescence Require?
3.109
3.110
3.111
3.112
3.113
(iii) Care Should be Taken in Applying the Bayer/Volkswagen II Approach
3.114
3.115
3.116
3.117
(g) Formal Termination May Not be Sufficient
3.118
3.119
3.120
(h) Judicial Settlement
3.121
(3) Decisions by Associations of Undertakings
3.122
3.123
3.124
3.125
(4) Concerted Practices
(a) Definition
3.126
3.127
3.128
3.129
3.130
3.131
3.132
3.133
3.134
3.135
3.136
3.137
3.138
3.139
(b) Can a Concerted Practice be Inferred from Circumstantial Evidence Alone?
3.140
3.141
3.142
(c) Vertical Concerted Practices
3.143
3.144
3.145
3.146
(i) ‘Hub and Spoke’ Concerted Practices
3.147
3.148
3.149
(5) Distinction Between Agreements and Concerted Practices
3.150
3.151
3.152
3.153
3.154
(6) State Compulsion
3.155
3.156
3.157
3.158
3.159
(7) The Notion of Restriction of Competition under EU Competition Law
3.160
3.161
3.162
3.163
3.164
3.165
3.166
3.167
3.168
3.169
3.170
3.171
3.172
3.173
3.174
3.175
3.176
3.177
3.178
3.179
3.180
3.181
3.182
3.183
(8) Restriction by Object
(a) Concept of Restriction by Object
3.184
3.185
3.186
(a)
(b)
(c)
(i) Category 1
3.187
3.188
3.189
3.190
(ii) Category 2
3.191
3.192
3.193
3.194
3.195
3.196
3.197
3.198
3.199
3.200
(iii) Category 3
3.201
3.202
3.203
(i) Allianz Hungary
3.204
3.205
3.206
3.207
3.208
(b) Restriction by Object and Appreciability
3.209
(i) The ‘Pre- Expedia ’ Case Law
3.210
3.211
3.212
3.213
3.214
(ii) The Commission’s Approach to Appreciability in Object Cases
3.215
3.216
(iii) The Expedia Judgment
3.217
3.218
(9) Restriction by Effect
3.219
3.220
3.221
3.222
(a) The EU Courts Had Broadly Endorsed the Commission’s Traditional Approach
3.223
3.224
3.225
3.226
3.227
3.228
3.229
(b) The EU Courts Have Modified the Traditional Approach in a Number of Important Ways
3.230
(c) Restrictions of Rivalry Must Be Assessed in Their Market Context
3.231
3.232
3.233
3.234
(d) Ancillary Restraints Doctrine
3.235
(i) Commercial Ancillarity
3.236
3.237
3.238
3.239
3.240
3.241
3.242
(ii) Public Interest Ancillarity
3.243
3.244
3.245
3.246
3.247
(iii) The Narrow Scope of the Ancillary Restraints Doctrine
3.248
3.249
3.250
(i) Directly Related and Subordinate
3.251
3.252
3.253 Necessary
(iii) Objective Necessity for the Implementation of the Main Operation
3.254
3.255
3.256
3.257
3.258
3.259
3.260
3.261
3.262
3.263
3.264
3.265
(iv) Proportionality
3.266
3.267
3.268
(iv) Concluding Remark: Ancillary Restraints Doctrine Difficult to Apply but Relevant for the Identification of the Relevant Counterfactual in Effects Analysis
3.269
3.270
(e) Exclusivity Necessary for Supply
3.271
3.272
3.273 Exclusivity Must be Objectively Necessary
(ii) It is Unclear Whether this Doctrine Applies to Agreements Between Competitors
3.274
3.275
3.276
3.277
3.278
(iii) Doctrine Only Likely to Apply in Clear-Cut Cases
3.279
3.280
3.281
(i) Exception to General Rule
3.282
3.283
3.284
3.285
3.286
3.287
3.288 Does the Approach Apply to ‘Object’ Cases?
(v) Difference Between Exclusivity Necessary for Supply and Ancillary Restraints Doctrines
3.289
3.290
3.291
3.292
3.293
(f) Appreciability
3.294
3.295
3.296
3.297
(g) Cumulative Effects Doctrine
3.298
3.299
3.300
3.301
3.302
(h) The Purpose of the Market Analysis
(i) No Rule of Reason under Article 101(1)
3.303
3.304
3.305
3.306
3.307
3.308
3.309
3.310
(ii) Gøttrup-Klim
3.311
3.312
3.313
(iii) Wouters
3.314
3.315
3.316
3.317
3.318
3.319
(iv) Metro I and II
3.320
3.321
3.322
3.323
(v) O2
3.324
3.325
3.326
(i) Does O2 Signal a Change in Direction?
3.327
3.328
3.329
3.330
3.331
3.332
3.333
3.334
3.335
3.336
3.337 Explicit Rejection of the Rule of Reason under Article 101(1) by the General Court
(i) Extent of Market Analysis
3.338
3.339
3.340
3.341
3.342
3.343
(j) Restrictive Clauses Are Not a Necessary Condition for the Application of Article 101(1)
3.344
3.345
3.346
(k) The Commission’s Policy as set out in the Article 101(3) Guidelines
3.347
3.348
3.349
(i) Step 1: The Counterfactual
3.350
3.351
3.352
3.353
3.354
3.355
3.356
3.357
3.358
(ii) Step 2: Assessment of the Likely Effect of the Agreement Restraint on Prices, Output, Innovation, or the Variety or Quality of Goods or Services
3.359
3.360
3.361
3.362
3.363
3.364
3.365
(l) The Current State of Affairs: Developments in the Commission’s Policy and the EU Courts’ Case Law Subsequent to the Article 101(3) Guidelines
3.366
3.367
3.368
3.369
3.370
3.371
3.372
3.373
3.374
(i) Horizontal Cooperation Guidelines
3.375
3.376
3.377
3.378
3.379
3.380 Block Exemption Regulations
(iii) De Minimis Notice
3.381
3.382
(a) De Minimis Notice
(b) De Minimis Notice
3.383
3.384
D Jurisdiction
(1) General
3.385
3.386
3.387
(2) The Concept of Trade Between Member States
3.388
3.389
3.390
3.391
(3) The Link Between Trade and the Agreement or Practice
3.392
3.393
3.394
(4) The Notion of ‘May Affect’
(a) Introduction
3.395
3.396
(b) A Sufficient Degree of Probability
3.397
3.398
3.399
3.400
3.401
3.402
3.403
(c) An Influence on the Pattern of Trade
3.404
3.405
(i) Direct or Indirect, Actual or Potential
3.406
3.407
3.408
3.409
3.410
3.411
3.412
(5) Appreciability
(a) General Principles
3.413
3.414
3.415
(b) Quantification
3.416
3.417
3.418
3.419
3.420
3.421
3.422
3.423
3.424
3.425
3.426
(6) Assessment of Various Types of Agreement and Practices
(a) Introduction
3.427
(b) Agreements and Practices Concerning Imports and Exports and Agreements and Practices Implemented in Several Member States
3.428
(c) Agreements and Practices Confined to the Whole or Part of a Member State
3.429
3.430
3.431
(d) Agreements and Practices Covering Part of a Member State
3.432
3.433
3.434
(e) Agreements and Practices Involving Third Countries
3.435
3.436
3.437
3.438
3.439
3.440
3.441
E Article 101(2)
3.442
3.443
3.444
F The Article 101(3) Exception
(1) Introduction
3.445
3.446
3.447
(a)
(b)
(c)
(d)
3.448
3.449
3.450
3.451
(2) The Relationship Between Article 101(1) and Article 101(3)
3.452
3.453
3.454
(3) General Principles for the Application of Article 101(3)
(a) Introduction
3.455
3.456
3.457
(b) The Nature of the Benefits that Can Be Taken into Account
3.458
3.459
3.460
(c) The Relevant Market as the Proper Framework for Applying Article 101(3)
3.461
3.462
3.463
(d) The Temporal Application of Article 101(3)
3.464
3.465
3.466
(e) Block Exemptions
3.467
3.468
3.469
3.470
3.471
(4) The Four Conditions of Article 101(3)
(a) Introduction
3.472
(b) The First Test of Article 101(3): Efficiency Gains
3.473
3.474
3.475
3.476
3.477
3.478
3.479
(i) Examples of Relevant Types of Efficiencies
3.480
3.481
3.482
(ii) The Substantiation of Efficiency Claims
3.483
3.484
3.485
3.486
3.487
3.488
(c) The Second Test of Article 101(3): Indispensability
3.489
3.490
3.491
3.492
3.493
3.494
(d) The Third Test of Article 101(3): A Fair Share for Consumers
3.495
3.496
3.497
3.498
3.499
3.500
3.501
3.502
3.503
3.504
3.505
(e) The Fourth Test of Article 101(3): No Elimination of Competition in Respect of a Substantial Part of the Products in Question
3.506
3.507
3.508
3.509
3.510
3.511
4 Article 102
Preliminary Material
A The System of Enforcement of Article 102
(1) Introduction
(a) Elements of Article 102
4.01
4.02
4.03
4.04
4.05
4.06
4.07
(b) Relationship Between Article 101 and Article 102
4.08
4.09
(c) Purpose of Article 102: Protection of Competition or Protection of Competitors?
4.10
4.11
4.12
4.13
(d) Role of Efficiencies in Article 102 Assessment
4.14
4.15
(2) Categorization of Abuses: Exploitative vs Exclusionary
4.16
(a) Prohibition of Customer Exploitation
4.17
4.18
4.19
4.20
4.21
4.22
(b) Prohibition of Exclusionary Practices
4.23
4.24
4.25
4.26
4.27
4.28
(3) Consequences of Infringement of Article 102
(a) Introduction
4.29
4.30
(b) Guiding Principles
4.31
4.32
4.33
4.34
(c) Types of Sanctions and Remedies in Article 102 Cases
(i) Fines
4.35
4.36
4.37
4.38
4.39
4.40
4.41
4.42
4.43
4.44
4.45 Cease and Desist Orders
(iii) Behavioural Remedies
4.46
4.47
(iv) Structural Remedies
4.48
4.49
4.50
4.51 Which Remedy is Most Appropriate?
(d) Procedural Issues
4.52
(4) Commitment Decisions (Article 9 of Regulation 1/2003)
4.53
(a) Basic Principles
4.54
4.55
4.56
(b) Importance of Commitment Decisions in Article 102 Cases
4.57
4.58
4.59
4.60
(c) Concerns Regarding the Use of Commitment Decisions in Article 102 Cases
4.61
4.62
4.63
4.64
4.65
4.66
4.67
(5) Judicial Review of Article 102 Decisions
4.68
4.69
4.70
(a) Review of Facts and Law
4.71
4.72
4.73
4.74
4.75
(b) Review of ‘Complex Economic Matters’
4.76
4.77
4.78
4.79
4.80
4.81
4.82
B The Article 102 Enforcement Priorities Guidance
(1) The Emergence of the Effects-Based Approach
(a) Traditional Approach under EU Law
4.83
4.84
4.85
(b) Form- vs Effects-Based Approach
4.86
4.87
4.88
(c) Pros and Cons of an Effects-Based Approach
4.89
4.90
4.91
(d) The Recent Adoption by the EU Courts of a More Explicitly Effects-Based Approach
4.92
(2) The Commission’s Review of Article 102 Policy
(a) Purpose of the Review
4.93
4.94
(b) The Staff Discussion Paper
4.95
4.96
4.97
(3) The Article 102 Enforcement Priorities Guidance
(a) Adoption of Guidance as opposed to Guidelines
4.98
(b) Economics-Based Approach to Enforcement
4.99
4.100
4.101
4.102
(c) Impact of the Guidance on Future Cases
4.103
4.104
4.105
(d) Overview of the Guidance
4.106
4.107
(e) Brief Summary of the Approach to Abuse
4.108
4.109
4.110
4.111
(i) Anti-Competitive Foreclosure
4.112
4.113
(ii) Assessment of the Effect on Consumers
4.114
4.115
4.116
4.117
4.118
(iii) Objective Justifications and Efficiencies
4.119
4.120
4.121
C Dominance
4.122
(1) Concept of Single Dominance
(a) Legal Definition of Single Dominance
4.123
(b) Concerns Regarding the Elements of the Definition of Dominance
4.124
4.125
4.126
(c) Approach Taken in the Guidance to the Test Elements
4.127
4.128
4.129
(d) Assessment of Market Power
4.130
4.131
4.132
(e) How Does the Guidance Approach Fit with the Legal Approach
4.133
4.134
4.135
4.136
4.137
4.138
(2) Factors Relevant to Single Dominance
4.139
(a) Economic Measurement of Market Power
4.140
4.141
4.142
(b) Factors Under the Case Law and the Commission’s Guidance
4.143
4.144 The Position of the Undertaking Concerned and Its Competitors
(i) Market Definition
4.145
4.146
4.147
4.148
4.149 Market Shares
4.150 Calculation methods
Market share as indicators of market power
4.151
4.152
4.153
4.154
Inferences from market share levels under the case law
4.155
4.156
AKZO
4.157
4.158
4.159
4.160
4.161
4.162
4.163
Inferences from market share levels under the Guidance
4.164
4.165
4.166
4.167
4.168
(iii) Profitability of the Undertaking
4.169
4.170
4.171
(iv) Conduct of the Undertaking
4.172
4.173
4.174
(v) The Position of Competitors
4.175
4.176
4.177
4.178
4.179
(ii) Barriers to Entry and Expansion
4.180
4.181
4.182
4.183
4.184
4.185
(i) Regulatory Barriers to Entry
4.186
4.187
4.188
4.189
4.190
4.191 Capacity Constraints
(iii) Economies of Scale and Scope
4.192
4.193
4.194
4.195
4.196
(iv) Network Effects
4.197
4.198
4.199
4.200
4.201 Switching Costs
(vi) Vertical Integration and Exclusive or Preferential Access to Inputs or Customers
4.202
4.203
4.204
(vii) Financial Strength
4.205
4.206
(viii) Spare or Excess Capacity
4.207
4.208
4.209
4.210
(ix) Other Factors
4.211
4.212
4.213
4.214
4.215
(iii) Countervailing Buyer Power
4.216
4.217
(3) Concept of Collective Dominance
(a) Definition of Collective Dominance
4.218
4.219
4.220
(b) Non-Oligopolistic Collective Dominance
4.221
4.222
4.223
4.224
4.225
4.226
4.227
4.228
(c) Vertical Non-Oligopolistic Collective Dominance
4.229
4.230
(d) Oligopolistic Collective Dominance
4.231
4.232
4.233
4.234
4.235
4.236
4.237
4.238
4.239
4.240
(4) Abuse of a Collective Dominant Position
4.241
(a) Joint Abuses
4.242
(b) Single Abuses
4.243
(5) Dominance and Abuse in Neighbouring Markets
4.244
4.245
4.246
4.247
(6) Dominance in New Economy Markets
4.248
4.249
4.250
4.251
D Concept of Abuse
(1) General Concept of Abuse
4.252
4.253
(2) Definition of Abuse Under the EU Courts’ Case Law
4.254
4.255
4.256
4.257
4.258
4.259
4.260
(3) The Test for Abuse
4.261
(a) Exploitative and Discriminatory Abuses
4.262
(b) Exclusionary Abuses
4.263
4.264
4.265 Potential Tests Based on Economic Principles
(ii) Approach Taken in the Commission’s Guidance
4.266
4.267
(i) Anti-Competitive Foreclosure: General
4.268
4.269
(ii) Test for Foreclosure in Pricing Cases
4.270
4.271
4.272
4.273
4.274
(iii) When is Foreclosure Enough to be Anti-Competitive?
4.275
4.276
4.277
4.278
4.279
(iv) Likely Harm to Consumers
4.280
4.281
4.282
(4) The Special Responsibility of the Dominant Undertaking
4.283
4.284
4.285
4.286
4.287
4.288
4.289
(5) Objective Justification
(a) General
4.290
(b) Objective Necessity
4.291
(c) Efficiency Defence
4.292
4.293
4.294
4.295
4.296
4.297
E Predatory Pricing
(1) What is Predatory Pricing?
(a) Definition
4.298
(b) Economic Theories of Predatory Pricing
4.299
(c) Distinguishing Predatory Pricing From Normal Competition
4.300
4.301
(2) Predation Under EU Law: The AKZO Test
4.302
4.303
4.304
4.305
(a) Whether and How to Assess the Intent of the Dominant Firm
4.306
4.307
4.308
(b) What is the Appropriate Cost-Based Benchmark?
4.309
4.310
4.311
4.312
4.313
4.314
(c) Is a Below Cost Test Appropriate?
4.315
4.316
4.317
4.318
4.319
4.320
(i) Above-Cost Price Cuts as Part of a Wider Exclusionary Strategy
4.321
4.322
4.323
(ii) Above-Cost Price Cuts by a Quasi-Monopolist Liable to Exclude its Only Competitor
4.324
4.325
(iii) Above-Cost Price Cuts Restricting Free Trade
4.326
4.327
(d) Difficulties With Relying on Price-Cost Tests
4.328
(i) Below Cost Pricing May Not Be a Necessary Condition
4.329
4.330
(ii) Below Cost Pricing May Not Be a Sufficient Condition
4.331
4.332
(iii) Below Cost Pricing May Be Pro-Competitive
4.333
4.334
(iv) Below-Cost Pricing Tests Create Measurement Difficulties
4.335
4.336
4.337
4.338
4.339
4.340
(e) The Post Danmark Test
4.341
4.342
(f) The Role of Recoupment?
4.343
4.344
4.345
4.346
4.347
(3) The Predation Test in the Article 102 Enforcement Priorities Guidance
4.348
4.349
4.350
(a) Profit Sacrifice
4.351
4.352
(i) Advantages and Disadvantages of Using AAC to Measure Profit Sacrifice
4.353
4.354
(ii) Possible Alternative: Comparing Incremental Revenues with Incremental Costs
4.355
4.356
4.357
4.358
(iii) Assessing Whether There are Other, More Profitable Actions
4.359
4.360
4.361
4.362
(b) Exclusion of an Equally Efficient Competitor
4.363
4.364
4.365
4.366
(c) Consumer Harm and Recoupment
4.367
4.368
4.369
4.370
4.371
(i) Entry is Unlikely After the Prey is Excluded or Disciplined
4.372
4.373
4.374
4.375
(ii) Re-Entry is Unlikely
4.376
4.377
4.378 Assessment of the Competitive Constraint Exercised by the Excluded Rival
(iv) Dominance Is Not Evidence of Recoupment
4.379
4.380
4.381
4.382
4.383
(d) Objective Justification
4.384
4.385
4.386
4.387
4.388
(i) Market-Expanding Efficiencies
4.389
4.390
4.391
4.392 To Facilitate Learning and Awareness of a Product Among Consumers
(iii) To Improve the Firm’s Positioning as a Low-Price Company
4.393
4.394
(e) Meeting Competition Defence
4.395
(f) Other Loss-Minimizing Strategies
4.396
F Exclusive Dealing: Exclusivity Obligations and Loyalty Rebates
(1) Case Law and Commission Decisional Practice
(a) Definition and Types of Exclusivity
4.397
(i) Legal and De Facto Exclusivity
4.398
4.399
4.400
4.401 Requirements Contracts
(iii) English Clauses
4.402
4.403
4.404
4.405 Imposition of Exclusive Obligations on Suppliers
4.406 Exclusivity Imposed by Distributors
(b) The Abuse Test in Exclusivity Cases
4.407
4.408
4.409
4.410
(c) Objective Justification
4.411
4.412
(d) Definition and Types of Conditional Rebates
4.413
4.414
4.415
(e) Abuse Test in Rebates Cases
4.416 Rebates That Are Presumptively Lawful (Quantity Rebates)
4.417 Rebates That Are Nakedly Exclusionary
(iii) Fidelity Rebates
4.418
4.419
4.420
(iv) Individualized Target Rebates
4.421
4.422
4.423
4.424
4.425
(v) Standardized Rebates
4.426
4.427
4.428
(2) Policy and Effects-Based Approach
(a) Commission’s Approach Under the Article 102 Enforcement Priorities Guidance
4.429
4.430
4.431
4.432
4.433
4.434
(b) The Logic of the Commission’s Approach Towards Loyalty Rebates and Exclusive Dealing
4.435
4.436
(i) Economic Reasoning for Use of Rebate Schemes
4.437
4.438
4.439
4.440
4.441
4.442
(ii) Possible Anti-Competitive Harm From Use of Rebate Schemes
4.443
4.444
4.445
(c) Identifying Anti-Competitive Foreclosure Under the Article 102 Enforcement Priorities Guidance
4.446
(i) Step 1: The As-Efficient Competitor Test
4.447
4.448
4.449
(ii) Step 2: Assessment of Anti-Competitive Foreclosure
4.450
4.451
4.452
4.453
(iii) Countervailing Efficiencies and Objective Justification
4.454
4.455
4.456
4.457
4.458
4.459
(d) The Limits of the Article 102 Enforcement Priorities Guidance Approach
4.460
4.461
4.462
4.463
4.464
4.465
4.466
4.467
(e) The Commission’s Application of the New Approach
4.468
4.469
4.470
4.471
4.472
4.473
G Tying and Bundling
(1) Introduction
(a) Definition of Tying and Bundling
4.474
4.475
4.476
(b) Relationship with Article 101
4.477
(2) Legal Analysis and Case Law on Tying
4.478
4.479
(a) A Dominant Position on the Tying Market
4.480
4.481
(b) The Two-Product Test
4.482
4.483
4.484
4.485
4.486
4.487
(a)
(b)
(c)
(c) Coercion
4.488
4.489
4.490
4.491
(d) Anti-Competitive Effect
(i) The Requirement to Prove Foreclosure of As-Efficient Competitors
4.492
4.493
4.494
4.495
4.496
4.497
4.498
4.499
4.500
4.501
(e) Objective Justification
4.502
(i) Reduction in Transaction Costs
4.503
4.504
4.505
4.506
4.507
4.508
4.509
4.510 Preservation of Goodwill, Quality Assurance, and Ensuring Compliance with Safety Requirements
(iii) Dynamic Efficiency
4.511
4.512
4.513
(iv) Standardization
4.514
4.515
4.516
4.517
4.518
(3) Case Law on Mixed Bundling
4.519
4.520
4.521
(4) Policy and Effects-Based Approach
(a) The Article 102 Enforcement Priorities Guidance Approach Towards Tying and Bundling
4.522
4.523
4.524
4.525
4.526
4.527
4.528
(b) No Presumption of Anti-Competitive Harm
4.529
4.530
4.531
4.532
4.533
4.534
4.535
4.536
4.537
(c) Anti-Competitive Tying and Bundling
4.538
4.539
4.540
4.541
4.542
4.543
4.544
4.545
4.546
4.547
4.548
4.549
4.550
4.551
4.552
(d) Price Discrimination and Multi-Product Rebates
4.553
4.554
4.555
4.556
4.557
H Refusal to Supply
(1) Concept of Abusive Refusal to Supply
4.558
4.559
4.560
(2) Basic Elements
(a) Competitive Advantage on Downstream Market
4.561
4.562
(b) Enforcement of Other Abuse
4.563
4.564
(c) Constructive Refusal to Supply
4.565
4.566
(d) De novo Refusals vs Withdrawal of Supply
4.567
4.568
(3) Types of Refusal to Supply
4.569
(a) Refusal to Supply a Physical Product or Service
4.570
(b) Refusal to Provide Access to an Essential Facility
4.571
(c) Refusal to License IP Rights
4.572
4.573
4.574
(d) Refusal to Supply Information Needed for Interoperability
4.575
4.576
(4) Potential Anti-Competitive Effects of Refusals to Supply
4.577
4.578
4.579
4.580
(5) The Case Law on Refusal to Supply
(a) General Framework
4.581
4.582
4.583
4.584
(b) Indispensability
4.585
4.586
4.587
4.588
4.589
4.590
4.591
4.592
4.593
(c) The Foreclosure Effect
4.594
4.595
4.596
4.597
4.598
(d) Raising Rivals’ Costs as Exclusionary Effect?
4.599
4.600
4.601
(e) The Foreclosure Effect and the ‘Essential Facilities’ Doctrine in Commission Practice
4.602
4.603
4.604
4.605
(f) Consumer Harm
4.606
4.607
4.608
(g) Interoperability Cases Since Microsoft
4.609
(h) Refusal to Supply an Existing Customer
4.610
4.611
4.612
(i) Defences (Objective Necessity and Objective Justification)
4.613
4.614
4.615
4.616
4.617
4.618
4.619
(6) The Approach Under the Commission’s Guidance
(a) General Approach
4.620
4.621
4.622
4.623
(b) Necessary Conditions
4.624
4.625
4.626
4.627
(i) Objective Necessity
4.628
4.629
4.630 Elimination of Effective Competition
(iii) Consumer Harm (and Incentives Balancing Test)
4.631
4.632
4.633
(iv) Objective Justifications (Efficiencies)
4.634
4.635
(7) Refusal to Supply and Patents
4.636
4.637
I Margin Squeeze
(1) Concept of a Margin Squeeze Abuse
4.638
4.639
4.640
4.641
(2) Legal Analysis of Margin Squeeze
(a) The Early Case Law
4.642
4.643
4.644
4.645
(b) Elements of the Abuse
4.646
4.647
4.648
4.649
4.650
4.651 Margin Squeeze is a Stand-Alone Abuse
(ii) The Need to Demonstrate an Anti-Competitive Effect
4.652
4.653
4.654
4.655
4.656
(iii) Factors Relevant to Assessing Potential Anti-Competitive Effect
4.657
4.658
4.659
(iv) Anti-Competitive Effect is Assessed by Reference to the ‘As-Efficient Competitor’ Test
4.660
4.661
(v) Basis for Calculating Potential Effects is the Cost Data of the Dominant Undertaking
4.662
4.663
4.664 A Margin Squeeze is Capable of Objective Justification
(vii) Level of Dominance Goes to Effect, Not to the Existence of the Abuse
4.665
4.666
(3) Economic Assessment
(a) General
4.667
4.668
4.669
4.670
(b) The Cost Benchmark
4.671
4.672
4.673
(c) Profitability Analysis
4.674
4.675
4.676
4.677
4.678
(d) Assessment of the Spread
4.679
4.680
4.681
(e) Specific Considerations in Start-Up Phases
4.682
(4) Interplay Between Margin Squeeze and Refusal to Deal: Indispensability
4.683
4.684
4.685
4.686
4.687
4.688
4.689
4.690
4.691
4.692
(5) Interplay Between Margin Squeeze and Regulatory Obligations
4.693
J Specific Abusive Practices in Relation to IP Rights
(1) Introduction
(a) Complementary Aims of IP Rights and Antitrust
4.694
4.695
(b) Appropriateness of Antitrust Intervention in the IP Rights Arena
4.696
4.697
4.698
4.699
4.700
4.701
(c) Potential Competition Concerns Arising out of IP Rights
4.702
4.703
4.704
4.705
4.706
(2) Supply of Misleading Information to Extend Patent Validity
4.707
4.708
4.709
4.710
4.711
4.712
(a) Nature of the Abuse
4.713
4.714
4.715
(b) Intent Not Determinative
4.716
4.717
4.718
4.719
(c) Evidence of Actual Effects
4.720
4.721
(3) Withdrawal of Marketing Authorization to Restrict Entry of Generics
4.722
4.723
4.724
4.725
4.726
4.727
4.728
(4) Patent Filing Strategies
(a) Early Cases on Strategic Use of Patents
4.729
4.730
(b) Defensive Patent Strategies: Blocking Patents
4.731
4.732
4.733
4.734
4.735
(c) Other Strategic Behaviour
4.736
4.737
(5) Patent Settlements With Reverse Payments (Pay for Delay)
(a) Overview: Potential Benefits and Harms From Patent Settlements
4.738
4.739
(b) Commission Practice
4.740
4.741
4.742
4.743
4.744
4.745
(6) Patent Hold-Up in the Context of Standard Setting
(a) Context: Standard Setting and Patent Hold-Up Possibilities
4.746
4.747
4.748
4.749
4.750
(b) Patent Ambush
4.751 Definition
4.752 Anti-Competitive Effects of Patent Ambush
(iii) Conditions for Abuse: The Rambus Decision
4.753
4.754
4.755
4.756
4.757
4.758
4.759
4.760
4.761
4.762
(c) FRAND Hold-Up
(i) Definition of FRAND Hold-Up: The Qualcomm Case
4.763
4.764
(ii) Particular Issues Surrounding Article 102 Enforcement in FRAND Licensing
(i) FRAND is Not a Static or Pre-Defined Concept
4.765
4.766
4.767
4.768
4.769
4.770
(ii) What Constitutes ‘Fair’ and ‘Reasonable’?
4.771
4.772
4.773
4.774
4.775 Practical difficulties
4.776 Potential lack of commercially attractive alternatives
Uncertainty
4.777
4.778
4.779 Under-compensation
4.780 Strategic behaviour by vertically integrated firms
(iii) What Constitutes ‘Non-Discriminatory’?
4.781
4.782
4.783
(iii) Importance of FRAND
4.784
4.785
4.786
(7) Anti-Competitive Litigation in Relation to Standard Essential Patents
4.787
4.788
4.789
4.790
4.791
4.792
4.793
4.794
4.795
4.796
(8) Issues Applicable Across IP Rights Cases
(a) Assessing Dominance in Pharmaceutical IP Rights Cases
4.797
4.798
(i) Inferring Dominance from Level of Rents
4.799
4.800
4.801
4.802
4.803
4.804
4.805 Dominance Relative to a Competitive Counterfactual Post-Loss of Exclusivity
(b) Anti-Competitive Foreclosure and Objective Justification in IP Rights Cases
4.806
4.807
4.808
4.809
(c) Applicability of Article 102 to ‘Standard’ Strategies/Tactics Available Under IP Rights
4.810
4.811
4.812
4.813
(d) Intervention under Article 102 vs Enforcement of IP Law
4.814
4.815
4.816
4.817
4.818
4.819
4.820
K Exploitative Abuses
(1) Concept of Excessive Pricing
4.821
4.822
4.823
4.824
4.825
4.826
(2) The Test for Excessive Pricing Under EU Case Law
(a) The United Brands Test
4.827
4.828
4.829
4.830
4.831
4.832
(b) Difficulties in the Application of the United Brands Test: Port of Helsingborg
4.833
4.834
4.835
(c) Alternative Approaches under the Case Law
4.836
4.837
4.838
4.839
4.840
4.841
4.842
4.843
(3) Imposing Other Unfair Terms
4.844
4.845
4.846
4.847
4.848
4.849
(4) Economic Approach to Excessive Pricing
(a) Circumstances Suitable for Intervention
4.850
4.851
4.852
4.853
4.854
4.855
(i) To Restore Dynamic Competition
4.856
4.857
(ii) Exploitative Prices as a Result of Exclusionary Conduct
4.858
4.859
4.860
4.861
4.862 Exploitation of Dominance Resulting from Non-Competitive Forces
(b) Determining Whether Prices are Abusive
4.863
(i) The Price-Cost Difference is Excessive
4.864
4.865
4.866
(ii) Unfair Price in Itself or Compared to Others
4.867
4.868
4.869
4.870
4.871
4.872
4.873
4.874
(i) Discrimination-Based Benchmarks
4.875
4.876
4.877
4.878
(ii) Direct Price-Cost Comparisons
4.879
4.880
4.881
(5) Unfairly Low Prices Extracted by Dominant Buyers
4.882
4.883
(6) Limiting Production, Markets, or Technical Development
4.884
4.885
4.886
4.887
4.888
L Price Discrimination
(1) Concept of Price Discrimination
4.889
4.890
(2) Competition Concerns Regarding Price Discrimination
4.891
4.892
4.893
4.894
4.895
(3) Case Law and Commission Practice on Article 102(c) Discriminatory Pricing Abuses
4.896
(a) Discrimination Based on Nationality
4.897
4.898
(b) Geographical Price Discrimination
4.899
4.900
4.901
4.902
4.903
4.904
4.905
4.906
(c) Market-Distorting Price Discrimination
4.907 Definition
(ii) Equivalent Transactions
4.908
4.909
4.910
(iii) Dissimilar Conditions
4.911
4.912
4.913
4.914
(iv) Competitive Disadvantage
4.915
4.916
4.917
4.918
4.919
4.920
4.921
4.922
4.923
4.924
4.925
4.926
4.927
4.928
4.929 The Discriminatory Fees Were an ‘Important Part of a Supplier’s Cost Structure’
(ii) A ‘Significant Effect’ Should Be Required
4.930
4.931
4.932
4.933
4.934
(4) Policy and Effects-Based Approach
(a) The Commission’s Current Enforcement Approach
4.935
4.936
4.937
4.938
5 Mergers
Preliminary Material
A Introduction
(1) Origins and Evolution of EU Merger Control
(a) Introduction of an EU Merger Control System
5.01
5.02
(b) The First Decade of Application of EU Merger Control
5.03
5.04
5.05
5.06
(c) The Judgments in Airtours, Tetra Laval, and Schneider
5.07
5.08
(d) The 2004 Reform
5.09
5.10
(e) Evolution of EU Merger Control Following the 2004 Reform
5.11
5.12
5.13
5.14
(2) Core Principles of EU Merger Control
(a) Compulsory Ex Ante Notification
5.15
5.16
(b) One-Stop Shop
5.17
5.18
5.19
(c) One-Tier Administrative Procedure Subject to Judicial Review
5.20
5.21
(d) Enforcement Objectives
5.22
5.23
(3) Statistics on Enforcement Over Time
5.24
5.25
5.26
5.27
5.28
5.29
5.30
B Jurisdiction
(1) Overview
5.31
(a) Two-Limbed Test to Determine Jurisdiction
5.32
(i) The Concept of a ‘Concentration’
5.33
5.34
5.35 The Requirement of an ‘EU Dimension’
(b) Regulatory Framework: The Merger Regulation and the Jurisdictional Notice
5.36
5.37
(c) Discussions with the Commission on Jurisdiction in Individual Cases
5.38
5.39
5.40
5.41
5.42
(2) The Concept of a Concentration: Merger
5.43
5.44
5.45
5.46
5.47
(3) The Concept of a Concentration: Acquisition of Control
(a) Overview
5.48
(b) Control
5.49
5.50
5.51
(i) Who Acquires Control?
5.52
5.53
5.54
5.55
5.56
(ii) How Can Control Be Acquired?
5.57
5.58
5.59
5.60
5.61
(iii) The Object of Control
5.62
5.63
5.64
5.65
5.66
(iv) The Lasting Nature of the Change in Control
5.67
5.68
5.69
5.70
5.71
5.72
(v) Internal Restructurings and Concentrations Involving State-Owned Undertakings
5.73
5.74
5.75
5.76
5.77
(c) The Acquisition of Sole Control
5.78
5.79 De Jure Sole Control
(ii) De Facto Sole Control
5.80
5.81
5.82
5.83
5.84
5.85
5.86
(d) The Acquisition of Joint Control
5.87
5.88
5.89 Equal Voting Rights
(ii) Veto Rights
5.90
5.91
5.92
(iii) Joint Exercise of Voting Rights
5.93
5.94
(e) Changes in the Structure and/or Quality of Control
5.95
5.96
5.97
5.98
5.99
(f) Non-Controlling Minority Shareholdings (Structural Links)
5.100
5.101
5.102
5.103
5.104
5.105
(g) Exceptions Under Article 3(5) of the Merger Regulation
5.106
5.107
5.108
5.109
5.110
(4) Joint Ventures
(a) Introduction
5.111
5.112
5.113
(b) Concept of Joint Venture
5.114
5.115
5.116
5.117
5.118
5.119
(c) Identification of the Relevant Jurisdictional Test
5.120
5.121 Creation of a Joint Venture
(ii) Joint Acquisitions of an Undertaking or Business
5.122
5.123
5.124
5.125
5.126
5.127 Other Operations Involving Joint Ventures
(d) The Requirement of Full-Functionality
(i) Overview
5.128
5.129
5.130
5.131 Sufficient Resources to Operate Independently on the Market
(iii) Relations Between the Joint Venture and its Parent Companies
5.132
5.133
5.134
5.135
5.136
(iv) Operating on a Lasting Basis
5.137
5.138
(5) Interrelated and Staggered Operations
5.139
5.140
(a) Interdependent Transactions
5.141
5.142
5.143
5.144
5.145
5.146
5.147
5.148
(b) Consecutive Transactions Between the Same Parties (Staggered Transactions)
5.149
5.150
5.151
(6) Ancillary Restraints
5.152
(7) The Requirement of an EU Dimension
5.153
(a) The Purpose of Turnover Thresholds
5.154
5.155
5.156
(b) The Principal Threshold under Article 1(2) of the Merger Regulation
5.157
5.158
5.159
(c) The Alternative Threshold under Article 1(3) of the Merger Regulation
5.160
5.161
5.162
(d) Appraisal of the Operation of the Turnover Thresholds
5.163
5.164
5.165
5.166
5.167
(8) The Calculation of Relevant Turnover
5.168
(a) Step 1: Identifying the Undertakings Concerned
5.169
5.170
(i) General Rule
5.171
5.172
5.173
5.174
(ii) Specific Scenarios on the Acquiring Side
5.175
5.176
5.177
5.178
5.179
(iii) Specific Scenarios on the Acquired Side
5.180
5.181
5.182
5.183
(b) Step 2: Methodology for the Calculation of Turnover
5.184
(i) Concept of Turnover
5.185
5.186
5.187
(ii) Attribution of Turnover Between Undertakings in a Group
5.188
5.189
5.190
5.191
5.192
5.193
5.194
5.195
(iii) Treatment of Internal Turnover
5.196
5.197
5.198
(iv) Geographic Allocation of Turnover
5.199
5.200
5.201
5.202
5.203
(c) The Relevant Date and Financial Accounts
5.204
5.205
5.206
C Interaction with Member States and Third Countries
(1) Introduction
5.207
(2) Reallocation of Jurisdiction between the Commission and Member States (‘Referrals’)
(a) Purpose of the Referral System
5.208
5.209
5.210
(b) Use of the Referral System Over Time
5.211
5.212
5.213
5.214
5.215
(c) Guiding Principles Applied when Considering Referral Requests
5.216
5.217
5.218
5.219
5.220
5.221
(d) Operation of the Referral System in Practice
5.222
5.223
5.224 Referrals from the Commission to One or More NCAs
(i) Pre-Notification Referrals Requested by the Parties (Article 4(4))
5.225 Overview
Requirements for referral
5.226
5.227
5.228
5.229
Factors relevant to the exercise of its discretion
5.230
5.231
Referral process
5.232
5.233
5.234
5.235
5.236
5.237
5.238
(ii) Post-Notification Referrals Requested by an NCA (Article 9)
5.239 Overview
Requirements for referral
5.240
5.241
5.242
5.243
5.244
5.245
5.246
5.247 Factors relevant to the exercise of the Commission’s discretion
Referral process
5.248
5.249
5.250
5.251
5.252
5.253
5.254 Request by two (or more) Member States
5.255 Referrals From One or More NCAs to the Commission
(i) Pre-Notification Referrals Requested by the Parties (Article 4(5))
5.256 Overview
Requirements for referral
5.257
5.258
Factors relevant to the assessment
5.259
5.260
Process
5.261
5.262
5.263
5.264
5.265
(ii) Post-notification Referrals Requested by an NCA (Article 22)
Overview
5.266
5.267
Requirements for referral
5.268
5.269
5.270
5.271 Factors relevant to the assessment
Process
5.272
5.273
5.274
5.275
5.276
(e) Evaluation and Reform of the Referral System
5.277
5.278
5.279
5.280
(3) Member State Action on Non-Competition Grounds
(a) Introduction
5.281
5.282
(b) Assessment of Legitimate Interests
5.283
(i) Recognized Interests
5.284
5.285
5.286
5.287
5.288
5.289
(ii) Non-Recognized Interests
5.290
5.291
5.292
5.293
(4) Concentrations in the Defence Sector
5.294
5.295
5.296
5.297
(5) Cooperation Between the Commission and Member States
5.298
(a) General Cooperation Obligations
5.299
5.300
5.301
5.302
(b) Cooperation During Specific Phases of an Investigation
5.303 During the Referral Process
(ii) During Phase I
5.304
5.305
(iii) During Phase II
5.306
5.307
5.308
(c) Enhancing Cooperation Between Member States Through the ECN
5.309
(6) Merger Control in the EEA Context
(a) The Scope of the Merger Control System under the EEA
5.310
5.311
(b) Allocation of Jurisdiction Between the Commission and the EFTA Surveillance Authority
5.312
5.313
5.314
5.315
(c) Cooperation Between the Commission and the EFTA Surveillance Authority
5.316
5.317
(7) International Cooperation in Merger Control
(a) Framework for International Cooperation
5.318
5.319
5.320
5.321
(b) Practical Aspects of International Cooperation in Merger Cases
5.322
5.323
5.324
5.325
5.326
5.327
(c) Statistics on International Cooperation
5.328
5.329
5.330
D Merger Control Procedure
(1) Introduction
5.331
(2) Principal Features of the Procedural Framework
(a) Underlying Rationale: Proportionate, Effective Control
5.332
5.333
5.334
5.335
5.336
5.337
(b) Binding Procedural Deadlines
5.338
5.339
5.340
(c) The Instruments of the Procedural Framework
5.341
(d) The Different Actors in EU Merger Proceedings
5.342
(i) The Notifying Parties and Other Involved Parties
5.343
5.344
5.345
5.346
5.347
(ii) The Commission
5.348
5.349
5.350
5.351
5.352
5.353
5.354
5.355
5.356 Third Parties
5.357 Member State NCAs
5.358 Non-EU Agencies
5.359 The EU Courts
(3) The Main Steps and Timetable for EU Merger Control Proceedings
5.360
5.361
(4) The Pre-Notification Phase
(a) Introduction
5.362
5.363
5.364
5.365
(b) Timing of Pre-Notification Contacts
5.366
5.367
(c) Initial Contact and Request for a Case Team
5.368
5.369
5.370
(d) Confidentiality
5.371
5.372
(e) Discussions on Jurisdiction
5.373
5.374
(f) Discussions on Substance, Procedure, and Timing
5.375
5.376
5.377
5.378
(g) Review of Draft(s) Form CO and Requests for Waivers
5.379
5.380
(h) Submission of Internal Documents
5.381
5.382
5.383
(i) Fact Finding: Contacts with Third Parties
5.384
(j) Green Light for Notification
5.385
5.386
5.387
(5) Notification of a Concentration
(a) Introduction
5.388
(b) Obligation to Notify and Standstill Obligation
5.389
5.390
5.391 Automatic Exceptions: Public Bids and Series of Transactions in Securities
(ii) Ad Hoc Derogations at the Request of the Parties
5.392
5.393
5.394
5.395
(iii) Preventing Early Implementation
5.396
5.397
(c) Consequences of Failure to Notify
5.398
(d) Timing of Notification
5.399
5.400
5.401
5.402
(e) Notifying Parties
5.403
(f) Submission of Form CO
5.404
5.405
5.406
5.407
5.408
5.409
5.410
5.411
(g) Incompleteness
5.412
5.413
5.414
(h) Publication of the Fact of the Notification
5.415
5.416
(6) Phase I
(a) Introduction
5.417
(b) Timetable and Deadlines
5.418
5.419
5.420
5.421
(c) Fact-Finding
5.422
5.423
5.424
5.425
5.426
(d) Where Competition Concerns are Identified
5.427
5.428
5.429
(e) Decision
5.430
(f) Notification and Publication
(i) Notification To The Parties
5.431
5.432
(ii) Publication
5.433
5.434
5.435
5.436
(7) Phase II: In-Depth Investigation
(a) Introduction
5.437
5.438
(b) Procedural Safeguards in Phase II
5.439
(c) Timetable and Deadlines
5.440
5.441
5.442
5.443
5.444
(d) Initial Stage: Review of Key Documents, Reply to the Article 6(1)(c) Decision and State of Play Meeting
5.445
5.446
(e) In-Depth Investigation
5.447
5.448
5.449
(f) Where the Competition Concerns are Dispelled
5.450
(g) Where Competition Concerns Remain
5.451
(h) The Statement of Objections
(i) Purpose and Content
5.452
5.453
5.454 Timing
(iii) Scope of the SO
5.455
5.456
(iv) Other Parties
5.457
5.458
(i) Access to File
(i) Purpose
5.459
5.460
5.461 Timing
5.462 Scope
(i) Internal Documents
5.463
5.464
5.465
(ii) Business Secrets and Confidential Information
5.466
5.467
5.468
(iv) Protection of Business Secrets and Confidential Information
5.469
5.470
5.471
5.472
5.473
5.474
5.475
(v) Use of the Information/Access to Documents
5.476
5.477
(j) Reply to the SO and Oral Hearing
(i) Reply to the SO
5.478
5.479
(ii) Oral Hearing
5.480 Attendees
5.481 Preparation
(iii) Conduct of the Hearing
5.482
5.483
5.484
5.485
5.486 Post-Hearing Report
(k) The Post-SO/Oral Hearing Stage
(i) Final State of Play Meetings
5.487
5.488
(ii) Peer Review Panel
5.489
5.490
5.491
5.492
5.493
(iii) Advisory Committee
5.494
5.495
5.496
5.497
5.498
(l) Decision
5.499
5.500
5.501
5.502
(m) Notification and Publication
5.503
5.504
(n) Post-Decision Remedies Process
5.505
(8) The Simplified Procedure
(a) Overview and Rationale
5.506
5.507
5.508
(b) The Commission’s Discretion in Applying the Simplified Procedure
5.509
(c) Use of the Simplified Procedure in Practice
5.510
(d) Impact of the Simplified Procedure on Deadlines
5.511
(e) The Scope of the Simplified Procedure: Categories of Suitable Cases
(i) Five Categories of Suitable Cases
5.512
5.513
5.514
5.515
5.516
5.517
5.518
5.519
5.520 Exclusions
(f) Procedural Aspects
5.521
5.522
5.523
5.524
5.525
5.526
(g) Decision
5.527
5.528
(9) Abandonment of a Concentration, Withdrawal and Re-submission of a Notification, Change of an Authorized Transaction
(a) Abandonment
5.529
(b) Withdrawal of a Notification
5.530
(c) Change in the Transaction Structure
5.531
(10) Particular Procedures
5.532
5.533
(a) Interim Measures
(i) General
5.534
5.535
(ii) Conditions Necessary for the Imposition of Interim Measures
5.536
5.537
(iii) Scope of Interim Measures
5.538
5.539
5.540
5.541 Process
(b) Revocation of a Clearance Decision
5.542
5.543
(c) Inspections and Requests for Information by Decision
5.544
5.545
5.546
5.547
(d) Imposition of Fines and Periodic Penalties
(i) Fines
5.548
5.549
5.550
5.551
5.552
5.553
(ii) Periodic Penalty Payments
5.554
5.555
E Substantive Assessment
(1) Main Elements of the Assessment under Article 2 of the Merger Regulation
5.556
(a) ‘A concentration’
5.557
5.558
(b) ‘which would’
5.559
5.560
5.561
(c) ‘impede effective competition’
5.562
5.563
5.564 Intermediate and Ultimate Consumers
(ii) Concept of Consumer Welfare
5.565
5.566
5.567
(d) ‘significantly’
5.568
5.569
5.570
5.571
5.572
5.573
5.574
5.575
5.576
(e) ‘in the common market or in a substantial part of it, ’
5.577
5.578
5.579
5.580
(f) ‘in particular as a result of the creation or strengthening of a dominant position.’
5.581
5.582
5.583
5.584
5.585
5.586
(2) Definition of the Relevant Market
5.587
5.588
5.589
5.590
(a) Relevant Product Market
5.591
5.592
(i) Demand-Side Substitution
5.593
5.594
(ii) Supply-Side Substitution
5.595
5.596
5.597
5.598
5.599
5.600
5.601
(b) Relevant Geographic Market
5.602
5.603
5.604
5.605
5.606
(i) Defining the Geographic Market on the Basis of Location of Customers or Producers
5.607
5.608
5.609
5.610
5.611
(c) The SSNIP Test and Critical Loss Analysis
5.612
5.613
5.614
5.615
5.616
5.617
(d) Price Discrimination Markets
5.618
5.619
5.620
5.621
5.622
5.623
5.624
5.625
(e) Factors Relevant to Market Definition and Types of Evidence Relied On
5.626
5.627
5.628
5.629
(i) Views on Functionality
5.630
5.631
5.632
5.633
5.634
(ii) Commercial Strategies and Marketing Material
5.635
5.636
5.637
(iii) Analysis of Price Levels
5.638
5.639
5.640
5.641
5.642
5.643
5.644
(iv) Analysis of Price Correlation
5.645
5.646
5.647
5.648
5.649
5.650
5.651
5.652
5.653
(v) Event Analysis
5.654
5.655
5.656
(f) Market Definition for Merger Cases and Antitrust Cases are Similar but Distinct
5.657
5.658
5.659
5.660
(g) Is Market Definition Really Necessary in an Effects-Based Analysis?
5.661
5.662
5.663
5.664
5.665
(3) Analysis of the Effects of a Concentration
5.666
(a) The Move to a More Effects-Based Approach
5.667
5.668
(b) Gravitation Towards Unilateral Horizontal Effects
5.669
5.670
5.671
5.672
5.673
5.674
(c) Increasingly Complex Assessments
5.675
5.676
5.677
5.678
5.679
(4) Horizontal Mergers
(a) Non-Coordinated Effects (Unilateral Effects)
(i) Market Share Thresholds
5.680
5.681
(i) Which Market Shares are Relevant for the Assessment?
5.682
5.683
(ii) Market Shares Indicating a Lack of Substantive Concern
5.684
5.685
5.686
(iii) Market Shares Indicating a Likelihood of Substantive Concerns
5.687
5.688
5.689
5.690
(ii) Intervention Thresholds: Removal of a Significant Competitive Constraint
5.691
5.692
5.693
5.694
5.695
5.696
5.697
5.698
5.699
(iii) Assessment of Effect: Additional Factors
5.700
5.701
5.702
(iv) Differentiated Product Markets: Closeness of Competition
5.703
5.704
5.705
5.706
5.707
5.708
(i) Views of the Market Participants
5.709
5.710
5.711
5.712
5.713
5.714 Internal Documents
(iii) Bidding Data
5.715
5.716
5.717
5.718
5.719
(iv) Switching Data
5.720
5.721
(v) Price Analysis
5.722
5.723
(vi) Cross-Price Elasticities
5.724
5.725
(vii) Modelling the Market
5.726
5.727
5.728
5.729
(v) Homogeneous Product Markets: Capacity
5.730
5.731
5.732
5.733
5.734
5.735
(vi) Multi-Sourcing
5.736
5.737
(vii) Ability to Hinder Expansion
5.738
5.739
5.740
5.741
5.742
5.743
5.744
5.745
(viii) Merger with a Potential Competitor
5.746
5.747
5.748
5.749
5.750
5.751
5.752
5.753
5.754
(ix) Buyer Power Created by the Merger
5.755
5.756
5.757
5.758
5.759
5.760
5.761
5.762
5.763
(b) Coordinated Effects
(i) Concept and History
5.764
5.765
5.766
(i) Collective Dominance Under the 1989 Merger Regulation
5.767
5.768
(ii) The Airtours Benchmark
5.769
5.770
(iii) The SONY/BMG Jurisprudence
5.771
5.772
5.773
5.774
5.775
5.776 Analytical Framework
5.777 The Airtours Criteria
(ii) The Approach Under the Horizontal Merger Guidelines
5.778
5.779
5.780
5.781
5.782 Creating Coordination or Strengthening Existing Coordination
(i) Creating Coordination
5.783
5.784
5.785
5.786
(ii) Strengthening Coordination
5.787
5.788
5.789
5.790
5.791 The Criteria for Coordination
5.792 Reaching Terms of Coordination (A Conducive Market Environment)
(ii) Monitoring Deviations
5.793
5.794
5.795
5.796
5.797
5.798
5.799
(iii) Adequate Deterrent Mechanisms
5.800
5.801
5.802
5.803
5.804
(iv) Reactions of Outsiders
5.805
5.806
5.807
5.808
5.809
(5) Non-Horizontal Assessment
(a) Non-Coordinated Effects (Unilateral Effects)
5.810
5.811
5.812
(i) Theories of Harm
5.813
5.814
5.815
5.816
(i) Example of Input Foreclosure: UTC/Goodrich
5.817
5.818
5.819
5.820
(ii) Example of Customer Foreclosure: Mobile Wallet Platform
5.821
5.822
5.823
5.824
5.825
(iii) Example of Conglomerate Effects: Intel/McAfee
5.826
5.827
5.828
5.829
(ii) Who is Entitled to Protection From the Potential Effects of Non-Horizontal Mergers?
5.830
5.831
5.832
5.833
5.834
5.835
(iii) Framework for Analysing Foreclosure
5.836
5.837
5.838
(i) Ability to Foreclose
5.839
5.840
5.841
5.842
5.843
Distinction between situation of sole control and joint control
5.844
5.845
5.846
(ii) Incentive
5.847
5.848
5.849
5.850
5.851
(iii) Effect
5.852
5.853
5.854
Efficiencies: The Importance of the Elimination of Double Mark-Ups
5.855
5.856
5.857
5.858
5.859
5.860 The Diminished Role of Dominance in Non-Horizontal Cases
(i) Dominance is Not Necessary
5.861
5.862
5.863
(ii) Effects May Come Faster Than Dominance
5.864
5.865
5.866
(b) Coordinated Effects
5.867
5.868 Reaching Terms of Coordination
5.869 Monitoring Deviations
5.870 Deterrent Mechanisms
(iv) Reactions From Outsiders
5.871
5.872
5.873
(6) Countervailing Factors
5.874
5.875
5.876
(a) Buyer Power
5.877
5.878
5.879
5.880
5.881
5.882
5.883 The Exercise of Buyer Power
(i) Immediately Switch Supplier
5.884
5.885
(ii) Vertically Integrate Upstream
5.886
5.887
5.888
5.889 Sponsor Entry
(iv) Refuse to Buy Other Products
5.890
5.891
5.892
(ii) Buyer Power Must Benefit All Customers
5.893
5.894
5.895
5.896
5.897
(b) Entry
5.898
5.899
(i) Types of Entry Barrier
5.900
5.901
(ii) Link Between Entry Barriers and Market Definition
5.902
5.903
5.904 Conditions for Entry to be Sufficient Countervailing Factor
(i) Entry Must Be Likely
5.905
5.906
History of entry
5.907
5.908
5.909
Market characteristics affecting whether entry would be attractive
5.910
5.911
5.912
5.913
Reaction from incumbents
5.914
5.915
(ii) Entry Must Be Timely
5.916
5.917
(iii) Entry Must Be Sufficient
5.918
5.919
5.920
(c) Efficiencies
5.921
5.922
5.923
(i) Historic Treatment of Efficiencies: The ‘Efficiency Offence’?
5.924
5.925
5.926
5.927
5.928
5.929
5.930
(ii) Recent Practice
5.931
5.932
5.933
5.934
5.935
5.936
5.937
5.938
5.939
5.940
5.941
(iii) Criteria for an Efficiency Defence
(i) Efficiencies Must Benefit Consumers
5.942
5.943
5.944
5.945
5.946
5.947
5.948
5.949
5.950
5.951
(ii) Efficiencies Must Be Merger-Specific
5.952
5.953
5.954
5.955
(iii) Efficiencies Must Be Verifiable
5.956
5.957
5.958
5.959
5.960
(d) Failing Firm Defence
5.961
5.962
(i) Conditions Necessary for Failing Firm Defence
5.963
5.964
5.965
5.966
5.967
5.968 Exit Due to Financial Difficulties
(ii) No Less Anti-Competitive Solution
5.969
5.970
(iii) Exit From the Market
5.971
5.972
(ii) Failing Division
5.973
5.974
5.975
(iii) Parties Must Provide the Evidence
5.976
5.977
5.978
5.979
F Remedies
(1) Overview
5.980
5.981
5.982
5.983
(2) General Principles
(a) Roles of Notifying Parties and Commission
5.984
5.985
5.986
5.987
(b) Attachment to Decision as Conditions or Obligations
5.988
5.989
5.990
(c) Distinction Between Remedies, ‘Take-Note’ Commitment, and Facts Taken Into Account
5.991
(i) Take-Note Commitments
5.992
5.993
(ii) Facts Taken Into Account
5.994
5.995
5.996 Potential Remedy for Breach
(3) Conditions That Remedies Must Meet
5.997
(a) Remedies Must Eliminate the Competition Concerns
5.998
5.999
(b) Remedies Must Be Proportionate
5.1000
5.1001
5.1002
5.1003
5.1004
(c) Remedies Must Be Capable of Effective Implementation
5.1005
(i) Timely Implementation
5.1006
5.1007
5.1008
5.1009
(ii) Lasting and Workable Solution
5.1010
5.1011
(iii) Capable of Adequate Monitoring
5.1012
5.1013
(d) Remedies Must Not Lead to New Competition Concerns
5.1014
(4) Remedies in Phase I and Phase II
5.1015
(a) Phase I Remedies
(i) Substantive Requirements
5.1016
5.1017
(ii) Formal Requirements
5.1018
5.1019
5.1020
5.1021
(iii) Timing
5.1022
5.1023
(iv) Assessment Process
5.1024
5.1025
5.1026
5.1027
5.1028
(v) Modifications
5.1029
5.1030
5.1031
(vi) Outcome
5.1032
5.1033
(b) Phase II Remedies
(i) Substantive Requirements
5.1034
5.1035
5.1036
5.1037 Formal Requirements
(iii) Time Limits
5.1038
5.1039
5.1040
5.1041
5.1042 Assessment Process
(v) Modifications
5.1043
5.1044
(vi) Outcome
5.1045
5.1046
(5) Types of Remedies
(a) Typology and Terminology
5.1047
5.1048
5.1049
(b) Acceptability of the Various Categories
5.1050
5.1051
5.1052
5.1053
5.1054
(c) Divestiture of a Business
(i) Overview
5.1055
5.1056
5.1057
(ii) Purpose
5.1058
5.1059
(iii) Divestiture of a Viable and Competitive Stand-Alone Business
5.1060
5.1061
5.1062
5.1063
5.1064
5.1065
5.1066
(iv) Carve-Out Divestitures
5.1067
5.1068
5.1069
5.1070
5.1071 Alternative to Carve-Outs
(vi) Alternative Divestitures: Crown Jewels
5.1072
5.1073
5.1074
5.1075 Suitable Purchaser
(i) Standard Requirements
5.1076
5.1077
(ii) When a Suitable Purchaser Must Be Identified
5.1078
5.1079
5.1080
(a) When a Suitable Purchaser Must Be Identified
(b) When a Suitable Purchaser Must Be Identified
5.1081
5.1082
(d) Removal of Links with Competitors
5.1083
5.1084
5.1085
(a)
(b)
(c)
(e) Access Remedies
5.1086
5.1087
5.1088
5.1089
5.1090
(f) Commitments to Enter Into, Modify, or Terminate Long-Term Agreements
5.1091
5.1092
5.1093
5.1094
(g) Conduct Remedies in Conglomerate Cases
5.1095
(h) Other Conduct Remedies
5.1096
5.1097
(6) Implementation and Modification of Remedies Post-Decision
(a) Implementation of Remedies
(i) Timing
5.1098
5.1099
(ii) Obligations of the Parties in the Interim Period
5.1100
5.1101
(iii) Hold-Separate Manager
5.1102
5.1103
(iv) Monitoring Trustee
5.1104
5.1105
5.1106
5.1107 Proposal for a Suitable Purchaser
(vi) Divestiture Trustee
5.1108
5.1109
5.1110
(b) Modification of Remedies Post-Decision
5.1111
(i) Extension of First Divestiture Period
5.1112
5.1113
(ii) Other Modifications Requested by the Parties
5.1114
5.1115
5.1116 Other Modifications Requested by the Commission
(c) Breach of Remedies
5.1117
(i) Breach of Obligations
5.1118
5.1119
(ii) Breach of Conditions
5.1120
5.1121
5.1122
(iii) Fines
5.1123
5.1124
G Judicial Review
(1) Introduction
5.1125
5.1126
5.1127
5.1128
(2) Types of Acts That Can Be Reviewed
5.1129
5.1130
5.1131
5.1132
5.1133
5.1134
5.1135
5.1136
(3) Legal Standing in Actions for Annulment
5.1137
(a) Member States, Parliament, and Council
5.1138
(b) Natural and Legal Persons
5.1139
5.1140
5.1141
5.1142
5.1143
5.1144 The Notifying Parties
5.1145 Other Parties to the Concentration
(iii) Third Parties
5.1146
5.1147
5.1148
5.1149
5.1150
(4) Grounds for Challenge
5.1151
(a) Lack of Competence
5.1152
(b) Infringement of an Essential Procedural Requirement
5.1153
5.1154
5.1155
5.1156
5.1157
5.1158
5.1159
5.1160
5.1161
(c) Infringement of the Treaties or of Any Rule of Law Relating to Their Application
5.1162
(d) Misuse of Powers
5.1163
(5) Procedure
(a) General
5.1164
5.1165
5.1166
5.1167
5.1168
5.1169
(b) Interim Measures
5.1170
5.1171
5.1172
5.1173
5.1174
(c) Expedited Procedure
5.1175
5.1176
5.1177
(d) Appeals from the General Court to the Court of Justice
5.1178
5.1179
5.1180
5.1181
(6) The Scope of Review
(a) Introduction
5.1182
5.1183
(b) Burden of Proof
5.1184
5.1185
5.1186
5.1187
(c) Standard of Proof
5.1188
5.1189
(d) Standard of Review: The Margin of Appreciation
5.1190
5.1191
5.1192
5.1193
5.1194
(e) Full Jurisdiction Over Fines and Periodic Penalty Payments
5.1195
5.1196
(7) Consequences of Annulment
(a) Introduction
5.1197
5.1198
5.1199
(b) The New Examination
5.1200
5.1201
5.1202
(8) Actions for Damages
(a) Introduction
5.1203
5.1204
(b) Unlawful Conduct
5.1205
5.1206
5.1207
5.1208
(c) Harm
5.1209
(d) Causal Link
5.1210
6 Article 106—Exclusive or Special Rights and other Anti-Competitive State Measures
Preliminary Material
A Introduction
6.01 Competition Law Normally Deals Only With the Behaviour of Undertakings
6.02 State Defence Doctrine
6.03 State Liability Under Competition Law
B Application of Articles 4(3) and 3(3) TEU and Articles 101 and 102 TFEU to Anti-Competitive State Measures
6.04 Initial Position (Broad Interpretation)
6.05 Court Narrows Interpretation
(iii) Impact of the Lisbon Treaty
6.06
6.07
6.08 Application of Articles 106, 107, and 108 to Anti-Competitive State Measures
C Article 106(1): State Measures in Respect of Public or Privileged Undertakings
(1) Addressees and Regulatory Content
6.09
(2) State Measures
6.10
6.11 Formal Criteria Are Not Decisive in Defining ‘State Measures’
6.12 The Function of the Act is the Decisive Factor in Defining ‘State Measures’
6.13 The Form of the Act Creates a Presumption, But Its Function is the Decisive Criterion in Defining It as a ‘State Measure’
6.14 State Measures May Be Adopted By Any Type of Public Authority
(3) Related to Public or Privileged Undertakings
6.15
(a) ‘Economic Activity’
6.16 Article 106(1) Applies to State Regulation of Economic Activities
6.17 Definition of ‘Economic Activity’
(iii) Criteria Used By the Court of Justice
6.18
6.19
6.20
6.21
6.22
6.23
6.24
6.25
6.26 ‘Public’ Undertaking
6.27 Definition of Public Undertaking
6.28 A Separate Legal Entity is Not Necessary
6.29 Public Undertakings After Privatization
6.30 ‘Privileged’ Undertakings
(b) Exclusive Rights
(i) Notion of ‘Exclusive Right’
6.31
6.32
6.33 Exclusive Right and Dominant Position are Different Things
6.34 Exclusive Rights are Created by State Measures
(iv) Need for a Discretionary Decision by the State
6.35
6.36
(v) Special Rights
6.37
6.38
6.39
6.40
6.41
(c) The Connection Between the Measure and the Undertaking
(i) Types of Connection Required by Article 106(1)
6.42
6.43
(a) Types of Connection Required by Article 106(1)
(b) Types of Connection Required by Article 106(1)
(c) Types of Connection Required by Article 106(1)
6.44 State Measures Which Benefit the Undertaking
6.45 State Measures Which Use the Undertaking as an Instrument
(iv) State Measures Granting an Exclusive Right
6.46
6.47
6.48 The Dual Role of Exclusive Rights Within Article 106(1)
6.49 General Measures Do Not Fall Under Article 106(1)
(4) Contrary to Another Provision of the TFEU
6.50
6.51
6.52
(5) Article 106(1) in Combination with the Competition Rules Addressed to Undertakings
6.53
(a) Article 106(1) in Combination with Article 102
6.54
(a)
(b)
(c)
6.55 Dominant Position
6.56 State Measures Leading to Actual Abusive Behaviour of the Undertakings
(iii) Different Types of Abuse
6.57
6.58
6.59 Only the State is Responsible for State-Imposed Abuses
6.60 Both the State and the Undertaking are Liable for State-Induced Abuses
6.61 State Inactivity
(b) State Measures Affecting the Structure of Competition and Leading to Potential Abusive Behaviour of Undertakings
6.62 No Requirement for Actual Abuse
6.63 The Granting of Regulatory Powers to an Undertaking
6.64 The ‘Bundling’ of Regulatory and Commercial Activities
6.65 The Granting of an Exclusive Right
6.66 The Demand Limitation Doctrine
(vi) The Conflict of Interest Doctrine
6.67
6.68
6.69 Presumption of Causal Link
6.70 Effects Similar to Those of Abusive Behaviour
(ix) The Doctrine of the Extension of a Dominant Position
6.71
6.72
6.73
6.74
6.75
6.76
(x) The Automatic Abuse Doctrine
6.77
6.78
6.79
6.80
6.81
6.82 The La Crespelle Case
(xii) More Recent Cases
6.83
6.84
6.85
(xiii) The Current Status Quo
6.86
6.87
6.88
6.89
6.90
(xiv) Effect on Intra-EU Trade
6.91
6.92
(c) Article 106(1) in Combination with Article 101
6.93
6.94
6.95
6.96
6.97
(6) Article 106(1) in Combination with the Treaty Rules Addressed to the Member States
(a) The Double Function of Article 106(1)
6.98
6.99 Article 106(1) as a ‘Reminder’ of Prohibitions
(ii) ‘Lifting the Veil’
6.100
6.101
6.102
6.103
(b) Article 106(1) in Combination with the Rules on Free Movement of Goods: Articles 34 and 37
6.104
6.105
(i) The General Regime: Measures of Equivalent Effect and Article 34
6.106
6.107
6.108
6.109
6.110 The Special Regime: State Monopolies and Article 37
6.111 ‘State monopolies of a commercial character’
6.112 Obligations Contained in Article 37
(v) Obligations During the Transitional Period
6.113
6.114
6.115
6.116
(vi) Obligations After the Transitional Period
6.117
6.118
6.119
6.120
6.121
6.122
6.123
(vii) The Borderline Between the General and Special Regimes
6.124
6.125
(c) Article 106(1) in Combination with the Rules on Freedom to Provide Services and on Establishment: Articles 49 and 56
6.126
(i) Article 106(1) in Combination with Article 56
6.127
6.128
(ii) Article 106(1) in Combination with Article 49
6.129
6.130
6.131
6.132
6.133 Obligation to Select the Operator of a Public Service Concession Through a Competitive Tender
6.134 Need for a Cross-Border Element
(7) Direct Effect
6.135
D Article 106(2): Services of General Economic Interest and Other Public Interest Objectives
6.136
6.137
(1) The Undertakings to which Article 106(2) Relates
6.138
(i) Undertakings
6.139
6.140
(ii) Undertakings Entrusted With the Operation of Services of General Economic Interest
6.141
6.142
6.143
(iii) Services of General Economic Interest
6.144
6.145
6.146
6.147
6.148
6.149
6.150
6.151
6.152
6.153
6.154
(iv) Entrustment
6.155
6.156
6.157
6.158
6.159
6.160
6.161
6.162 Revenue-Producing Monopolies
(2) Article 106(2) as an Exception Applicable to the Behaviour of Undertakings and to State Measures
6.163
6.164
6.165
6.166
(3) Conditions for the Application of Article 106(2)
6.167
6.168 The Necessity of the Measure
(ii) The Proportionality Principle
6.169
(a) The Proportionality Principle
(b) The Proportionality Principle
(c) The Proportionality Principle
6.170
6.171
6.172
6.173
6.174
6.175 The Old Approach: A Strict Interpretation of the Proportionality Test
(iv) The Need for a More Flexible Interpretation
6.176
6.177
(v) Universal Service as a Justification for Exclusive Rights
6.178
6.179
6.180
6.181
6.182
6.183
(vi) The Corbeau Case
6.184
6.185
6.186
6.187
(vii) The Almelo Case
6.188
6.189
6.190
6.191
6.192
(viii) Other Cases
6.193
6.194
6.195
6.196
6.197
(ix) Case law of the General Court
6.198
6.199
6.200
6.201
6.202
6.203
6.204
6.205
6.206
6.207 Need for an Economic Analysis
6.208 The Dynamic Character of Proportionality
6.209 Different Approaches Depending on the Sector
(xiii) The Strict Approach and the Flexible Approach
6.210
6.211
6.212 Universal Services and Other Services of General Economic Interest
6.213 Examples of Measures Considered Non-Proportional
(xvi) The Interest of the EU
6.214
6.215
(4) Invocation of Article 106(2) and Burden of Proof
6.216
6.217
(5) Relationship between Article 106(2) and Other Exceptions
(i) ‘Mandatory Requirements’ Within the Framework of Article 106(2)
6.218
6.219
6.220
6.221 Article 101(3)
(6) Relationship between Article 106(2) and Article 14
6.222
6.223
6.224
6.225
6.226
6.227
E Article 106(3): Procedural Rules Applying to Anti-Competitive State Measures
6.228
(1) Article 106(3) Decisions
6.229 General Issues
6.230 Analogy With Other Procedures
(iii) Discretionary Character of the Procedure Under Article 106(3)
6.231
6.232
6.233
6.234
6.235
6.236 Lodging of Complaints and Ex Officio Cases
(v) Dismissal of Complaints
6.237
6.238
6.239
6.240
6.241
(a) The Infringement Procedure
6.242 Interim Measures
6.243 Letter of Formal Notice
6.244 The Rights of the Member State and of the Undertaking that Benefits from the Measure
6.245 End of the Procedure Without a Formal Decision
(v) The Formal Decision and Its Effects
6.246
6.247
6.248 Binding Effects
6.249 Action for Annulment Against an Article 106(3) Decision
(viii) Action for Failure to Implement an Article 106(3) Decision
6.250
6.251
(2) Article 106(3) Directives
(i) Preventive Functions of Article 106(3) Directives
6.252
6.253
6.254
6.255
6.256 Article 106(3) Directives as Instruments for Detecting Future Infringements
(iii) Article 106(3) Directives as Instruments for ‘Specifying’ the Provisions of the Treaty
6.257
6.258
6.259
(3) Legal Regime of Article 106(3) Directives
6.260 The Exclusive Competence of the Commission
6.261 Limits to the Commission’s Competence
6.262 Article 106(3) Directives Cannot Deal With the Autonomous Behaviour of Undertakings
(iv) Formal Limits to the Commission’s Power under Article 106(3)
6.263
6.264
6.265 Binding Effects
6.266 Lack of Direct Effect
6.267 Relationship Between Directives Under Article 106(3) and Harmonizing Directives
6.268 Article 106(3) Overlaps With Other Treaty Provisions
(ix) Article 106(3) Overlaps with Article 14
6.269
6.270
6.271 The Dissuasive Role of Article 106(3)
Part II Specific Practices
7 Horizontal Cooperation Agreements
Preliminary Material
A Introduction
(1) Definition of Horizontal Agreements and Practices
7.01
(2) Background to Horizontal Agreements and Practices
7.02
7.03
7.04
7.05
7.06
B Assessment of Horizontal Cooperation Agreements under Article 101
(1) Purpose and Scope
7.07
7.08
7.09
7.10
7.11
7.12
7.13
7.14
7.15
7.16
7.17
(2) Framework of Analysis
7.18
7.19
7.20
7.21
7.22
7.23
7.24
7.25
7.26
7.27
7.28
C Joint Ventures Involving Joint Control
(1) Definition and Constitution of a Joint Venture
(a) Definition
7.29
(b) Constitution of a Joint Venture
7.30
7.31
7.32
7.33
7.34
7.35
7.36
(2) Distinction Between Cooperative and Concentrative Joint Ventures
7.37
7.38
(3) The Rationale Behind the Difference in Treatment Between Full-Function Concentrative and Full-Function Cooperative Joint Ventures
7.39
7.40
7.41
7.42
7.43
7.44
7.45
7.46
7.47
7.48
7.49
7.50
(4) The Application of Article 101(1) by the Commission to Cooperative Joint Ventures Prior to the Entry into Force of the 1997 Amendment to the First Merger Regulation
7.51
7.52
7.53
7.54
7.55
7.56
7.57
7.58
7.59
7.60
7.61
7.62
7.63
7.64
7.65
(5) The Notion and Role of Potential Competition in Assessing the Validity of Joint Ventures under Article 101
7.66
7.67
7.68
(a)
(b)
(c)
(d)
7.69
7.70
7.71
7.72
7.73
7.74
7.75
7.76
7.77
(6) Conditions Leading to the Incentive to Coordinate (Spillover Effects)
(a) Introduction
7.78
7.79
7.80
7.81
7.82
7.83
7.84
(b) Spillovers on the Same Market As That of the Joint Venture
7.85
7.86
7.87
7.88
7.89
7.90
7.91
(c) Spillovers on to Other Markets
7.92
(i) Spillovers on to Downstream Markets
7.93
7.94
(ii) Spillovers on to Adjacent Product Markets
7.95
7.96
7.97
7.98 Spillovers on to Adjacent Geographic Markets
(d) Network Effects
7.99
7.100
7.101
7.102
(7) Direct Contractual Restrictions Between Parents
7.103
7.104
(8) Intra-Group Agreements and Joint Ventures
7.105
7.106
7.107
7.108
7.109
7.110
7.111
7.112
7.113
7.114
7.115
7.116
7.117
7.118
7.119
7.120
7.121
7.122
(9) Spillovers under the Merger Regulation
7.123
7.124
7.125
7.126
7.127
7.128
7.129
7.130
7.131
7.132
7.133
(a)
(b)
(c)
7.134
7.135
7.136
7.137
7.138
7.139
7.140
7.141
7.142
(a)
(b)
(c)
(d)
(e)
D Research and Development Agreements
(1) Overview
7.143
7.144
(2) Horizontal Cooperation Guidelines
(a) Relevant Markets
7.145
7.146
7.147
7.148
(b) Calculation of Market Shares
7.149
7.150
7.151
7.152
7.153
(c) Competitive Assessment under Article 101(1)
7.154
7.155
7.156
7.157
(d) Competitive Assessment under Article 101(3)
7.158
(e) Time of Assessment
7.159
7.160
7.161
(3) The R&D BER
(a) Background and Overview
7.162
7.163
7.164
7.165
7.166
7.167
(b) Key Concepts of the R&D B