Eu Competition Law Compliance.
EU Competition Law Compliance
What is EU Competition Law?
EU Competition Law aims to ensure fair competition in the internal market of the European Union. It prohibits anti-competitive practices and abuses of dominant positions that may restrict trade and harm consumers or other businesses.
Core Principles and Legal Framework
Treaty on the Functioning of the European Union (TFEU) Articles 101 and 102 are the pillars of EU competition law.
Article 101 TFEU prohibits agreements between undertakings, decisions by associations, and concerted practices that may prevent, restrict or distort competition within the internal market.
Article 102 TFEU prohibits abuse of a dominant position by one or more undertakings within the internal market or in a substantial part of it.
The European Commission enforces these rules, often imposing fines and requiring remedies.
1. Article 101 TFEU: Prohibition of Anti-Competitive Agreements
Explanation:
Agreements or concerted practices between companies that restrict competition, such as price-fixing, market sharing, output limitation, or collusion, are prohibited.
Some agreements may be exempted if they contribute to improving production or distribution, or promote technical or economic progress, without eliminating competition.
Relevant Case Law:
Case 48/69 Imperial Chemical Industries Ltd v Commission (Dyestuffs case)
Established that agreements that have the object or effect of restricting competition are prohibited, regardless of actual effects.
2. Article 102 TFEU: Abuse of Dominant Position
Explanation:
It prohibits companies holding a dominant market position from abusing it. Abuse can include predatory pricing, refusal to supply, unfair trading conditions, or tying products.
Dominance itself is not illegal, but abusive conduct is.
Relevant Case Law:
Case 27/76 United Brands v Commission
Defined market dominance and set criteria to determine abuse, emphasizing the importance of market definition.
3. Merger Control and Notification
Explanation:
Mergers or acquisitions that significantly impede effective competition must be notified and can be prohibited or subjected to conditions.
Regulation 139/2004 (EC Merger Regulation) governs this area.
Relevant Case Law:
Case T-102/96 Gencor Ltd v Commission
Reinforced that mergers harming competition in the EU market can be blocked.
4. Vertical Agreements and Block Exemptions
Explanation:
Vertical agreements (e.g., between manufacturers and distributors) may restrict competition but can qualify for block exemptions under certain conditions.
EU regulations define when these agreements are permissible.
Relevant Case Law:
Case C-67/13 Groupement des cartes bancaires (CB)
Clarified the scope of vertical agreements and block exemptions related to card payment systems.
5. Private Enforcement and Damages
Explanation:
Injured parties can seek damages in national courts for breaches of EU competition law.
EU Directive 2014/104/EU harmonizes rules on antitrust damages actions.
Relevant Case Law:
Case C-360/09 Pfleiderer AG v Bundeskartellamt
Clarified the rights of private parties to claim damages for breaches of competition law.
6. Procedural Rights and Leniency Programs
Explanation:
Companies have rights during investigations, including defense and access to file.
Leniency programs encourage cartel participants to come forward in exchange for reduced fines.
Relevant Case Law:
Case C-204/00 Aalborg Portland A/S v Commission
Confirmed procedural rights for companies during Commission investigations.
Summary Table of Key Points and Cases
| Aspect | Legal Basis | Key Case Law | Importance |
|---|---|---|---|
| Anti-competitive agreements | Article 101 TFEU | Imperial Chemical Industries (Dyestuffs) | Broad definition of anti-competitive agreements |
| Abuse of dominant position | Article 102 TFEU | United Brands | Market dominance & abuse explained |
| Merger control | EC Merger Regulation | Gencor Ltd | Power to block harmful mergers |
| Vertical agreements | Block Exemptions | Groupement des cartes bancaires | When vertical restrictions allowed |
| Private enforcement | Directive 2014/104/EU | Pfleiderer AG | Right to damages for breaches |
| Procedural fairness | General procedural law | Aalborg Portland | Companies' rights during investigation |
Compliance Tips for Businesses:
Conduct thorough market analysis to avoid dominance abuse.
Avoid agreements that fix prices, limit output, or share markets.
Notify mergers/acquisitions when thresholds are met.
Use legal counsel to review contracts for vertical restrictions.
Train employees about competition law risks.
Cooperate with regulators and consider leniency programs if involved in cartels.
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