110302 introduction and general aspects eu competition law

8/2/2019 110302 Introduction and General Aspects EU Competition Law

1/42

EU COMPETITION LAW

Introduction to Course and

General Considerations

Ctlin Grigorescu, LL.M.Eur

Cristina Mihai

02.03.2011

l 1


2/42

Overview

1. Introduction to the course

2. General aspects of Competition Law

The Structure of EU Competition Law

The Relationship between EU and National Competition Law

3. Relevant institutions in competition-related matters

4. Bibliography

5. Case law regarding the next courses topic

l 2


3/42

1. Introduction to the course | Objectives

Course objectives:

Understanding the main policy areas of EU Competition Law

Acknowledging the importance and the positive effects of the

Competition Policy

Analysing the activity of the institutions involved in competition

related matters and their case law

Underlining the main differences between the EU CompetitionLaw and the Romanian Competition Law

l 3


4/42

1. Introduction to the course | Structure

Topics to be discussed during following meetings:

Agreements and concerted practices

Market power and dominance issues in Europe

Merger control

European enforcement and investigation procedure

Procedure of enforcement by National Competition Authoritiesand National Courts

General aspects of Romanian Competition Law

l 4


5/42

1. Introduction to the course | Scope

The purpose of competition law:

Enhancing consumer welfare

Ensuring an efficient allocation of resources

Protecting the interests of consumers, by taking direct action

against offending undertakings (e.g. requiring dominant firms to

reduce their prices) Promoting economic equity rather than economic efficiency by

protecting small undertakings against more powerful rivals

(small undertakings should be given a fair chance to succeed)

Achieving single market integration (by EU competition law)

l 5


6/42

2. General aspects on the Competition Law

l 6

Source: http://en.wikipedia.org/wiki/Treaty_of_Lisbon


7/42

| EU Competition Law Origins Treaty establishing the European Economic Community (EEC

Treaty), in force since 1958

| Current Relevant EU Legislation

Essential provisions: Treaty on the Functioning of the European Union (TFEU)

Articles 101 109 (former Articles 81 89 of the EC Treaty) Article 101 collusion that restricts competition Article 102 abuse of dominant position Articles 107 109 aids granted by states

Articles 103 and 352 and the Council Regulation (EC) No.139/2004 on the control of concentrations between undertakings

economic concentrations

l 7

2. General aspects on the Competition Law | 2


8/42

l 8

| Current Relevant EU Legislation

Secondary Legislation

Council Regulation (EEC) No. 2821/71 on application of Article 85 (3)of the Treaty to categories of agreements, decisions and concertedpractices

Council Regulation (EC) No. 1/2003 on the implementation of therules on competition laid down in Articles 81 and 82 of the EC Treaty

Council Regulation (EC) No. 139/2004 on the control ofconcentrations between undertakings (Merger Regulation)

Commission Regulation (EU) No. 330/2010 on the application of

Article 101 (3) of TFEU to categories of vertical agreements andconcerted practices Other regulations, guidelines and notices



9/42


| Current Relevant Romanian Legislation

Essential provisions: Competition Law No. 21/1996 Fundamental Articles: 5, 6 and 10-15

Secondary Legislation EU Councils and Commissions Block Exemption Regulations

(integrated in Romanian law by reference in art. 5 (3) of Law No. 21/1996) Competition Councils Regulation on economic concentrations (OrderNo. 385/2010)

Competition Councils Guidelines on the commitments in the field ofeconomic concentrations (Order No. 688/2010)

Competition Councils Guidelines on the requirements, terms and

procedure for accepting and assessing commitments in case ofanticompetitive practices (Order No. 724/2010)

Other orders, regulations and guidelines issued by the CompetitionCouncil

l 9


10/42


| Applicability of the EU Relevant Legislation

Regulations General applicability

Fully binding

Direct applicability

Full (both horizontal and vertical) direct effect (usually)

Decisions Individual applicability (usually)

Fully binding

Direct enforceability Direct effect (only vertical C-156/91 Hansa Fleisch [1992], para

13- 15)

l 10


11/42


Guidelines and notices Not mandatory Must be taken into consideration by national courts

The guidelines and notices indicate the Commissions view on variousmatters relating to the application of the competition rules, and do notform part of the competition legal framework

However, in certain circumstances, the general guidelines and notices

may produce legal effects: In adopting such rules of conduct and announcing by publishing them that

they will henceforth apply to the cases to which they relate, the institutionin question imposes a limit on the exercise of its discretion and cannotdepart from those rules under pain of being found, where appropriate, tobe in breach of the general principles of law, such as equal treatment orthe protection of legitimate expectations. It cannot therefore be precludedthat, on certain conditions and depending on their content, such rules ofconduct, which are of general application, may produce legal effects(Joined Cases C-189/02 Dansk Rrindustri [2005], para 211)

l 11


12/42

Main policy areas:

AntitrustThe following are prohibited: Agreements between two or more undertakings which restrict, by object or

effect, the competition (article 101 of TFEU) e.g. cartels Abuse of dominant position (article 102 of TFEU)

MergersMergers are examined in order to determine the extent to which theyrestrict effective competition in the EU Articles 103 and 352 of TFEU Merger Regulation

State Aid

Government interventions are controlled so that they do not interferewith the smooth functioning of the internal market or harm thecompetitiveness of EU companies Articles 103 109 of TFEU

l 12

2. General aspects on the Competition Law |

The Structure of EU Competition Law


13/42


Relations between EU and National Competition Law

General rule: EU Competition Law applies in all cases where anagreement or practice may affect trade between Member States

Commission Notice 2004/C 101/07 Guidelines on the effect on trade

concept contained in Articles 81 and 82 of the Treaty currently

Articles 101 and 102 of TFEU

trade covers all cross-border economic activity includingestablishment

between Member States involves at least two Member

States

may affect implies that it must be possible to foresee with asufficient degree of probability that the agreement or practice

may have an influence, direct or indirect, actual or potential, on

the patterns of trade between Member States

l 13


14/42


Relations between EU and National Competition Law | 2

Agreements have to be capable of appreciably affecting trade

between Member States. This requirement is not met when:

The aggregate market share of the parties on any relevant market

within the Community affected by the agreement does not exceed

5% AND

In case of horizontal agreements, the aggregate annual

Community turnover of the undertaking concerned in the productscovered by the agreement does not exceed EUR 40 million

l 14


15/42



Relevant factors in determining the effect on trade(none of which individually is necessarily decisive)

The nature of the goods or services covered by the agreement orpractice, being sufficient that the products concerned are traded, orlikely to be traded, between Member States. The effect is more readilyestablished where, by their nature, the products are easily tradedacross boarders or are important for undertakings which want to enter

the market in another Member State The characteristics of the agreement or practice. An effect on trade

between Member States will normally be presumed where anagreement or practice directly relates to international transactions,especially if it restricts imports or exports, or where it applies to morethan one Member State or throughout the Community or establishes aCommunity-wide distribution system

The legal and factual environment in which the agreement or practiceoperates

l 15


16/42



Trade between Member States may be affected in case the

agreement or conduct:

Has or is capable of having as effect: Alteration of the pattern of trade

Partition of the market

Alteration of the structure of competition

The effect may be either direct or indirect (affecting, for

example, a raw material for a product which is traded between

Member States, even if the raw material by itself is not

affected)

And the generated effect is appreciable (de minimis principle)

l 16


17/42

Parallel application

Article 103 (2,e) of TFEU Articles 3 (1) and 16 of Regulation 1/2003

Broadly, a national authority or court must not take a decision which runscounter to the decision taken by the Commission

National courts can apply Articles 101 and 102 of TFEU without it beingnecessary to apply national competition law in parallel. However, where anational court applies national competition law to agreements, decisions orpractices which may affect trade between Member States within the meaningof Article 101 (1) of TFEU or to any abuse prohibited by Article 102 of TFEU,they also have to apply Community competition rules to those agreements

Whether or not the legal concepts established in the national legal provisionsreflect the Community concepts of undertakings, agreements, concerted

practices or abuses, it is the Community concepts which the nationalcompetition authority or national court must overlay upon its national law

l 17




18/42

Convergence rule

Article 3 (2,3) of Regulation 1/2003

Under Article 101 of TFEU there is a duty to arrive at a consistentresult under national law: Where an agreement may affect trade between Member States,

the application by a national authority of the national competition

law must not operate to prohibit an agreement:- If it does not restrict competition within the meaning of Article

101 (1) of TFEU

- If it fulfils the conditions of Article 101 (3) of TFEU OR

- If it is covered by a block exemption

Where the agreement falls outside Article 101 (1) of TFEU,because it has no effect on trade between Member States, theconvergence rule is not engaged and there is no restriction on theapplication of the national competition law

l 18




19/42



Convergence rule (2)

Under Article 102 of TFEU, national competition authorities are

not precluded from adopting and applying on their territory

stricter national laws which prohibit or sanction unilateral

conduct engaged by undertakings

The convergence rule does not apply when the national

authorities apply national merger control law or provisions of

national law that predominantly pursue an objective different

from that pursued by Articles 101 and 102 of TFEU

l 19


20/42

Cooperation

Chapter IV Cooperation of Regulation 1/2003 Network Notice relating to cooperation and exchange of information

between the Commission and the national competent authorities

Notice on cooperation between the Commission and the national courts

The Commission has a duty of sincere co-operation with the national

court (Case C-2/88 Zwartveld [1990], para 10)

Equally, national courts may be obliged to assist the Commission in

the fulfilment of its tasks and to avoid adopting measures that could

jeopardise the Commissions function

l 20




21/42

Consistency

Article 16 of Regulation 1/2003 Notice on cooperation between the Commission and the national courts

National courts decisions under Articles 101 and 102 of TFEU have to

be consistent with the Commissions decisions. National courts can

never take a decision running counter to that of the Commission The Commission is entitled to adopt decisions under Articles 101 and

102 of TFEU which may conflict with the national courts decision

The consistency rule is necessary for: securing fairness in the particular case pending before the Commission

and the national court securing the equal treatment of parties in similar or related circumstances

l 21




22/42

Institutions tasked with applying EU competition law

European Commission > Directorate-General of Competition

Community Courts Court of Justice

General Court (former Court of First Instance)

National Competition Authorities (together with the European

Commission form the European Competition Network) and

National Courts

l 22

3. Relevant institutions in competition related matters


23/42

European Commission

Charged with ensuring that the provisions of TFEU, and themeasures taken pursuant thereto, are applied

The Commission is of central importance to the enforcement of

Community Competition Law

The main departments of the Commission relevant in thecompetition field are: Secretariat-General ensures the overall coherence of the

Commissions work

Legal Service advises the Commission, checks on the legality of

its decisions and represents the Commission in the Court of Justiceand the General Court

Directorate-General of Competition

l 23

3. Relevant institutions in competition related matters | 2


24/42


Directorate-General of Competition Mission

Enforces the competition rules through: Investigation and decision, taking direct enforcement action

against companies and governments when it finds evidence of

unlawful behaviour, mainly by:- Obtaining from undertakings all necessary information either by

simple request or decision

- Conducting all necessary inspections in order to perform its duties Commission officials may carry out inspection either under an

authorisation of the Commission or under a formal decision, with or

without prior notice (Dawn Raids) to the undertakings involved

- Closing its file on a case by accepting legally binding

commitments from undertakings- Taking decisions against undertakings in case of infringements of

the competition rules

- Imposing fines either as a result of the conduct of the undertakingduring the investigation or as a result of an undertaking infringing

Articles 101 (1) and/or 102 of TFEU

l 24


25/42


Directorate-General of Competition Mission (2)

And enforces the competition rules through:

Legislation and guidance

- Has powers to participate in the shaping of legislative measures

enacted by the Council by initiating proposals for legislative acts- Has powers to enact Directives and Decisions under Article 106 (3) of

TFEU

- Under Article 105 (3) of TFEU, the Commission may adopt

regulations relating to block exemptions

- Issues notices and guidelines guidance for undertakings and

indicate the Commissions views on various competition matters (e.g.

De Minimis Notice, Guidelines on Vertical Restraints, Horizontal

Cooperation Guidelines, Relevant Market Notice)

l 25


26/42


Directorate-General of Competition Mission (3)

Takes decisions by which it declares a concentration compatible orincompatible with the common market

May fight mergers when they significantly reduce competition byrequiring the undertakings concerned to dissolve the merger

Helps direct state support more closely to improving competitivenessand/or reducing regional and social disparities and away from aidwhich distorts competition on the market without any compensatingbenefit

Works in partnership with other policies to support the delivery of otherpolicy objectives in a pro-competitive way at EU and national level

Works in partnership with national competition authorities and nationalcourts to ensure an effective and coherent application of EUcompetition law

Promotes the private enforcement of EU competition law, by providingguidance and transparency about competition rules and theirenforcement

l 26


27/42

Community Courts

There are two tiers of judicial decision-making in theCommunity: General Court

European Court of Justice

The judgments of the Community Courts are binding in matters

of law in all Member States

l 27



28/42

General Court

Formally known as the Court of First Instance Created in 1988 to help the European Court of Justice copewith the large number of cases brought before it

Is made up of at least one Judge from each Member State Sits in Chambers of three Judges (usually, in competition

cases) or five Judges (usually, in state aid and dumping

cases), but exceptionally in Grand Chamber (13 Judges) or fullcourt It normally operates without the assistance of an Advocate

General

l 28



29/42


The General Court has jurisdiction to hear:

Direct actions brought by natural or legal entities againstacts of the institutions, bodies, offices or agencies of the EUand against regulatory acts or against a failure to act on thepart of those institutions, bodies, offices or agencies, e.g. acase brought by a company against a Commission decision

imposing a fine on that company for review of the fine orannulment of the decision Actions brought by Member States against the Commission Actions brought by Member States against the Council

relating to acts adopted in the field of State aid, dumping

and acts by which it exercises powers of implementation Actions seeking compensation for damages caused by the

institutions of the EU or their staff

l 29


30/42


European Court of Justice

Consists of one judge from each Member State, assisted byeight Advocates General Sits in Chambers of five Judges usually in competition cases,

but exceptionally in Grand Chamber (13 Judges) or full court It acts as an appeal court against a decision of the General

Court on the grounds of lack of competence, breach of

procedure before the General Court or infringement ofCommunity law Under article 267 of the TFEU, the Court of Justice has

jurisdiction to give preliminary rulings, at the request of a courtof a Member State, concerning, inter alia, the interpretation ofTFEU and of the Treaty on European Union and of acts of theCouncil and the Commission

l 30


31/42


Institutions tasked with applying Romanian competition law

Competition Council National Courts

l 31


32/42


Competition Council Main Duties and Prerogatives

To take decisions in case of infringements of the CompetitionLaw no. 21/1996 or of the provisions of Articles 101 and 102 of

TFEU

To perform investigations for the application of certain

competition rules and of the provisions of Articles 101 and 102of TFEU, including preliminary investigations

To accept binding commitments from undertakings and to

impose temporary measures to undertakings

To take decisions concerning economic concentrations

To carry out the effective enforcement of its decisions

To carry out, at its own initiative, investigations aimed at a

better understanding of the market

l 32


33/42


Competition Council Main Duties and Prerogatives (2)

To supervise the enforcement of competition related legalprovisions and norms

To inform the Government about monopoly situations and to

propose the measures deemed necessary to remedy the

ascertained dysfunctions To give advisory opinion on the draft normative acts that may

have anti-competitive impact

To recommend to the Government to adopt measures

facilitating the market and competition development

To draw up studies and reports on its field of activity, and toinform the Government, the public and the specialised

international organizations about this activity

l 33


34/42


Competition Council Main Duties and Prerogatives (3)

To represent Romania and promote information andexperience exchanges in the relationships with specialised

international organizations and institutions, and to co-operate

with foreign and community competition authorities

To ensure the application of the provisions of the GovernmentEmergency Ordinance No. 117/2006 regarding national

proceedings in the state aid field

As a National Competition Authority, has all rights and

obligations provided by Regulation No. 1/2003 and Regulation

No. 139/2004 regarding economic concentrations ofundertakings

l 34


35/42


National Courts

Bucharest Court of Appeal Acts as an appeal court against the decisions or inspection orders of the

Competition Council or the regulations (in Romanian reglementri) issuedby the Competition Council in the application of the Law 21/1996

Cancels the act of a public authority or institution which led to therestriction, prevention or distortion of competition, compels public

authorities or institutions to issue an administrative act or to perform anadministrative operation, at the request of the Competition Council Gives authorisations for inspections in certain cases (e.g., inspection of

undertakings directors premises)

High Court of Cassation and Justice

Settles the appeals against the judgements of the Bucharest Court ofAppeal

l 35


36/42


National Courts

Special competence Bucharest Court of District 1 In case of sanctions applied by competition inspectors, the

minutes through which such sanctions are applied may be

challenged before the Bucharest Court of District 1. These

sanctions may be applied for compelling the undertakings to:

- Comply with the commitments or obligations undertaken in respect toan economic concentration, made binding by a decision of the

Competition Council

- Supply complete and correct information in response to a request of

the competition inspectors

The authority competent to settle the appeal against the Courtsdecision is the Bucharest Tribunal

l 36


37/42

4. Bibliography

Peter Roth QC, Vivien Rose, Bellamy & Child: European CommunityLaw of Competition, Oxford University Press, 2008, pg. 2-40, 1404-

1429 Jonathan Faull, Ali Nikpay, Faull & Nikpay: The EC Law ofCompetition, Oxford University Press, 2007, pg. 96-111, pg. 117-134

Richard Whish, Competition Law, Oxford University Press, 2009, pg.74-80, 142-145

Valentine Korah,An Introductory Guide to EC Competition Law and

Practice, Hart Publishing, 2007, pg. 26-42, 66-73, 241-250 http://ec.europa.eu/competition/

http://curia.europa.eu/

http://eur-lex.europa.eu/

http://ec.europa.eu/competition/publications/glossary_en.pdf(Glossary of terms used in EC Competition policy note:references need own reworking to updated laws and regulations)

l 37


38/42

4. Bibliography | 2

Treaty on the Functioning of the European Union consolidated version 30.03.2010 OJ C 38

Council Regulation No. 1/2003 consolidated version18.10.2006 OJ L 1 Commission Notice Guidelines on the effect on trade concept

contained in Articles 81 and 82 of the Treaty OJ C 101,27.04.2004

Commission Notice on cooperation within the Network ofCompetition Authorities OJ C-101, 27.04.2004 Commission Notice on the co-operation between the

Commission and the courts of the EU Member States in theapplication of Articles 81 and 82 EC OJ C101, 27.04.2004

Case C-156/91 Hansa Fleisch [1992], para 15 Case C-189/02 P Dansk Rrindustri [2005], para 211 Case C-2/88 Zwartveld [1990], para 10

l 38


39/42

5. Case law regarding the next courses topic

Agreements and concerted practices

Case C-189/02 P Dansk Rrindustri [2005], para 112-113

Case C-309/99 Wouters [2002], para 46-47, 49 Case T-66/99 Minoan Lines v Commission [2003], para 121 Case C-204/00 P Aalborg Portland A/S and others v Commission

[2004], para 59 Case C-205/03 P FENIN v Commission, Opinion of Advocate General,

para 26

Case C-97/08 P Akzo Nobel NV and others v Commission [2009],para 55, 58 Case T-128/98 Aroports de Paris v Commission [2000] Case C-49/92 P Commission v Anix Partecipazioni [1999], para 108,

131 Case T-53/03 BPB plc v Commission [2008], para 82

Case T-44/02 OP Dresdner Bank v Commission [2006], para 53-55 Case 48/69 Imperial Chemical Industries Ltd. v Commission [1972],para 64

l 39


40/42

5. Case law regarding the next courses topic | 2

Case T-168/01 GlaxoSmithKline Services Unlimited v Commission

[2006], para 118, 171

Joined Cases 29/83 and 30/83 Compagnie Royale Asturienne desMines SA and Rheinzink GmbH v Commission [1984], para 3

Case T-395/94 Atlantic Container Line v Commission [2002], para 76

Case 31/80 LOral v De Nieuwe AMCK [1980], para 19

Commission Decision of 15.10.2008, Case COMP/39188 Bananas,

para 226 Case T-13/03 Nintendo v Commission [2009], para 41

Case C-297/06 CEPSA [2008], para 44

Case 26/76 Metro v Commission (No. 1) [1977], para 20

Commission Decision of 16.07.2003, Case COMP/37.975

PO/Yamaha, para 122 Commission Decision of 05.09.1979, BP Kemi/DDSF, para 64

l 40


41/42

5. Contact

33 Dionisie Lupu Street

RO - 020021 BucharestPhone: (+40 21) 264 16 50

Fax: (+40 21) 264 16 60

E-Mail: [email protected]

Web: www.bpv-grigorescu.com

l 41

Catalin Grigorescu, [email protected]

Cristina [email protected]

Iulia [email protected]


42/42

6. Contacts bpv LEGAL

www.bpvlegal.com

bpv Hgel Rechtsanwlte OEG

Rond Point Schuman 9

B- 1040 Brussels

Tel.: +32 2 286 81 10

Fax: +32 2 286 81 18

[email protected]

www.bpv-huegel.com

bpv Jadi-Nemeth

Vrsmarty Tr 4, Medimpex Building

H-1051 Budapest

Tel.: + 36 1 484 0484

Fax: + 36 1 484 0433

[email protected]

www.bpv-jadi.com

bpv Braun Partners

Palac Myslbek, Ovocny trh 8

CZ- 110 00 Prague 1

Tel.: +420 224 490 000

Fax: +420 224 490 033

[email protected]

www.bpv-bh.com

bpv Hgel Rechtsanwlte OEG

Donau-City-Strae 11, ARES-Tower

A- 1220 Vienna

Tel.: +43 1 260 50 0

Fax: +43 1 260 50 133

[email protected]

www.bpv-huegel.com

l 42

110302 introduction and general aspects eu competition law

Documents