ART 101 TFEU THE PROHIBITION OF ANTICOMPETITIVE AGREEMENTS

ART. 101 TFEU THE PROHIBITION OF ANTICOMPETITIVE AGREEMENTS, DECISIONS OR PRACTICES

ART. 101 – C. 1 The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, …

… and in particular those which: a) directly or indirectly fix purchase or selling prices or any other trading conditions; b) limit or control production, markets, technical development, or investment; share markets or sources of supply; c) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; d) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

ART. 101 - C. 2 Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

AGREEMENTS • There isn’t a legal definition of “agreement between undertakings” in the European Law. • The Court of Justice says that the focal point is “the existence of an expression of will between two or more parties”. • The agreement could be written or oral; conditional or gentlement’s agreement…. • “in order to have an agreement, it is sufficient for undertakings to have expressed their joint will to behave in a certain determined way (detriment of competition) on the market” (Sandoz Case)

DECISIONS BY ASSOCIATION OF UNDERTAKINGS • Any decision of the governing body of an association of undertakings which has as its object or effect the restriction of competition. • The decision should have the power to impose a certain behaviour to the association members in their economic activity on the market. • The decision may take various forms, such as directives, internal regulations, circulars… which the adherent undertakings apply effectively, complying with the provision sent fron the centre.

CONCERTED PRACTICES • “a form of coordination between undertakings that, without reaching the level at which a proper agreement would have been concluded, knowingly substitutes the practical cooperation to the risks of competition” (Dyestuffs case) • Any undertaking must determine autonomously its policy on the market, including the choice of addresses of its own offers and sales: the objective element of a concerted practice is given by the existence, at a certain time, of a similar and a parallel behaviour of undertakings concerned

CONCERTED PRACTICES (2) • The parallel behaviour must be consciously adopted by each undertaking, in exchange for achieving a common goal. • The intentions must be convergent and lead to an effective cooperation. • The alignment to the common behaviour is usually achieved through the exchange of relevant information, between undertakings, on their future economic actions, that eliminate the risk of competition.

THE OBJECT OR EFFECT OF PREVENTING, RESTRICTING OR DISTORTING COMPETITION The words “object or effect” has to be read disjunctively. This means that where an agreement has as its object the restriction of competition it is unnecessary to prove that it will produce anti-competitive effects. Only if it is not clear that object of an agreement is to restrict competition is it necessary to consider whether it might have the effect of doing so.

THE EFFECT ON TRADE BETWEEN MEMBER STATES • The inter-Member State trade clause is very important in EU competition law, since it defines “the boundary between the areas respectively covered by EU law and the law of the Member States” (Hugin case) • The concept of “trade” is not limited to traditional exchanges of goods and services across borders: it is a wider concepèt and covers all cross-border activity, including the establishment by undertakings of agencies, branches or subsidiaries in other Member States.

THE EFFECT ON TRADE (2) • The notion that an agreement or practice “may affect” trade between Member States means that it must be possible to foresee, with a sufficient degree of probability, that the agreement or practice may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States. • Any effect on trade must be appreciable. An undertaking’s market share, and the value of its turnover in the products concerned, are relevant to the appreciability of any effect.

LEGAL EXCEPTION The provisions of paragraph 1 may, however, be declared inapplicable in the case of: • which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: • impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; • afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.