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Chapter

This chapter considers abusive non-pricing practices under Article 102 TFEU and the Chapter II prohibition in the Competition Act 1998. It deals in turn with exclusive dealing agreements; tying; refusals to supply; abusive non-pricing practices that are harmful to the single market; and miscellaneous other non-pricing practices which might infringe Article 102 or the Chapter II prohibition. Reference is made where appropriate to the Commission’s Guidance on the Commission’s Enforcement Priorities in Applying Article [102 TFEU] to Abusive Exclusionary Conduct by Dominant Undertakings.

Chapter

This chapter considers abusive pricing practices under Article 102 TFEU and the Chapter II prohibition in the Competition Act 1998. It discusses cost concepts used in determining whether a price is abusive and deals with excessive pricing; conditional rebates; bundling; predatory pricing; margin squeeze; price discrimination; and practices harmful to the single market. Price discrimination may be both exploitative and exclusionary and an excessively high price may be a way of preventing parallel imports or excluding a competitor from the market; but the division may provide helpful insights into the way in which the law is applied in practice. In each section the application of Article 102 by the European Commission and the EU Courts is considered, followed by cases in the UK. Where appropriate, reference is made to the Commission’s Guidance on the Commission’s Enforcement Priorities in Applying Article [102 TFEU] to Abusive Exclusionary Conduct by Dominant Undertakings.

Chapter

This chapter considers the general principles of the application of Article 101 TFEU. Article 101 TFEU applies to joint, coordinated conduct understood in a broad sense to catch agreements, decisions by associations of undertakings, and concerted practices. The most important question is that of whether there is in the conduct a prevention, restriction, or distortion of competition within the meaning of Article 101(1) TFEU. Some forms of conduct, such as horizontal price fixing, are generally deemed to be anticompetitive by object; others, such as vertical distribution agreements, must be analysed in order to determine the competitive effects of the conduct. For the prohibition to apply, there must be an effect on trade between Member States. Article 101 TFEU has direct effect, and conduct prohibited is illegal without any decision to that effect being necessary.

Chapter

This chapter focuses on the most important pricing and non-pricing practices, which together constitute the larger part of the anti-competitive and exploitative abuses of dominant firms. The types of conduct considered abusive of market power are similar under most competition regimes, and include both pricing and non-pricing practices. The ‘form-based’ analysis of abusive practices is progressively shifting to an ‘effects-based approach’. In the EU and the UK, both exclusionary and exploitative abuses may fall foul of the relevant competition law provisions. Exclusionary practices are usually considered abusive when they are likely to lead to ‘anticompetitive foreclosure’. The EU and UK law and practice in relation to all these potential abuses is and will remain aligned until the UK has formally left the EU.

Chapter

This chapter examines the relationship between Article 101(1) and Article 101(3). It looks at the central question of which agreements, decisions and concerted practices have as their object or effect the prevention, restriction or distortion of competition for the purposes of Article 101(1) and at the issue of which agreements are held to infringe Article 101(1) but meet the critera for exemption from the prohibition set out in Article 101(3). The chapter looks at the way in which the interpretation of ‘object or effect the prevention, restriction or distortion of competition’ has changed since the early days of EEC competition law and at the problems of identifying which agreements are restrictive by object and which restrictive by effect. It examines the recent and controversial case law on this matter and the difficulties which remain including the doctrine of ancillary restraints. It then focuses on the analysis of the effect of agreements which are not restrictive by object, including the concept of appreciability and the de minimis notice. The chapter then considers the matter of which restrictive agreements may neverthess escape the prohibition in Article 101(1) because they meet the criteria in Article 101(3) in that they improve the production or distribution of goods or the promotion of technical or economic progress, how this criterion is distinguished from the agreement not having restrictive effects that bring it within Article 101(1) in the first place, and whether the Article 101(3) criteria can encompass socio-political or public policy matters. The chapter considers the application of the Article 101(3) criteria, the shifting of the burden of proof between Article 101(1) and 101(3), and the existence and importance of block exemptions.

Chapter

This chapter discusses the text and scheme of Article 101 which prohibits agreements, decisions and concerted practices which restrict competition and may affect trade between Member States. It explains the terms employed in Article 101(1) and how they are interpreted and applied. This entails a discussion of the meaning of ‘undertaking’ and ‘association of undertakings’, including the concepts of ‘economic activities’ and of a ‘single economic entity’; the meaning of ‘agreement’ including the coverage of both horizontal and vertical agreements; the meaning of ‘concerted practice’; the meaning of ‘decisions by associations of undertakings’; the application of Article 101(1) to complex arrangements and single continuous infringements; and the meaning of an appreciable effect on trade between Member States.

Chapter

This chapter discusses Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), which prohibits agreements, decisions by associations of undertakings and concerted practices that restrict competition. It begins by explaining the terms ‘undertakings’ and ‘associations of undertakings’. It then considers what is meant by the terms ‘agreements’, ‘decisions’ and ‘concerted practices’, as well as what is meant by the phrase ‘prevention, restriction and distortion of competition’ that serves as the purpose of the provision. The chapter then deals with the de minimis doctrine, before explaining the requirement of an effect on trade between Member States. The chapter concludes with a checklist of agreements that, for a variety of reasons, normally fall outside Article 101(1).

Chapter

This chapter examines Article 101(3) of the Treaty on the Functioning of the European Union (TFEU). Article 101(3) provides a ‘legal exception’ to the prohibition in Article 101(1) by providing that it may be declared inapplicable in respect of agreements, decisions or concerted practices, or of categories of agreements, decisions or concerted practices, that satisfy four conditions. After discussing the burden and standard of proof under Article 101(3) and the application of that provision to agreements, including restrictions of competition by object, this chapter discusses the four conditions in Article 101(3). It then considers the implications of Regulation 1/2003 for undertakings and their professional advisers, and in particular their need to ‘self-assess’ the application of Article 101(3) to agreements. The final section of this chapter describes the system of so-called ‘block exemptions’.

Chapter

This chapter discusses the main features of Article 102 of the Treaty on the Functioning of the European Union (TFEU), which is concerned with the abusive conduct of dominant firms. It begins by introducing the European Commission’s Guidance on the Commission’s enforcement priorities in applying Article [102 TFEU] to abusive exclusionary conduct by dominant undertakings. It then discusses the concept of undertaking, the requirement of an effect on trade between Member States, the concept of a dominant position and the requirement that any dominant position must be held in a substantial part of the internal market. The chapter also considers the meaning of abuse of a dominant position, which is a complex and controversial issue. A discussion of the defences to allegations of abuse is followed by a brief look at the consequences of infringing Article 102.

Chapter

This chapter discusses the difficult concept of what constitutes an ‘abuse’ of a dominant position for the purposes of Article 102 and whether conduct should be condemned on account of the form it takes or only for its effects. It considers the case law of the EU Courts, the decisional practice of the Commission, and the Commission’s Guidance Paper on enforcement priorities, and the problem of distinguishing competition on the merits from illegimate conduct. The chapter looks at the different classifications of abuse, particularly exclusionary and exploitative abuses; the distinction between form- and effects-based approaches to types of abuse; the leveraging of market power between distinct markets as a theory of harm; the objective justification defence; and general issues in respect of abuses concerning prices, including the ‘as efficient competitor’ test. The chapter then examines the application of Article 102 to various forms of conduct, including: price discrimination; predatory pricing; selective low pricing; margin squeeze; exclusive dealing;; tying and bundling; refusal to supply; self-preferencing; malicious pursuit of legal proceedings; ‘regulatory gaming’; discrimination abuses; unfairly high and low pricing; hindering inter-Member State trade; and more novel claimed abuses within the digital economy.

Chapter

Article 102 TFEU deals with the unilateral conduct of undertakings with substantial market power. It thus prohibits one or more undertakings which hold a dominant position in the internal market or a substantial part of it abusing that position insofar as it may affect inter-Member State trade. This chapter discusses the role of Article 102 and the controversy attending its application, and introduces the elements which must be established before the prohibition applies. The Commission’s review of Article 102 and the publication of its Guidance Paper on enforcement priorities, and the relationship between Article 102 and Article 101, are also considered. The chapter then explores in detail one of the principal limbs of the Article 102 prohibition, namely the concept of an undertaking holding a ‘dominant position’ in a relevant market. The definition of a dominant position in the case law of the Court is discussed, alongside its relation to the concept of substantial market power, including the Commission’s treatment in the Guidance Paper. The chapter then considers how dominance is established, addressing, inter aliai, the definition of the relevant market for the purposes of Article 102; the role of market share in establishing dominance; barriers to entry and other factors indicating dominance; and dominant positions in the digital economy. Article 102

Chapter

This chapter describes the private enforcement of Articles 101 and/or 102 as a matter of EU law, with particular emphasis on the Damages Directive. It also deals with the extensive experience of private actions in the UK courts. The chapter considers the use of competition law as a defence, for example to an action for breach of contract or infringement of an intellectual property right. The chapter concludes with a brief discussion of issues that can arise where competition law disputes are referred to arbitration rather than to a court for resolution.

Chapter

This chapter explains the public enforcement of Articles 101 and 102 by the European Commission and the national competition authorities (‘the NCAs’) under Regulation 1/2003. It begins by describing the Commission’s powers of investigation and enforcement, including its power to accept commitments, its leniency programme, the cartel settlement procedure and its power to impose financial penalties. It then discusses the operation of Regulation 1/2003 in practice, with particular reference to the European Competition Network (‘the ECN’) that brings together the Commission and the NCAs. The chapter concludes by providing a brief account of judicial review of the Commission’s decisions.

Chapter

This chapter focuses on block exemption regulations, which have become crucial in the application of the exception contained in Article 101(3) TFEU to agreements whose pro-competitive effects may outweigh any potential threats to competition. The current block exemptions represent an attempt to reconcile economic considerations and the needs of business. They are therefore less prescriptive than earlier versions, and tend to set a benchmark share of the relevant market within which they are applicable. The chapter fleshes out the details of the principal block exemptions presently in force, and provides a step-by-step guide to their application in the shape of a general flow chart. It covers legal basis and withdrawal, block exemptions for vertical agreements, and horizontal block exemptions.

Chapter

This chapter discusses cartel offence, contained in Part 6 of the Enterprise Act 2002 (EA), and in particular section 188, which made it a criminal offence to engage in cartel activity implemented in the UK. It applies to horizontal price fixing, market sharing, bid rigging, and production limitation agreements. Individuals can be prosecuted and may face imprisonment and/or individual fines. In its original formulation, the cartel offence had limited success. In 2013, the Enterprise and Regulatory Reform Act 2013 (ERRA) introduced three important modifications to section 188 of the EA: it removed the requirement that the conduct be ‘dishonest’; it added a section 188A with a list of exclusions, or circumstances under which engaging in a cartel would not be ‘criminal’ and it included, in new section 188B, possible defences.

Chapter

This chapter deals with Chapter I Prohibition, which is the UK domestic equivalent of Article 101 TFEU. It is to be applied and interpreted in a way that is consistent with the application of Article 101 TFEU, unless there is a ‘relevant difference’. There is no requirement for an effect on trade between Member States, but on trade within the UK. The prohibition has been applied to localized agreements. If Article 101 TFEU is applicable to any practice being examined under Chapter I Prohibition, it must be applied. Chapter I Prohibition may be applied in conjunction with EU law, but the result must not be inconsistent. A breach of Chapter I Prohibition may incur penalties, damages, and a requirement of conduct modification, and also renders void any offending agreement.

Chapter

This chapter provides an outline of the operation of Chapter II Prohibition, pointing out the relevant guidelines and decisions. This Chapter II Prohibition, contained in section 18 of the Competition Act 1998 (CA), is the UK domestic equivalent of Article 102 TFEU. It is to be applied, and its terms interpreted, in a way that is consistent with the application of Article 102 TFEU, unless there is a ‘relevant difference’. If Article 102 TFEU is applicable to any practice being examined under Chapter II Prohibition, it must be applied. A breach of Chapter II Prohibition may incur penalties, damages, and a requirement of conduct modification.

Chapter

This chapter considers the areas in which the operation of the common law impacts upon issues that are closely related to the public regulation of competition. Certain doctrines of common law may be applied to situations in which competition is being restrained, or to competitive conduct. Common law doctrines in antitrust are becoming less important following the growth of modern competition law. The restraint of trade doctrine remains vibrant, and is often relied on in professional disputes. Restraint of trade is a doctrine of contract law under which certain contracts are unenforceable if they unreasonably restrain the activity of a party after the termination of the main contract. A number of rarely used torts may also be relevant to certain competitive situations.

Chapter

This chapter describes the system of public enforcement under the Competition Act 1998. Reinforced by the Enterprise Act 2002 and Enterprise Regulatory Reform Act 2013, the Competition Act provides a set of procedural rules of investigation for the enforcement of the Chapter I and II prohibitions. After a section on complaints, it considers the extent to which it may be possible to receive guidance from the Competition and Markets Authority (‘the CMA’) on the application of the Act. It then deals in turn with enforcement of the Competition Act 1998, the criminal cartel offence and company director disqualification. This is followed by an overview of the concurrency provisions, stating that the CMA works hand-in-hand with the sectoral regulators. The final two sections discuss the appeal mechanism under the Competition Act and the possibility of Article 267 references to the Court of Justice.

Chapter

This chapter discusses the Competition Act 1998, which serves as a basis for UK competition law. Following an overview of the Competition Act, it considers decisional practice and case law under the so-called Chapter I and Chapter II prohibitions in the Competition Act, which are modelled after Articles 101 and 102 TFEU. It discusses the relationship between EU and domestic competition law, including the important ‘governing principles’ clause in section 60 of the Competition Act, which is intended to achieve consistency with EU law. The chapter contains a table of all the decisions under the Competition Act to have been published on the website of the Competition and Markets Authority (‘the CMA’) since the eighth edition of the book up until 8 December 2017. The chapter concludes with a discussion of the application of the Competition Act in practice and the possible implications of Brexit for UK competition law.