This chapter provides an overview of competition law and its economic context. Section 2 describes the practices that competition laws attempt to control in order to protect the competition process. Section 3 examines the theory of competition and gives an introductory account of why the effective enforcement of competition law is thought to be beneficial. Section 4 considers the goals of competition law. Section 5 introduces two key economic concepts, market definition and market power, that are important to a better understanding of competition policy. The chapter concludes with a table of market share figures that are significant in the application of EU and UK competition law, while reminding the reader that market shares are only ever a proxy for market power and can never be determinative of market power in themselves.
Chapter
1. Competition policy and economics
Chapter
16. Vertical agreements
This chapter examines the application of Article 101 TFEU and the Chapter I prohibition in the UK Competition Act 1998 to distribution agreements. The chapter begins with a discussion of distribution chains in the modern economy, looking at the various ways in which producers market their goods or services to consumers; these have been enormously enhanced by the emergence of the digital economy. This is followed by sections on how the law applies to producers carrying on their own distribution function (‘vertical integration’), commercial agency and vertical sub-contracting relationships. It discusses the competition policy considerations raised by distribution agreements, and explains the application of Article 101 to various different types of distribution agreements. This is followed by a section on the provisions of Regulation 330/2010, the block exemption for distribution agreements, and the individual application of Article 101(3) to distribution agreements. The chapter then contains sections on Regulation 461/2010 on motor vehicle distribution. Finally, it deals with the application of the Chapter I prohibition in the UK Competition Act 1998 to distribution agreements.
Chapter
5. Article 102
This chapter discusses the main features of Article 102 of the Treaty of Functioning of the European Union (TFEU), which is concerned with the abusive conduct of dominant firms. It begins by discussing the meaning of ‘undertaking’ and ‘effect on trade between Member States’ in the context of Article 102. It then considers what is meant by a dominant position and looks at the requirement that any dominant position must be held in a substantial part of the internal market. Thereafter it discusses some general considerations relevant to the concept of abuse of dominance, followed by an explanation of what is meant by ‘exploitative’, ‘exclusionary’ and ‘single market’ abuses. It then discusses possible defences to allegations of abuse, and concludes by considering the consequences of infringing Article 102.
Chapter
21. Mergers (2): EU law
This chapter examines EU merger control. The chapter is organized as follows. Section 2 provides an overview of EU merger control. Section 3 discusses the jurisdictional rules which determine whether a particular merger should be investigated by the European Commission in Brussels or by the national competition authorities (‘the NCAs’) of the Member States. Section 4 deals with the procedural considerations such as the mandatory pre-notification to the Commission of mergers that have a Union dimension and the timetable within which the Commission must operate. Section 5 discusses the substantive analysis of mergers under the EU Merger Regulation (EUMR), and section 6 explains the procedure whereby the Commission may authorise a merger on the basis of commitments, often referred to as remedies, offered by the parties to address its competition concerns. The subsequent sections describe the Commission’s powers of investigation and enforcement, judicial review of Commission decisions by the EU Courts and cooperation between the Commission and other competition authorities, both within and outside the EU. The chapter concludes with an examination of how the EUMR merger control provisions work in practice.
Chapter
9. Competition Act 1998: substantive provisions
This chapter describes the substantive provisions of the Competition Act 1998 in the UK. The focus of attention in this chapter is the ‘Chapter I prohibition’, which prohibits anti-competitive agreements, and the ‘Chapter II prohibition’, which prohibits the abuse of a dominant position. The Chapter I and II prohibitions are closely modelled upon Articles 101 and 102 TFEU, although they are by no means identical in every respect. Following an overview of the Competition Act, and the changes introduced as a result of Brexit, it considers in turn the decisional practice and case-law under the Chapter I and Chapter II prohibitions. It then discusses the duty in section 60A of the Competition Act that sets out the principles to be applied in determining questions that arise in relation to competition within the UK with effect from 1 January 2021. The chapter also contains a table of all the decisions under the Competition Act to have been published on the website of the Competition and Markets Authority (CMA) since the ninth edition of the book in December 2017.
