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Cover Competition Law

16. Vertical agreements  

This chapter examines the application of Article 101 TFEU and the Chapter I prohibition in the UK Competition Act 1998 to vertical agreements. The chapter begins by briefly describing the distribution chain, followed by sections on how the law applies to vertical integration and agency agreements. It discusses the competition policy considerations raised by vertical agreements, including the challenges presented by the emergence of online commerce. It explains the application of Article 101 to various vertical agreements while considering the case law of the EU Courts and the position of the Commission in its Guidelines on Vertical Restraints. The chapter goes on to discuss the provisions of Regulation 330/2010, the block exemption for vertical agreements; and the application of Article 101(3) to vertical agreements. The chapter then contains sections on Regulation 461/2010 on motor vehicle distribution and on sub-contracting agreements. Finally, it looks at the position in UK law.

Chapter

Cover Competition Law

17. Abuse of dominance (1): non-pricing practices  

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

Cover Jones & Sufrin's EU Competition Law

8. Competition, the State, and Public Undertakings: Article 106 TFEU  

This chapter examines how competition law applies to the actions of the State when it intervenes in the market through undertakings which it controls or owns or which it places in a privileged position. The discussion includes the principle of Union loyalty in Article 4(3) TEU; Article 106(1); Article 106(2); and the Commission’s supervisory and policing powers in Article 106(3). Article 106(1) is a prohibition addressed to Member States against enacting or maintaining in force any measure in relation to public undertakings or undertakings to which they have granted special or exclusive rights which are contrary to the Treaty rules. The chapter discusses what is meant by ‘public undertakings’ and ‘special or exclusive rights’ and examines in the light of the case law what measures are forbidden by Article 106(1), including those involving the cumulation of rights, the extension of a dominant position from one market to another, and the creation of situations of inequality of opportunity. Article 106(2) gives a limited derogation from Article 106(2) to undertakings entrusted with the operation of services of general economic interest (SGEIs). The chapter discusses the concept of ‘services of general economic interest’ and examines the cases in which the derogation has been applied or not applied, including the application of Article 106(2) to compensation for the provision of SGEIs which constitutes State aid. The chapter also considers Article 106(3) and the question of the direct effect of Article 106(1) and (2).

Chapter

Cover Competition Law

6. The obligations of Member States under the EU competition rules  

This chapter examines the obligations of Member States in relation to EU competition law. Specifically, it considers the obligations that Article 4(3) TEU and Articles 37 and 106 TFEU place upon Member States. Article 4(3) requires all Member States to take all appropriate measures to ensure fulfilment of the obligations arising out of the Treaties, and to avoid any measure which could jeopardise the attainment of the EU’s objectives. Article 106 particularly obligates Member States to refrain from enacting or maintaining measures contrary to the rules provided in Article 18 and Articles 101 to 109 of the TFEU. Article 37 is concerned with the procurement of goods.

Chapter

Cover Jones & Sufrin's EU Competition Law

7. Article 102 TFEU: Conduct Which Can Be an Abuse  

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

Cover Steiner & Woods EU Law

3. Scope of the EU Treaty: laws and lawmaking  

This chapter examines the lawmaking powers of the European Union (EU) in the context of its Treaties. It explains that the EU has the competence to make law of various types (including secondary legislation, soft law, delegated acts and implementing acts) in a broad range of areas and that the amendments to the lawmaking procedures have affected the institutional balance, giving an increased role to the European Parliament. It discusses the changes made to improve the level of democracy at EU level, to address concerns that EU law-making has a ‘democratic deficit’ and lacks transparency and proportionality. The chapter also considers the different aspects of EU competence, describes the lawmaking process and sources of EU law and also addresses questions concerning the determination of exclusive, shared and concurrent competence, particularly in the context of subsidiarity. Furthermore, it examines the rules on the EU adopting legislation without all Member States participating (closer cooperation).

Chapter

Cover Competition Law

17. Abuse of dominance (1): non-pricing practices  

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 to the case-law of the Court of Justice and the Commission’s Guidance on the Commission’s Enforcement Priorities in Applying Article [102 TFEU] to Abusive Exclusionary Conduct by Dominant Undertakings

Chapter

Cover Competition Law

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

Cover Jones & Sufrin's EU Competition Law

11. Vertical Agreements  

Alison Jones, Brenda Sufrin, and Niamh Dunne

This chapter, which discusses EU competition policy towards vertical agreements, begins by outlining the choices available to a supplier when deciding how best to market and sell its products or services to customers, and the impact that the competition rules may have on a supplier’s choice. It then discusses the evolution of the EU approach to vertical agreements, from the early days of EEC competition to now, especially as reflected in the Commission’s Verticals Guidelines of 2022, including exclusive dealing, single branding, franchising, and selective distribution agreements. It considers the importance in EU law of parallel trade between Member States and how this has influenced policy towards vertical restraints. It analyses the application of Article 101(1) and Article 101(3) to vertical agreements, including the verticals block exemption of 2022; and subcontracting agreements.

Chapter

Cover Jones & Sufrin's EU Competition Law

7. Article 102 TFEU: Conduct Which Can be an Abuse  

Alison Jones, Brenda Sufrin, and Niamh Dunne

This chapter discusses the difficult concept of what constitutes an ‘abuse’ of a dominant position for the purposes of Article 102. 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 illegitimate 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; and hindering inter-Member State trade.

Chapter

Cover Jones & Sufrin's EU Competition Law

8. Competition and the State: Article 106 TFEU  

Alison Jones, Brenda Sufrin, and Niamh Dunne

This chapter examines how competition law applies to the actions of the State when it intervenes in the market through undertakings which it controls or owns or which it places in a privileged position. The discussion includes the principle of Union loyalty in Article 4(3) TEU; Article 106(1); Article 106(2); and the Commission’s supervisory and policing powers in Article 106(3). Article 106(1) is a prohibition addressed to Member States against enacting or maintaining in force any measure in relation to public undertakings or undertakings to which they have granted special or exclusive rights which are contrary to the Treaty rules. The chapter discusses what is meant by ‘public undertakings’ and ‘special or exclusive rights’ and examines in the light of the case law what measures are forbidden by Article 106(1), including those involving the cumulation of rights, the extension of a dominant position from one market to another, and the creation of situations of inequality of opportunity. Article 106(2) gives a limited derogation from Article 106(2) to undertakings entrusted with the operation of services of general economic interest (SGEIs). The chapter discusses the concept of ‘services of general economic interest’ and examines the cases in which the derogation has been applied or not applied, including the application of Article 106(2) to compensation for the provision of SGEIs which constitutes State aid. The chapter also considers Article 106(3) and the question of the direct effect of Article 106(1) and (2).

Chapter

Cover Competition Law

6. The obligations of Member States under the EU competition rules  

This chapter examines the obligations of Member States in relation to EU competition law. Specifically, it considers the obligations that Article 4(3) TEU and Articles 37 and 106 TFEU place upon Member States. Article 4(3) requires all Member States to take all appropriate measures to ensure fulfilment of the obligations arising out of the Treaties, and to avoid any measure which could jeopardise the attainment of the EUs objectives. Article 106 particularly obligates Member States to refrain from enacting or maintaining measures, contrary to the rules provided in Article 18 and Articles 101 to 109 of the TFEU. Article 37 is concerned with state monopolies of a commercial character.

Chapter

Cover Competition Law

13. Horizontal agreements (1): cartels  

This chapter is concerned with the prohibition of cartels. It begins with a discussion of the widespread consensus among competition authorities worldwide that cartels should be condemned, and gives examples of recent enforcement that led to the imposition of significant fines and sentences of imprisonment. It also looks at anti-cartel enforcement in the EU. The chapter then considers the application of Article 101 to particular types of cartels: price fixing, market sharing, production quotas and other ‘hard-core’ cartel practices. The final section of this chapter looks at anti-cartel enforcement in the UK.