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.
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Chapter
15. The Chapter II Prohibition
Chapter
22. Competition law and intellectual property
This chapter discusses the relationship between competition law and intellectual property rights. Competition law may limit the ability to exercise intellectual property rights. Article 101 TFEU and Chapter I Prohibition may apply to agreements to license intellectual property, as well as pay-for-delay settlements between a patent holder and potential competitors. Article 102 TFEU and Chapter II Prohibition may apply to the use of intellectual property rights by a dominant undertaking, particularly when the protected asset is essential to third parties. The existence of intellectual property rights does not automatically confer a dominant position — the product or service may still face competition.
Chapter
14. The elements of Article 102 TFEU
This chapter discusses Article 102 TFEU, which applies to abusive conduct engaged in by undertakings in a dominant position. The dominant position must be held in a ‘substantial part’ of the internal market for EU competition law to apply. Abuses can take many forms, and include conduct designed to preserve or expand the power of the undertaking (‘exclusionary abuses’) and conduct aiming to exploit the power of the undertaking (‘exploitative abuses’). No exemptions are available, but the alleged abusive conduct may be defended on the grounds that it is ‘objectively justifiable’ or if there are efficiency justifications. A breach of Article 102 TFEU may incur penalties, damages, and a requirement of conduct modification.
Chapter
29. Competition Law: Article 102
All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing students with a stand-alone resource. This chapter focuses on another principal provision concerned with competition policy, Article 102 TFEU. The essence of Article 102 is control of market power, whether by a single firm or, subject to certain conditions, a number of firms. Monopoly power can lead to higher prices and lower output than would prevail under more normal competitive conditions, and this is the core rationale for legal regulation in this area. Article 102 does not, however, prohibit market power per se. It proscribes the abuse of market power. Firms are encouraged to compete, with the most efficient players being successful. The UK version contains a further section analysing issues concerning EU competition law and the UK post-Brexit. EU law
Chapter
28. Competition Law: Article 102
All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing students with a stand-alone resource. This chapter focuses on another principal provision concerned with competition policy: Article 102 TFEU. The essence of Article 102 is the control of market power, whether by a single firm or, subject to certain conditions, a number of firms. Monopoly power can lead to higher prices and lower output than would prevail under more normal competitive conditions, and this is the core rationale for legal regulation in this area. Article 102 does not, however, prohibit market power per se. It proscribes the abuse of market power. Firms are encouraged to compete, with the most efficient players being successful. The UK version contains a further section analysing issues concerning EU competition law and the UK post-Brexit. EU law
Chapter
29. Competition Law: Article 102
All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing students with a stand-alone resource. This chapter focuses on another principal provision concerned with competition policy, Article 102 TFEU. The essence of Article 102 is control of market power, whether by a single firm or, subject to certain conditions, a number of firms. Monopoly power can lead to higher prices and lower output than would prevail under more normal competitive conditions, and this is the core rationale for legal regulation in this area. Article 102 does not, however, prohibit market power per se. It proscribes the abuse of market power. Firms are encouraged to compete, with the most efficient players being successful. The UK version contains a further section analysing issues concerning EU competition law and the UK post-Brexit. EU law
Chapter
28. Competition Law: Article 102
All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing students with a stand-alone resource. This chapter focuses on another principal provision concerned with competition policy: Article 102 TFEU. The essence of Article 102 is the control of market power, whether by a single firm or, subject to certain conditions, a number of firms. Monopoly power can lead to higher prices and lower output than would prevail under more normal competitive conditions, and this is the core rationale for legal regulation in this area. Article 102 does not, however, prohibit market power per se. It proscribes the abuse of market power. Firms are encouraged to compete, with the most efficient players being successful. The UK version contains a further section analysing issues concerning EU competition law and the UK post-Brexit. EU law
Chapter
5. Procedure: investigation
This chapter deals with the way in which infringements of Articles 101 and 102 TFEU and Chapter I and II Prohibitions of the Competition Act 1998 are investigated and attacked. The European Commission has its own powers to investigate infringements of EU competition law by virtue of Regulation 1/2003. It may cooperate with national competition authorities (NCAs), who also have their own powers by virtue of EU law and their respective national competition laws. NCAs and the European Commission cooperate through the European Competition Network (ECN). The European Commission and the Competition Markets Authority (CMA) may obtain information, or may investigate on-site. The CMA also has criminal jurisdiction in some cases. Undertakings subject to investigation have rights that must be observed.
Chapter
11. Vertical Agreements
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, including the treatment of agency agreements. It then discusses the EU approach to vertical agreements, in the light of the Commission’s Verticals Guidelines of 2010, including exclusive dealing, single branding, franchising andselective distribution agreements, and the review of the 2010 regime. 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 2010; sub-contracting agreements; and the possible application of Article 102 to distribution agreements.
Chapter
18. Abuse of dominance (2): pricing practices
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
5. Article 102
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
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
14. Private Enforcement
This chapter focuses on the private civil enforcement of EU antitrust rules through claims made by private litigants in the national courts and tribunals of the individual Member States. The discussions cover the principle of direct effect and national procedural autonomy, mechanisms for cooperation between the Commission and national courts, the obligations of national courts when dealing with cases that raise the issue of whether a contract in violation of Article 101 or Article 102 is enforceable and whether, and if so when, damages and injunctions should be available to remedy such violations. It also considers wy historically there was relatively little antitrust litigation in the EU; the relationship between public and private enforcement; the Commission's policy towards private enforcement, the package of measures the Commission has taken to encourage private litigation, especially the 2014 Damages Directive and its likely impact.
Chapter
9. Horizontal Agreements—Cartels and Collusion
This chapter examines how EU competition law applies both to undertakings operating cartels and to undertakings that tacitly coordinate their behaviour on a market. It starts by looking at the difference between ‘explicit’ and ‘tacit’ collusion in the light of the theory of games and the ‘prisoners’ dilemma’. The chapter then deals with cartels and other agreements akin to cartels, or which may facilitate explicit or tacit collusion on a market. Next, it considers the problem of tacit collusion and whether, in particular, Articles 101 and 102 operate as effective mechanisms for dealing with the oligopoly problem. The chapter also considers other options that EU competition law might offer to deal with tacit collusion, either ex ante or ex post, such as the use of the concept of collective dominance and sector enquiries under Regulation 1/2003, art 17.
Chapter
14. Private Enforcement of Articles 101 and 102
Alison Jones, Brenda Sufrin, and Niamh Dunne
This chapter focuses on the private civil enforcement of EU antitrust rules through claims made by private litigants in the national courts and tribunals of the individual Member States. The discussion covers the principle of direct effect and national procedural autonomy, mechanisms for cooperation between the Commission and national courts, the obligations of national courts when dealing with cases that raise the issue of whether a contract in violation of Article 101 or Article 102 is enforceable and whether, and if so when, damages and injunctions should be available to remedy such violations. It also considers why historically there was relatively little antitrust litigation in the EU; the relationship between public and private enforcement; and the Commission’s policy towards private enforcement, the package of measures the Commission has taken to encourage private litigation, especially the 2014 Damages Directive and its impact.
Chapter
6. Article 102 TFEU: Introduction and Dominant Position
Alison Jones, Brenda Sufrin, and Niamh Dunne
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, the publication of its Guidance Paper on enforcement priorities and subsequent amendments to this document, and the relationship between Article 102 and Article 101, are considered. The chapter also 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. The chapter then considers how dominance is established, addressing, inter alia, the definition of the relevant market for the purposes of Article 102; the role of market share in establishing dominance; and barriers to entry and other factors indicating dominance.
Chapter
9. Horizontal Agreements—Cartels and Collusion
Alison Jones, Brenda Sufrin, and Niamh Dunne
This chapter examines how EU competition law applies both to undertakings operating cartels and to undertakings that tacitly coordinate their behaviour on a market. It starts by looking at the difference between ‘explicit’ and ‘tacit’ collusion. The chapter then deals with cartels and other agreements akin to cartels, or which may facilitate explicit or tacit collusion on a market. Next, it considers the problem of tacit collusion and whether, in particular, Articles 101 and 102 operate as effective mechanisms for dealing with the oligopoly problem. The chapter also considers other options that EU competition law might offer to deal with tacit collusion, either ex ante or ex post, such as the use of the concept of collective dominance and sector inquiries under Regulation 1/2003, Article 17.
Book
Richard Whish and David Bailey
Competition Law explains competition law and policy in the EU and UK. The intention is to provide the reader with an understanding of competition law and policy, to introduce the reader to key economic concepts, legal principles and tools in competition law, and to provide insights into the numerous different issues that arise when applying competition law to market behaviour. Describing the economic rationale for the law, the chapters consider the application of EU and UK competition law to various business practices, including cartels, cooperation agreements, distribution agreements, licences of intellectual property rights, joint ventures, and mergers. The text has been updated to include the changes to UK law as a consequence of Brexit. It discusses for the first time the rise of powerful digital platforms and the quest for a suitable competition law and regulatory response to this phenomenon. It also considers the implications of the European Green Deal and the sustainability agenda for EU competition law and practice. The text incorporates extensive new legislation, case-law, decisional practice, guidelines and periodical literature at EU and UK level.
Chapter
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.
Book
Richard Whish and David Bailey
Competition Law explains competition law and policy in the EU and UK. The intention is to provide the reader with an understanding of competition law and policy, to introduce the reader to key economic concepts, legal principles and tools in competition law, and to provide insights into the numerous different issues that arise when applying competition law to market behaviour. Describing the economic rationale for the law, the chapters consider the application of EU and UK competition law to various business practices, including cartels, cooperation agreements, exchanges of information, distribution agreements, licences of intellectual property rights, unilateral conduct, joint ventures, and mergers. The text has been updated to include changes to EU law on digital markets as a result of the Digital Services Act and the Digital Markets Act. It also discusses the changes to UK law as a consequence of the Digital Markets, Competition and Consumers Act 2024, including the creation of a regulatory scheme for digital platforms having a ‘strategic market status’ and amendments to the Competition Act 1998 and the Enterprise Act 2002. It also discusses the European Commission’s Guidelines on Vertical Restraints of 2022 and Horizontal Cooperation Guidelines of 2023, including its guidance on sustainability agreements. The text incorporates extensive new legislation, case-law, decisional practice, guidelines and periodical literature at EU and UK level.
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