1. European Union Competition Law Provisions

European Union competition law chiefly aims to protect competition within the single market by regulating anti-competitive behaviour by firms and preventing cartels and monopolies that might harm society. These objectives have been repeatedly stressed for more than 50 years. For example, the Commission’s Annual Report on Competition Policy for 2000 accentuated maintenance of the competitive market and the single market objective, as others have. 

The ultimate authority for EU competition is the European Commission. Currently, European competition law is mostly contained in Articles 101 to 109 of the Treaty on the Functioning of the European Union (TFEU) and several Regulations and Directives. TFEU Article 101 prohibits any deals or cartels between the Member States that would impair independent competition within the internal market. TFEU Article 102 prohibits any dominant market position within the internal market or in a significant part of it. EU mergers and acquisitions are controlled by the European Union Merger Regulation 139/2004 (EUMR). 

To understand and achieve the competition law objectives, it is necessary to analyse TFEU Article 101 and TFEU Article 102. Accordingly, I will first examine Article 101 and then Article 102. Subsequently, I present a brief analysis of EU merger control. 

Article 101 prohibits certain inhibitory deals between independent market managers, whether in horizontal or vertical agreements. These are clearly defined in Article 101(1) as “all agreements between undertakings, judgements by associations of undertakings and concerted practices which may influence trade between the Member Countries, and which have as their object or effect the prevention, restriction or distortion of competition within the domestic market.” Article 101(1)(a)-(e) provides a list of forbidden types of deals terms  and Article 101(3) contains exceptions to the prohibitions.

1.1TFEU Article 101

The TFEU does not specially define “undertakings”, and EU courts have tried to clarify the meaning of this term for years. In Klaus Höfner and Fritz Elser v Macrotron GmbH the Court of Justice of the European Union (CJEU) decreed that “…the notion of an undertaking encompasses every entity in economic activity, regardless of the entity’s lawful condition and how it is financed…”  Similarly, in Pavel Pavlov and Others v Stichting Pensioenfonds Medische Specialisten the Court added that “ …[i]t has also been consistently held that any activity consisting in offering goods and services on a given market is an economic activity…”  These decisions help to understand what “undertakings” means.

Article 101 does not apply to agreements between two or more legal entities forming a single economic organisation. Firms in the same group of companies can make legally binding agreements with each other to which Article 101 does not apply. This test is to determine whether the parent company has a decisive influence on the other firms in determining the company’s commercial policy. For these purposes, it is necessary to analyse all relevant elements related to the economic, organisational and legal connections that link the subsidiary to the parent company; these will vary depending on the situation. 

TFEU 101 does not apply “to a contract between two or more people that create a single economic entity, to a contract with no significant impact on trade between Member States, to a contract that is not between undertakings, and most importantly, to a deal that meets the standard of Article 101(3)”. 

Article 101(3) provides that agreements, decisions or related practices have to satisfy two positive and two negative conditions. The positive conditions are that an agreement must contribute to developing the production or distribution of goods or to supporting technical or economic progress and in either case must allow consumers a fair share of the resulting benefit. The negative conditions apply where restrictions are imposed on the undertakings concerned which are not required to satisfy either of the positive conditions and which afford those undertakings the probability of eliminating competition in respect of a significant share of the products in question. If a party wants to take benefit from Article 101, they must satisfy the four conditions in Article 101(3) at the same time.

1.2 TFEU Article 102

Article 102 prevents undertakings that hold a dominant condition in the EU market from abusing business between the Member States. It places private obligations on dominant firms to ensure that they do not distort markets, treat customers unfairly or reduce any threat presented by competition by excluding competitors, specifically by:

“ (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(d) making 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.”

Two constitutive facts trigger the exercise of Article 102 TFEU: dominance and abuse of dominance. 

1.2.1 Dominance 

Article 102 TFEU applies only where an undertaking has a dominant position in a particular market. In Hoffmann-La Roche v Commission and other EU case law, a firm is dominant if it has a position giving it economic power to act widely independent of competitive pressures. 

1.2.2 Abuse of dominance

Abuse could be thought of as non-competitive conduct that undermines effective competition. Abuse has no legal description in the Treaty or any regulation. TFEU Article 102 points out actions that can be an abuse of dominance in the EU market. 

Determining the market and market power are two essential elements for implementing Articles 101 and 102. The Commission defined “relevant market” on 9 December 1997.  The definition relates to its product and geographical aspects. The Small but Significant Non-transitory Increase in Prices (SSNIP) test is used to identify the relevant market. “Market power” is the ability to raise prices profitably over a period or to act with similar effect by restricting output or limiting customer choice. Commission guidance points out that a firm’s market share provides a first indication as to the present competitors.  Paragraph 14 and 15 of the guidance states that low market share suggests lack of dominant power and that, as market share increases and is maintained over longer periods, the more likely it is that the firm will have significant market power.

1.3 Merger Control 

The European Commission has jurisdiction over “concentrations”, mergers between two or more entities in a corporate structure that might or might not impair competition. Mergers must follow policies and regulations set by the Commission. In the European Union, the merger control system is governed under Regulation 139/2004, the EUMR, which applies to concentrations in the form of mergers, acquisitions or joint ventures that cross certain thresholds. For instance, if a merger might considerably affect competition in the EU market the parties must apply for prior approval from the Commission before the merger can proceed. The Commission must be notified of any merger with an EU dimension prior to its implementation. 

After notification, the Commission has 25 working days to examine the arrangement, which is referred to as a Phase 1 investigation. At the end of a Phase 1 examination, the merger may be accepted unconditionally, or conditionally, i.e. provided that the transacting parties are willing to undertake certain commitments (behavioural or structural) to reduce competition concerns in their merger.  Alternatively, if the Commission requires  detailed analysis, the case may be referred to a Phase 2 investigation. At Phase 2, the parties might propose to make specific commitments. If the Commission accepts these, then an independent trustee may be appointed to ensure compliance with the proposed commitments/behavioural remedies.

The Commission can propose a package of remedies that the parties should undertake to reduce its concerns with regards to anti-competitive behaviour. Such remedies often involve behavioural remedies such as providing access to facilities/technologies or a commitment to conclude specific exclusive contracts. Disputes can arise if parties (perhaps third parties upon which rights have been conferred) disagree on the interpretation of the remedies. These remedies often use words like “reasonable” and “fair”, which are open to interpretation.  If so, their implementation can be difficult to monitor. Furthermore, the beneficiaries may not be explicitly identified in advance. The Commission can in those cases require the parties to agree to arbitration, which might allow a third-party beneficiary to enforce its right to the remedies through the arbitration process. This subject will be examined in more detail in chapter 3.

These provisions operate in two main ways: via public and via private enforcement.

2. Enforcements in EU Competition Law

In most jurisdictions, enforcement of competition law operates at two levels: public and private. In this section, I will describe both routes to enforcement. In addition to a general specification, I will discuss the interaction of both routes to enforcement and especially the significance of private enforcement. 

2.1 Public Enforcement 

Public enforcement can be described as the enforcement of competition laws by state authorities, for instance by an anti-trust commission or a prosecutor charged with detecting and sanctioning violators of competition rules. A public enforcement system is the primary process for implementing the competition rules in the EU by the Commission and Member States’ national competition authorities (NCAs). In the period 2000–2004 the European Commission made significant achievements in its actions against cartels and gathered €3.5 billion were gathered in penalties. Public enforcement of competition law in the EU reached maturity in 2004, and significant changes in the system were made with effect from that year, as Regulation 1/2003 came into effect.

2.1.1 Regulation 1/2003

Regulation 1/2003 forms the basis of the modernised enforcement regime. The Regulation made fundamental changes to how TFEU Articles 101 and 102 are applied. Before it, according to Regulation 17, the Commission had the primary role in the enforcement of EU competition law. However, NCAs were given a more significant role in Regulation 1/2003. Additionally, the regulation was intended to support more private enforcement of competition law. Private enforcement will be discussed in section 2.2.2.

In general, Regulation 1/2003 copes with two issues. Firstly, it makes Article 101(3) directly enforceable and sets out the primary structure in which the Commission, NCAs and national courts are expected to cooperate in the decentralised regime. Secondly, it maintains the authority and procedures of the Commission in the examination of competition issues.

The Commission might apply EU regulations through two types of verdict: Article 7 of Regulation 1/2003, which are decisions to prohibit, and Article 9 of the Regulation, which are decisions on commitments. A verdict under Article 7 prohibits anti-competitive conduct based on the detection of a violation. Decisions to prohibit, after being approved by the courts, set a statutory precedent and have a dissuasive influence, particularly when combined with a penalty. The Commission will decide to prohibit anti-competitive behaviour under Article 7, where the main objective is to punish past behaviour. Prohibition decisions are generally justified in detail and clarify the Commission’s theory of damage thoroughly, which gives guidance to market competitors. For this reason, the Commission is more likely to choose to prohibit if the threat to competition is substantial and they wish to establish a legal precedent. 

Additionally, Regulation 1/2003 gave the EU Commission a new tool for implementing EU competition rules, the “commitment decision” procedure (Article 9), which was intended to bring a formal conciliation procedure into EU competition law. Article 9 of Regulation 1/2003 reads “[w]here the Commission intends to adopt a decision requiring that an infringement be brought to an end and the undertakings concerned offer commitments to meet the concerns expressed to them by the Commission in its preliminary assessment, the Commission may by decision make those commitments binding on the undertakings. Such a decision may be adopted for a specified period and shall conclude that there are no longer grounds for action by the Commission.” Under the Article the Commission adopts commitments proposed by a firm if they properly address the concerns it has officially communicated to the firm, propose sound solutions to the issue it has identified and obtain an actual alteration in the markets. The Commission issues a formal decision to accept the commitments proposed by the company, and where it accepts them, it may impose a fine if they are breached by a party to the commitment(s).

Commitment decisions have a number of benefits over prohibition decrees. Firstly, the effect on the market is faster and more resolution of the competition concerns may occur than would be possible for the same situation under Article 7. Secondly, Article 7 intends to ban, and sanction. breaches committed in the past; Article 9 looks forward, committing a firm to particular conduct or beyond merely respecting the law. For these reasons, commitments are more effective at preventing competition concerns from returning in the future, while Article 7 decisions depend on the dissuasive impact of the penalty. Thirdly, better and quicker application of structural and behavioural measures aim to reduce infringements, not simply punish them.

2.2 Private Enforcement

It can be seen that the Commission and NCAs have a significant role in detecting, punishing and dissuading infringements of the EU competition law rules. Regulation 1/2003 envisages enforcement not only by the competition authorities but also between private parties. Private enforcement can often be described as a claim lodged by an individual or organisation with a court, to persuade it to order compensation for damage suffered or to introduce injunctive relief. Commissioner Monti stressed that the likelihood of victims of anti-competitive behaviour, including consumers, claiming for damage arising from such conduct would strengthen the dissuasive effect of anti-trust rules and would help create a stronger culture of compliance and enforcement. Private enforcement of competition law was made more efficacious by the EU Damages Directive in November 2014. This section will continue with a short description of private enforcement procedures before that directive, then the Damage Directive will be the main focus of the following sub-section.

2.2.1 Private enforcement before the Damage Directive

Until 2001 no trial examined, or discussion explored whether, the member states have a responsibility to maintain a remedy in damages where loss has occurred through a violation of the competition rules. However, in Courage Ltd v Crehan, the Court of Justice explained the situation, clearly pointing out a right to damages.

The decision in Courage Ltd v Crehan was a turning point in the private enforcement of competition law, particularly the implementation of Article 101 and 102. The Court of Justice expressed that the effectiveness of Article 85 (TFEU Article 101) would be jeopardised if individuals do not claim for damage caused by a deal or by behaviour limiting or distorting competition. Also, the presence of such legal enforcement will support competition law in the EU and discourage agreement tending to limit competition. In this respect, private enforcement would create vital support to preserve competition in the EU.

In the case Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA the Court of Justice reached a similar decision to Crehan. For the better efficacy of Article 101, it held that “any individual can claim compensation for the harm suffered where there is a causal relationship between that harm and an agreement or practice prohibited under Article 81 EC”. 

2.2.2 The Damages Directive (2014) 

The Damage Directive was published on 26 November 2014. The primary focus of the Directive is to ensure that an individual or legal person who has faced damage owing to a violation of competition law should have the right to demand and receive full indemnity. This Directive is the first EU legislation to address the private rights of action for anti-trust violations. The Damage Directive comprehends significant regulations on issues such as the standard of evidence and the impact of NCAs’ decisions. However, there is no specific explanation of the calculation of interest in the Directive, which stresses that victims should not be overcompensated, thus restricting the scope for member states to impose punitive, plural or parallel damages. 

The Damages Directive’s Chapter I contains matter, content and definitions. The fundamental ideas of the Damages Directive, which takes a similar line to judgments such as Crehan, are set out in Article 3, which points out that the victims of anti-competitive conduct should be compensated. Passing-on and indirect purchasers

In accordance with the case law of the European courts, the Damage Directive emphasises that any person suffering harm as a result of anti-competitive behaviour should be able to demand indemnification regardless of where they are located in the supply chain. For this reason, an indirect purchaser has the right to launch claims against cartel members. In the judgment of 5 June 2014 in Kone AG and Others v ÖBB-Infrastruktur AG it was pointed out by the CJEU that it is not required that a plaintiff directly purchased goods from the cartel; the claimant could claim compensation from a cartel for inflated costs paid to third parties as a result of cartel behaviour. The Damage Directive presents the possibility that exaggerated prices charged to a direct buyer can be passed on to an indirect buyer, but it places the onus on the defendant to show that the overcharge has not been transmitted to the indirect customer, or not completely. Disclosure of Evidence

The Damage Directive  Article 5(1)  gives national courts the right to demand the disclosure of evidence from a respondent, or competition authority, or a third party. This is intended to provide claimants or respondents with a minimum level of access to the evidence, to assist them to demonstrate their claim for anti-trust damages or mount a defence to such a charge. The disclosure provisions try to counterbalance this by requiring that disclosed documents be kept private and that the evidence be specified as narrowly as possible. The Directive Article 5(4) states that courts must take  precautions to maintain confidentiality of evidence, where this includes private data.


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1 European Community, XXIXth Report on competition policy, European Commission Directorate-General for Competition, 1999

2 Council Regulation 139/2004 of 20 January 2004 on the control of concentrations between undertakings [2004] OJ L 24/1, which entered into force on 1 May 2004 and replaced the old Merger Regulation, Council Regulation 4064/89 of 21 December 1989 on the control of undertakings [1989] OJ L 395/1

3 Case C-41/90, Klaus Höfner and Fritz Elser v Macrotron GmbH, 23 April 1991, ECLI:EU:C:1991:161

4 Joined cases C-180/98 to C-184/98, Pavel Pavlov and Others v Stichting Pensioenfonds Medische Specialisten, 12 September 2000, ECLI:EU:C:2000:428

5 David Bailey, Richard Wish, Competition Law (9th edn, Oxford University Press, 2018)

6 Ibid (test of control) 

7 Suzanne Kingston, Greening EU Competition Law and Policy (Cambridge University Press, 2012)

8 David Bailey, Richard Wish, Competition Law (9th edn, Oxford University Press, 2018)

9 Case 85/76, Hoffmann-La Roche & Co. AG v Commission of the European Communities, 13 February 1979, ECLI:EU:C:1979:36

10 Official Journal of the European Communities, C 372, Volume 40, 9 December 1997

11 Communication from the Commission — Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, OJ C 45, 24.2.2009 p13

12 Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EUMR), OJ L 24/1, 20 January 2004, Article 2

13 Ibid

14 Kai Hüschelrath and Sebastian Peyer, Public and Private Enforcement of Competition Law: A Differentiated Approach, (2013) ZEW – Centre for European Economic Research Discussion Paper No. 29

15 Alison Jones, Brenda Sufrin, EU Competition Law (5th edn, Oxford University Press, 2014), Section 13

16 European Commission, ‘Cartel Statistics’ (2018). Accessed on <www.ec.europa.eu/competition/cartels/statistics/statistics.pdf>, 1 July 2019

17 Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, Regulation Article 13,3

18 EEC Council: Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty

19 Alison Jones, Brenda Sufrin, EU Competition Law (5th edn, Oxford University Press, 2014), Section 5, B, iii

20 Ibid

21 Competition policy brief, European Commission, Publication Issue 3 | March 2014, ISBN 978-92-79-35543-1, ISSN: 2315-3113

22 Ibid

23 Heike Schweitzer, Commitment Decisions under Art. 9 of Regulation 1/2003: The Developing EC Practice and Case Law (October 2008). EUI Working Papers LAW No. 2008/22. Available at SSRN: https://ssrn.com/abstract=1306245 or http://dx.doi.org/10.2139/ssrn.1306245

24 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102] of the Treaty, OJ [2003] L 1/1

25 Donncadh Woods, Ailsa Sinclair, David Ashton, Private enforcement of Community competition law: modernisation and the road ahead, (2014) Competition Policy Newsletter Number 2 – Summer

26 David Bailey, Richard Wish, Competition Law (9th edn, Oxford University Press, 2018)

27 Ibid

28 Case C-453/99, Courage Ltd v Bernard Crehan and Bernard Crehan v Courage Ltd and Others, Judgment of the Court of 20 September 2001, ECLI:EU:C:2001:465

29 Ibid, para. 26

30 Ibid, para. 27

31 Ibid

32 Case C-295/04, Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA, ECLI:EU:C:2006:461

33 Ibid, para. 61

34 David Bailey, Richard Wish, Competition Law (9th edn, Oxford University Press, 2018) 8,2

35 Thomas Funke, The EU Damages Actions Directive. Accessed on <www.gettingthedealthrough.com>, 27 July 2019

36 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349, 5 December 2014

37 Ibid

38 Case C‑557/12, Kone AG and Others v ÖBB-Infrastruktur AG, 5 June 2014, ECLI:EU:C:2014:1317

39 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349, 5.12.2014

40 Ibid

41 Thomas Funke, The EU Damages Actions Directive. Accessed on <www.gettingthedealthrough.com>, 27 July 2019

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