Monthly Archives: February 2015

Trade

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Trade

Effect on trade between Member States in the European Union Law

Concept of Effect on trade between Member States provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): A necessary condition for the application of EU antitrust rules. Articles 81 and 82 of the EC Treaty are only applicable if there may be a direct or indirect, actual or potential influence on the flow or pattern of trade between at least two Member States of the EU. An effect on trade exists in particular where national markets are partitioned or the structure of competition within the common market is affected. Anti-competitive agreements or conduct that have no effect on trade, therefore, fall outside the scope of EU competition rules and may only be dealt with by national legislation.

The merger regulation, by contrast, applies where a concentration has a Community dimension defined in terms of () turnover thresholds.

Unbundling

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Unbundling

Unbundling in the European Union Law

Concept of Unbundling provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Separation of the various components of production, distribution and service in order to introduce greater elements of competition to these segments of an industry. 'Functional unbundling' requires monopolis-tic utilities to provide access to (part of) their distribution or service network, in exchange for an access fee. 'Structural unbundling' makes complete vertical separation necessary and obliges monopolistic util-ities to divest their production, their distribution or their service assets.

Marginal costs

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Marginal costs

Marginal costs in the European Union Law

Concept of Marginal costs provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Costs born by a firm of producing an additional unit of output. Marginal costs are a function of variable costs only, since fixed costs do not vary with output.

Relevant market

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Relevant market

Relevant market in the European Union Law

Concept of Relevant market provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): The definition of a relevant market is a tool to identify and define the boundaries of competition between firms. It establishes the frame-work within which the Commission applies competition policy princi-ples. The main purpose of market definition is to identify in a system-atic way the competitive constraints that the undertakings involved face. Market definition makes it possible, inter alia, to calculate the respective () market shares of the undertakings active on the relevant market, which convey meaningful information regarding () market power for the purposes of assessing dominance ( Dominant position). A relevant market is defined according to both product and geographic factors. In general terms, a relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable ( Substitutability) by reason of product characteristics, prices and intended use. Products and/or services that could readily be put on the market by other producers without significant switching cost or by potential competitors at reasonable cost and within a limited time span also need to be taken into account. The relevant geographic market comprises the area in which the undertakings concerned are involved in the supply and demand of products or services, in which the conditions of competi-tion are sufficiently homogeneous and which can be distinguished from neighbouring areas, because the conditions of competition are appreciably different in those areas.

(See: Commission notice on the definition of relevant market for the purposes of Community competition law (OJ C 372, 9.12.1997, p. 5).)

Nullity

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Nullity

Nullity in the European Union Law

Concept of Nullity provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Under Article 81(1) of the EC Treaty, agreements between undertak-ings that restrict competition and may affect trade between Member States are prohibited. According to Article 81(2) of the EC Treaty they are void unless they are exempted from the prohibition under certain conditions laid down in Article 81(3) of the EC Treaty.

Delegation of powers

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Delegation of powers

Delegation of powers in the European Union Law

Concept of Delegation of powers provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): The Commission, as a collegiate body, delegates certain decision-making powers to its individual commissioners (empowerment procedure) or to directors-general (delegation procedure). A delega-tion of powers allows management, administrative, procedural and routine matters to be decided by the individual commissioner or director-general concerned. This mechanism ensures that Commission meetings are not overloaded and the decision-making process is not paralysed.

(See: Articles 13 and 14 of the rules of procedure of the Commission of 29 November 2000 (OJ L 308, 8.12.2000, p. 26).)

Letter

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Letter

Article 6 letter in the European Union Law

Concept of Article 6 letter provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Administrative letter by which the Commission informs a complainant of its intention to reject the complaint. This so-called Article 6 letter defines the Commission's preliminary position regarding a complaint, and gives the complainant an opportunity to make further observa-tions and comments within a specified time limit. Because of its nature as a preparatory and preliminary document, an Article 6 letter cannot be challenged in Court as a separately reviewable act. However the complainant may insist that a final decision rejecting his complaint be taken, which in turn is subject to judicial review by the Court of First Instance.

(See: Article 6 of Regulation No 2842/98 on the hearing of parties in certain proceedings under Articles 81 and 82 of the EC Treaty (OJ L 354, 1998, p. 18).)

Article 11 letter in the European Union Law

Concept of Article 11 letter provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Written request for information the Commission addresses to under-takings and associations of undertakings, as well as to governments and competent authorities of the Member States, in order to obtain the information necessary to conduct its investigations. Such requests can be sent to companies which are suspected of infringements, are party to a concentration or to third parties who may be in a position to clarify certain matters which are relevant for the investigation in question.

(See: Article 11 of Regulation No 17 and Article 11 of the merger regulation.)

Single branding

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Single branding

Single branding in the European Union Law

Concept of Single branding provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): This term covers both non-compete obligations and quantity forcing. A non-compete obligation is an obligation or incentive scheme in a supply or distribution agreement which causes the buyer not to manufacture, purchase, sell or resell products which compete with the contract products or to purchase at least 80 % of his requirements of that type of product from the supplier. Quantity forcing on the buyer is a weaker form of a non-compete obligation, where incentives or obligations agreed between the supplier and the buyer make the latter concentrate his purchases to a large extent, but less than 80 %, on the brand(s) of one supplier. Single branding may take the form of a direct obligation not to purchase competing brands (often called 'ties'), but may, for example, also take the form of minimum purchase requirements, quantity rebate schemes or loyalty rebate schemes. The possible competition risks are () foreclosure of the market to competing suppliers, facilitation of () collusion between suppliers in the case of cumulative use and, where the buyer is a retailer, a loss of in-store () inter-brand competition.

Regulation

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Regulation

Regulation No 17 in the European Union Law

Concept of Regulation No 17 provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): First implementing regulation in the field of EU competition law, setting out the system of () notifications, procedural instruments for the enforcement of antitrust law and vesting the European Commission with far-reaching powers, in particular as regards inves-tigation, penalising of infringements by undertakings and exemption of agreements under Article 81(3) of the EC Treaty.

The ongoing revision of Regulation No 17 aims at increasing involve-ment of national courts and competition authorities in the enforce-ment of EU antitrust law (decentralisation) and would allow the Commission to focus its limited resources on the most serious infringements and on policy development. Adoption of a new basic regulation by the Council is envisaged in the course of year 2002.

(See: Council Regulation (EEC) No 17: First regulation implementing Articles 85 and 86 (now 81 and 82) of the Treaty (OJ 13, 21.2.1962, p. 204).)

Selective distribution

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Selective distribution

Selective distribution in the European Union Law

Concept of Selective distribution provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Distribution system whereby a supplier enters into (vertical) agree-ments with a limited number of selected dealers in the same geographic area. Selective distribution agreements, on the one hand, restrict the number of authorised distributors. On the other hand, they prohibit sales to non-authorised distributors: this leaves authorised dealers only other appointed dealers and final customers as possible buyers. Selective distribution is almost always used to distribute branded final products.

The possible competition risks are a reduction in intra-brand compe-tition, the facilitation of () collusion between suppliers or buyers and the foreclosure of certain type(s) of distributors, especially in the case of cumulative effects of parallel networks of selective distribution in a market. Purely qualitative selective distribution is, in general, considered to fall outside the prohibition of Article 81(1) of the EC Treaty, provided three conditions are satisfied. Firstly, the nature of the product in question must necessitate a selective distribution system. Secondly, resellers must be chosen on the basis of objective criteria of a qualitative nature. Thirdly, the criteria laid down must not go beyond what is necessary.

Resources

See also

  • Vertical agreement