Monthly Archives: May 2015

Notice

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Notice

Article 19(3) notice in the European Union Law

Concept of Article 19(3) notice provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Notice published in the Official Journal by which the Commission informs undertakings, associations of undertakings and the general public of its intention to clear or exempt a certain notified agreement under Article 81 of the EC Treaty. The notice should contain a summary of the relevant application or notification and invite all inter-ested third parties to submit their observations within a time limit not less than one month. Publication shall have regard to the legitimate interest of undertakings in the protection of their business secrets.

(See: Article 19(3) of Regulation No 17.)

Carlsberg notice

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Carlsberg notice

Carlsberg notice in the European Union Law

Concept of Carlsberg notice provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Notice published in the Official Journal whereby the Commission informs third parties of a notification and invites them to submit infor-mation and/or comments concerning the notified case. The invitation contains a short summary of the case and is published in the Official Journal with the consent of the parties directly involved in the matter. This possibility of obtaining case-related information was first used by the Commission in the 'Carlsberg' case in 1992. In contrast to an () Article 19(3) notice, a Carlsberg notice is neutral and gives no indication on the preliminary position of the Commission.

As regards mergers, the Commission is obliged to publish the fact that a merger has been notified, at the same time indicating the names of the parties, the nature of the concentration and the economic sector involved.

(See: Notice on prior notification of a joint venture: Case 34.281 Carlsberg-Tetley (OJ C 97, 16.4.1992, p. 21); Article 4(3) of the merger regulation.)

Implementation

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Implementation

Implementing regulation in the European Union Law

Concept of Implementing regulation provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Legislative act by the Commission, based on an enabling regulation by the Council, which specifies Community law provisions. Examples of such secondary legislation adopted by the Commission in the area of competition law are Commission Regulation No 2842/98 on the hearing of parties in antitrust proceedings (OJ L 354, 30.12.1998), Commission Regulation No 447/98 on certain aspects of the merger control procedure (OJ L 61, 2.3.1998) and the various block exemp-tion regulations adopted by the Commission.

Comfort letter

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Comfort letter

Comfort letter in the European Union Law

Concept of Comfort letter provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Administrative letter sent to the notifying parties confirming informally and normally without any reasoning either: — that the Commission sees no grounds for action against an agree-ment under Article 81(1) of the EC Treaty, because it does not restrict competition and/or affect trade between Member States (negative clearance-type comfort letter), or — that the agreement fulfils the conditions for granting an exemption under Article 81(3) of the EC Treaty (exemption-type comfort letter).

Sunk costs

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Sunk costs

Sunk costs in the European Union Law

Concept of Sunk costs provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Sunk costs are () fixed costs that have already been incurred and cannot be recovered. They arise because some activities require specialised assets that cannot readily be diverted to other uses. Second-hand markets for such assets are therefore limited. Examples of sunk costs are investments in equipment that can only produce a specific product, the development of products for specific customers, advertising expenditures and R & D expenditures.

Market share

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Market share

Market share in the European Union Law

Concept of Market share provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Measure for the relative size of a firm in an industry or market, in terms of the proportion of total output, sales or capacity it accounts for. In addition to profits, one of the frequently cited business objec-tives of firms is to increase market share. This is because market share, economies of scale and profits are often positively correlated in market economies. In competition policy analysis, market shares are an important indicator for the existence of market power. In this respect, one should not only look at the absolute market share level, but also at the market share level relative to competitors. However, even firms with large market shares do not necessarily possess market power, for example, in cases where barriers to enter the market concerned ( Entry barriers) are very low and the threat of entry prevents the exercise of market power.

Network effect

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Network effect

Network effect in the European Union Law

Concept of Network effect provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Network effects arise when a product is more valuable to a user, the more users adopt the same product or compatible ones. Economists refer to this phenomenon as a network externality, because when additional consumers join the network of current consumers they have a beneficial 'external' impact on the consumers who are already part of the network.

Market power

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Market power

Market power in the European Union Law

Concept of Market power provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Strength of a firm in a particular market. In basic economic terms, market power is the ability of firms to price above marginal cost and for this to be profitable. In competition analysis, market power is determined with the help of a structural analysis of the market, notably the calculation of () market shares, which necessitates an examination of the availability of other producers of the same or of substitutable products ( Substitutability). An assessment of market power also needs to include an assessment of barriers to entry or growth ( Entry barriers) and of the rate of innovation. Furthermore, it may involve qualitative criteria, such as the financial resources, the vertical integration or the product range of the undertaking concerned.

Vertical agreement

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Vertical agreement

Vertical agreement in the European Union Law

Concept of Vertical agreement provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Agreement or concerted practice entered into between two or more undertakings each of which operates, for the purposes of the agree-ment, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services.

(See so-called 'vertical guidelines': Commission notice — guidelines on vertical restraints (OJ C 291, 13.10.2000, p. 1).)

Collecting society

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Collecting society

Collecting society in the European Union Law

Concept of Collecting society provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Association that collects payments made by users of intellectual property rights for the holders of such rights. For instance, a radio station, playing a record for which a record company holds a copy-right, has to pay a fee to a collecting society, which then transfers the payments to the record company.