Monthly Archives: June 2015

Consortium

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Consortium

Consortium in the European Union Law

Concept of Consortium provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): A group of independent companies working together for the fulfil-ment of a specific project. Consortia are frequent, for example, in the construction industry where large projects (buildings, motorways) require close cooperation between engineering, planning and construction companies. The Commission has issued a specific block exemption regulation concerning consortia between shipping compa-nies relating to the joint operation of liner transport services. These are liable to restrict competition within the common market and to affect trade between Member States and would otherwise be prohib-ited by Article 81(1) of the EC Treaty.

(See: Commission Regulation (EC) No 823/2000 of 19 April 2000 on the appli-cation of Article 81(3) of the Treaty to certain categories of agreements, decisions and practices between liner shipping companies (consortia) (OJ L 100, 20.4.2000, p. 24).)

AKZO procedure

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AKZO procedure

AKZO procedure in the European Union Law

Concept of AKZO procedure provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Procedural rule established by the European Court of Justice which has also been inserted into the mandate of the hearing officer and which concerns the disclosure of confidential documents or business information by the Commission. This rule says that where the Commission intends to disclose information while the company providing it wants this information to be treated as commercially sensitive (business secret or other confidential information), the Commission shall inform that company in writing of its intention and the reasons for it. Where the company concerned still objects to the disclosure of such information, but the Commission finds that the information is not protected and may therefore be disclosed, that finding shall be stated in a reasoned decision. This decision has to be notified to the company concerned, which must be given the oppor-tunity to bring its case before the European Court of First Instance with a view to having the Commission's assessments reviewed. The information may not be disclosed before one week after the decision has been notified.

(See: Judgment of the European Court of Justice of 24 June 1986 in Case 53/85 AKZO Chemie BV and AKZO Chemie UK Ltd v Commission, [1986] ECR, p. 1965, paragraph 29; Article 9 of Commission decision of 23 May 2001 on the terms of reference of hearing officers in certain competition proceedings (OJ L 162, 19.6.2001, p. 21).)

Dominant position

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Dominant position

Dominant position in the European Union Law

Concept of Dominant position provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): A firm is in a dominant position if it has the ability to behave inde-pendently of its competitors, customers, suppliers and, ultimately, the final consumer. A dominant firm holding such market power would have the ability to set prices above the competitive level, to sell products of an inferior quality or to reduce its rate of innovation below the level that would exist in a competitive market. Under EU competition law, it is not illegal to hold a dominant position, since a dominant position can be obtained by legitimate means of competi-tion, for example, by inventing and selling a better product. Instead, competition rules do not allow companies to () abuse their dominant position. The European merger control system ( Merger control procedure) differs from this principle, in so far as it prohibits merged entities from obtaining or strengthening a dominant position by way of the merger.

A dominant position may also be enjoyed jointly by two or more independent economic entities united by economic links in a specific market. This situation is called collective (or joint or oligopolistic) dominance. As the Court has ruled in the Gencor judgment, there is no reason, in legal or economic terms, to exclude from the notion of economic links the relationship of interdependence existing between the parties to a tight oligopoly within which those parties are in a position to anticipate each one another's behaviour and are therefore strongly encouraged to align their conduct in the market.

(See: Article 82 of the EC Treaty and Article 2(3) of the merger regulation; on collective dominance see also: Commission Decision No 97/26/EC of 24.4.1996 in Case IV/M.619 Gencor/Lonrho (OJ L 11, 14.1.1997, p. 30) and judgment of the Court of First Instance of 25.3.1999 in Case T-102/96 Gencor Ltd v Commission [1999] ECR, p. II-0753.)

Resources

See also

  • Collusion
  • Oligopoly

Franchising

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Franchising

Franchising in the European Union Law

Concept of Franchising provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): A special type of agreement whereby one undertaking (the fran-chiser) grants to the other (the franchisee), in exchange for direct or indirect financial consideration, the right to exploit a package of industrial or intellectual property rights (franchise) for the purposes of producing and/or marketing specified types of goods and/or services. This package typically relates to trademarks, trade names, shop signs, utility models, designs, copyrights, know-how or patents. A franchise agreement usually contains obligations relating to (1) the use of a common name/shop sign and a uniform presentation of contract premises and/or means of transport, (2) the communication by the franchiser to the franchisee of know-how, (3) the continuing provi-sion by the franchiser to the franchisee of commercial and technical assistance during the life of the agreement.

Downstream market

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Downstream market

Downstream market in the European Union Law

Concept of Downstream market provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Market at the next stage of the production/distribution chain, for example, the distribution and sale of motor vehicles would be a downstream market in relation to the production of motor vehicles.

Obligations

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Obligations

Obligations in the European Union Law

Concept of Obligations provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Requirements the Commission imposes on undertakings in order to be able to exempt a notified agreement or to declare a notified concentration compatible with the common market ( Conditions).

The breach of such obligations may result in the revocation of the Commission's decision.

(See: Article 8 of Regulation No 17; Articles 6(2) and 8(2) of the merger regula-tion; Commission notice on remedies (OJ C 68, 2.3.2001, p. 3).)

Foreclosure

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Foreclosure

Foreclosure in the European Union Law

Concept of Foreclosure provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Strategic behaviour by a firm or group of firms to restrict market access possibilities of potential competitors either () upstream or () downstream. Foreclosure can take different forms, from absolute refusal to deal to more subtle forms of discrimination such as the degradation of the quality of access. A firm may, for example, pre-empt important sources of raw material supply and/or distribution channels through exclusivity contracts, thereby causing a foreclosure of competitors.

Resources

See also

  • Entry barriers

Retailer

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Retailer

Retailer in the European Union Law

Concept of Retailer provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Firm at the end of the distribution chain, which normally buys a product from a wholesaler in order to sell it to the final consumer.

Specialisation Agreement

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Specialisation Agreement

Specialisation agreement in the European Union Law

Concept of Specialisation agreement provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): An agreement between undertakings relating to the conditions under which they specialise in the production of a narrow or specific range of goods and/or services. Agreements on specialisation can contribute to improving the production or distribution of goods, because the undertakings concerned can concentrate on the manu-facture of certain products and thus operate more efficiently and supply the products more cheaply. Specialisation agreements are divided into agreements whereby one participant gives up the manu-facture of certain products, or provision of certain services in favour of another participant (unilateral specialisation); agreements whereby each participant gives up the manufacture of certain products, or provision of certain services in favour of another participant (recipro-cal specialisation); and agreements whereby the participants under-take jointly to manufacture certain products, or provide certain services (joint production). The issue is covered by a specific block exemption regulation.

(See: Council Regulation (EC) No 2658/2000 of 29 November 2000 on the appli-cation of Article 81(3) of the Treaty to categories of specialisation agreements (OJ L 304, 5.12.2000).)

English clause

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English clause

English clause in the European Union Law

Concept of English clause provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Contractual agreement in the context of () single branding arrange-ments between a supplier and its customer (for example, a retailer), allowing the latter to purchase a product from other suppliers on more favourable terms, unless the 'exclusive' supplier accepts to supply the product under the same advantageous conditions. Despite the greater freedom to contract enjoyed by the customer, 'English clauses' tend to increase transparency between competing suppliers and thus facilitate collusion, particularly where such clauses oblige the customer to reveal the name of the alternative source to his 'exclusive' supplier. For this reason, 'English clauses' have to be looked at in the light of the circumstances of the particular case to assess their conformity with competition law.