Monthly Archives: July 2015

Passive sales

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Passive sales

Passive sales in the European Union Law

Concept of Passive sales provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Sales in response to unsolicited requests from individual customers, including delivery of goods or services to such customers. Sales generated by general advertising or promotion in the media or on the Internet that reaches customers in other distributors' exclusive terri-tories or customer groups, but is at the same time a reasonable way to reach customers outside those territories or customer groups (for instance, in non-exclusive territories or in one's own territory), are normally considered passive. Restrictions on passive sales in vertical agreements are hard-core restrictions and fall outside the Commission's block exemption regulation on vertical restraints.

(See: Commission Regulation 2790/99 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices (OJ L 336, 22.12.1999); Commission notice — guidelines on vertical restraints (OJ C 291, 13.10.2000).)

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  • Active sales

Undertaking

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Undertaking

Undertaking in the European Union Law

Concept of Undertaking provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): For the purpose of EU antitrust law, any entity engaged in an economic activity, that is, an activity consisting in offering goods or services on a given market, regardless of its legal status and the way in which it is financed, is considered an undertaking. To qualify, no intention to earn profits is required, nor are public bodies by defini-tion excluded. The rules governing concentrations speak of 'undertakings concerned', that is, the direct participants in a merger or in the acqui-sition of control.

(See for details: Commission notice on the concept of undertakings concerned (OJ C 66, 2.3.1998).)

Predatory pricing

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Predatory pricing

Predatory pricing in the European Union Law

Concept of Predatory pricing provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): A (deliberate) strategy, usually by a dominant firm, of driving competi-tors out of the market by setting prices below production costs. If the predator succeeds in driving existing competitors out of the market and in deterring the future entry of new firms, he can subsequently raise prices and earn higher profits. Predatory pricing by dominant firms is prohibited by EU competition law as () abuse of a () dominant position. Prices set below average variable costs can be presumed to be predatory, because they have no other economic rationale than to eliminate competitors, since it would otherwise be more rational not to produce and sell a product that cannot be priced above average variable cost. Where prices are set below average total (but above variable) costs, some additional elements proving the predator's intention need to be established in order to qualify them as predatory, given that other commercial considerations, like a need to clear stocks, may lie at the heart of the pricing policy.

Extra-territoriality

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Extra-territoriality

Extra-territoriality in the European Union Law

Concept of Extra-territoriality provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Term normally used to describe the exercise by a sovereign State of jurisdiction over foreigners in respect of acts done outside the borders of that State. One could say that — in a very broad sense — the EU applies its competition rules in an extra-territorial manner when it makes use of the () effects doctrine.

State measure

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State measure

State measure in the European Union Law

Concept of State measure provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Law, ministerial decree, decision or other administrative act adopted by a Member State. A Member State's omission to act may also constitute a measure. The Commission may start () infringement proceedings if State measures, taken in relation to () public under-takings and undertakings to which Member States grant special or exclusive rights, contravene EU competition law.

EEA

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EEA

EEA in the European Union Law

Concept of EEA provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): EEA stands for European Economic Area. The EEA agreement, to which all EU Member States and the EFTA members Iceland, Liechtenstein and Norway are parties, entered into force on 1 January 1994. The objective of the agreement is to establish a dynamic and homogeneous European Economic Area, based in substance on common rules and equal conditions of competition. Formally, two separate legal systems coexist within the EEA: the EEA agreement is applied when trade between EFTA members and the Community or between EFTA States is affected; Community law when trade between EU Member States is affected. The EEA agreement is applied both by the European Commission and by the EFTA Surveillance Authority ( ESA).

The division of jurisdiction and a framework for cooperation between the Commission and ESA are laid down in the agreement.

(See: Decision of the Council and the Commission of 13 December 1993 on the conclusion of the agreement on the European Economic Area between the European Communities, their Member States and the Republic of Austria, the Republic of Finland, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Kingdom of Sweden and the Swiss Confederation (94/1/ECSC, EC) (OJ L 1, 3.1.1994), as amended following the non-ratification of the EEA agreement by Switzerland.)

Absolute territorial protection

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Absolute territorial protection

Absolute territorial protection in the European Union Law

Concept of Absolute territorial protection provided by the “< policy" (Antitrust and control of concentrations, published in 2002): Practice by manufacturers or suppliers, relating to the resale of their products and leading to a separation of markets or territories. Under absolute territorial protection, a single distributor obtains the rights from a manufacturer to market a product in a certain territory, and other distributors are prohibited from selling actively or passively into this territory.

Resources

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  • Passive sales
  • Hard-core restrictions

Conditions

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Conditions

Conditions in the European Union Law

Concept of Conditions provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Requirements imposed by the Commission which need to be fully complied with by the parties concerned, in order to allow the Commission to declare an otherwise incompatible concentration compatible with the common market, or to exempt an otherwise illegal agreement.

(See: Article 8 of Regulation No 17; Articles 6(2) and 8(2) of the merger regula-tion; Commission notice on remedies, paragraph 12 (OJ C 68, 2.3.2001, p. 3).)

Resources

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  • Obligations

Joint control

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Joint control

Joint control in the European Union Law

Concept of Joint control provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Joint control exists where two or more undertakings or persons have the possibility of exercising decisive influence over another undertak-ing. Decisive influence in this sense normally means the power to block actions that determine the strategic commercial behaviour of an undertaking. Joint control can be acquired legally or de facto.

(See further: Commission notices on the concept of full-function joint ventures and on the concept of concentration (OJ C 66, 2.3.1998, pp. 1 and 5).)

Monopoly

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Monopoly

Monopoly in the European Union Law

Concept of Monopoly provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Market situation with a single supplier (monopolist) who — due to the absence of competition — holds an extreme form of market power. It is tantamount to the existence of a dominant position. Under monopoly, output is normally lower and price higher than under competitive conditions. A monopolist may also be deemed to earn supra-normal profits (that is, profits that exceed the normal remuner-ation of the capital). A similar situation on the demand side of the market, which is with a single buyer only, is called monopsony.