Tag Archives: SU

Substitutability

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Substitutability

Substitutability in the European Union Law

Concept of Substitutability provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Measure of the extent to which products may be seen as inter-changeable from the viewpoint of producers or consumers. A firm's pricing policy for a specific product is disciplined if consumers have the possibility to buy another product, which they judge as being equivalent by its nature, use and/or price (demand-side substitution). Additional competitive constraint on the firm may stem from produc-ers of other products capable of switching their production without delay towards the product in question at negligible cost and willing to enter into competition on the market segment concerned (supply-side substitution). Product substitutability is an important element in defining the relevant product market ( Relevant market).

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.

Sufficient interest

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Sufficient interest

Third parties can be heard only if they show “sufficient interest” (Article 27(3) of Regulation 1/2003)

Other natural or legal persons, who have shown sufficient interest, must be informed in writing of the nature and subject matter of the procedure and set a time-limit within which they may make known their views in writing (Article 13 of Reg. 773/2004).

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Decisions as to whether third parties are to be heard are taken by the Hearing Officer after consulting the Director responsible for the case. 1 Any third party applying directly to the case team should be told to address its application, including a statement explaining the applicant's interest in the outcome of the procedure, to the Hearing Officer. If the Hearing Officer accepts the application, the case team will inform third parties in writing of the nature and subject matter of the procedure and afford them the opportunity to make known their views in writing (do not forget to request a non-confidential version of the reply), pursuant to Article 13 (1) of Regulation 773/2004.

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Third parties have no right as such to obtain a non-confidential version of the SO. In practice, third parties can be informed by way of a concise letter setting out the “nature and subject-matter” of the case, or by a summary, or a non-confidential version of the SO (case specific). Third parties may complain to the case team about the appropriateness of the information they received for the purposes of making known their views, and refer the matter for decision to the Hearing Officer in case of disagreement with the case team 2 .

Other Considerations

The Hearing Officer may, where appropriate and after consulting the Director responsible, decide to afford interested third parties the opportunity to express their views at the oral hearing 3 .

Resources

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References

  • Information about Sufficient interest in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Notes


[Note 1] Article 5 of the HO Terms of Reference. $$11% Article 7(2) of the HO Terms of Reference.
[Note 3] Article 6(2) of the HO Terms of Reference.

Further Reading

  • Information about Sufficient interest in “An Introduction to EU Competition Law”, Moritz Lorenz (Cambridge University Press)

Summary of the decision

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Summary of the decision

Summary of the decision

Pursuant to Article 30(2) Reg. 1/2003, the publication in the OJ shall state the – names of the parties, – main content of the decision, – including any penalties imposed.

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These elements therefore have to be contained in the published summary of the decision.

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The summary is often based on the Communication to the College or the summary prepared for the Advisory Committee.

Other Considerations

In order to make clear that the summary of the decision is not a decision itself, the heading should read “Summary of the Commission's decision”.

Resources

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References

  • Information about Summary of the decision in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Further Reading

  • Information about Summary of the decision in EU Competition Procedure, 3rd. Edition, Edited by Luis Ortiz Blanco (Oxford University Press)

Supplementary Statement of Objections

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Supplementary Statement of Objections

New facts or evidence after the SO: Supplementary Statement of Objections

Due observance of the rights of defence requires that the undertakings and associations of undertakings concerned be afforded the opportunity to make known their views on the truth and relevance of the facts, objections and circumstances put forward by the Commission. 1 If, after the SO has been issued, new facts or evidence appear as a result of the addressees' replies, investigation measures taken separately or a new complaint, the undertakings in question have to be given an opportunity to give their explanations on these new aspects. If the undertakings have not had the opportunity to present their observations on such new aspects, they cannot be relied on in the final decision.

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If these new elements justify raising supplementary objections in substance, or they imply a modification in the intrinsic nature of the infringement with which an undertaking is charged, they have to be communicated to the undertakings concerned by a supplementary SO in due form 2 . A supplementary SO can also be issued to correct any omissions of the first SO 3 .

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The due form is not respected if the Commission simply dispatches a copy of an SO sent to another party and solely for the purposes of information, when the supplementary SO alters the intrinsic nature of the infringement with which an undertaking is charged and widens the scope of the objections presented against it. 4 Failure to do so constitutes violation of the rights of defence. This is particularly true where it cannot be excluded that the procedure might have had a different result if the Commission had properly notified a supplementary SO to the undertaking in question and if it had prescribed a period of time for that undertaking to submit its observations with respect to the new elements included in that SO. 5

Other Considerations

It is not necessary to repeat all the objections in the supplementary SO; it suffices to simply state what is new with regard to the previous SO and what has not been submitted to the undertaking previously.

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Before issuing a supplementary SO, a State of Play meeting will normally be offered to the parties. The rules on setting the time limit for the reply to an SO apply, although a shorter time limit will typically be set in this context 6 .

Resources

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References

  • Information about Supplementary Statement of Objections in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Notes


[Note 1] Case 85/76 Hoffman-La Roche v Commission [1979] ECR 461; Joined Cases T-10/92, T-11/92, T-12/92 and T-15/92 SA Cimenteries CBR and Others v Commission.
[Note 2] Case C-167/04 P, JCB Service, [2004] ECR II-49, paragraph 52. See also Best Practices Notice, paragraph 110.
[Note 3] Case C-167/04 P, JCB Service, [2004] ECR II-49, paragraphs 100-101.
[Note 4] Joint cases T-39/92 et T-40/92, Groupement des cartes bancaires 'CB' et Europay International, in particular paragraph 58.
[Note 5] Ibid, paragraphs 46 to 60, in particular paragraphs 46, 52, 55, 58 et 60, Rec. p. II-72.
[Note 6] See Best Practices Notice, paragraph 110.

Further Reading

  • Information about Supplementary Statement of Objections in “An Introduction to EU Competition Law”, Moritz Lorenz (Cambridge University Press)

Access to file in case of Supplementary Statement of Objections (SSO) or Letter of facts

The procedural rights which are triggered by the sending of the initial Statement of Objections apply mutatis mutandis in case a Supplementary Statement of Objections is issued. Access to the evidence gathered after the initial Statement of Objections up to the date of the Supplementary Statement of Objections will also be provided. In case a letter of facts is issued, supplementary access will in general be granted to evidence gathered after the Statement of Objections up to the date of the said letter of facts. However, in cases where the Commission only intends to rely upon specific evidence that concerns one or a limited number of parties and/or isolated issues (in particular those regarding the determination of the amount of the fine or issues of parental liability), access will be provided only to the parties directly concerned and to the evidence upon which the Commission intends to rely.

Resources

See Also

References

  • Information about Supplementary Statement of Objections in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Further Reading

  • Information about Supplementary Statement of Objections in EU Competition Procedure, 3rd. Edition, Edited by Luis Ortiz Blanco (Oxford University Press)

Supplementing the application

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Supplementing the application

Supplementing the application before a decision on conditional immunity

So long as no other immunity application has been received in respect of the same facts, the application may be supplemented by further evidence. The applicant bears the risk of not getting conditional immunity if another application is received in the meantime.

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If during the period when decision on conditional immunity has not yet been taken a second immunity application is received, the Commission evaluates the application from the first applicant on the basis of the information it had received up to the moment when the second application was received (see section 4.3.5).

Resources

See Also

References

  • Information about Supplementing the application in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Further Reading

  • Information about Supplementing the application in EU Competition Procedure, 3rd. Edition, Edited by Luis Ortiz Blanco (Oxford University Press)

Submission of an informal commitments offer

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Submission of an informal commitments offer

Submission of an informal commitments offer

Should the parties, after being confronted with the Commission's concerns in the State of Play meeting, decide to offer commitments, they need to convince the Commission that this offer is serious and credible 1 . For this purpose, the parties should outline the main elements of the – at this stage informal – commitment proposal. This may, in practice, happen by submitting a “term sheet” describing the main elements of the commitments, but sometimes already with a first draft of a commitment text.

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Once the case team is convinced that the commitments informally proposed by the undertaking may address the competition concerns and that the undertaking is seriously interested in submitting adequate formal commitments, it should propose to draft a Preliminary Assessment.

Resources

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References

  • Information about Submission of an informal commitments offer in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Notes


[Note 1] See the Best Practices Notice, at paragraph 121: “Once the Commission is convinced of the undertakings' genuine willingness to propose commitments which will effectively address the competition concerns, a Preliminary Assessment will be issued”.

Further Reading

  • Information about Submission of an informal commitments offer in “An Introduction to EU Competition Law”, Moritz Lorenz (Cambridge University Press)