Chapter 26
INTRODUCTION TO EU COMPETITION LAW
Question 1
Which of the following statements is correct?
a. The “implementation” doctrine means that EU competition law applies to a situation where an anti-competitive agreement, decision or concerted practice has been entered into within the territory of the EU and been implemented there.
b. The “implementation” doctrine means that EU competition law applies to a situation where an anti-competitive agreement, decision or concerted practice is implemented within the territory of the EU irrespective of the place where the agreement, decision or concerted practice was entered into.
c. The “implementation” doctrine means that EU competition law applies to a situation where an anti-competitive agreement, decision or concerted practice has been entered into in the territory of the EU but been implemented outside the territory of the EU.
a. This is an incorrect answer. The ECJ endorsed the “implementation” doctrine in theWoodpulp cases. In these cases the undertakings concerned tried to rely on the argument that the application of EU competition rules founded exclusively on the economic repercussions within the internal market of conduct restricting competition occurring outside the EU was contrary to rules of public international law. This was rejected by the ECJ.
b. This is the correct answer. In the Woodpulp cases, the ECJ emphasised that infringement of Article 101 TFEU, such as the conclusion of an agreement which has had the effect of restricting competition within the internal market, consists of conduct made up of two elements: the formation of the agreement, decision or concerted practice and the implementation thereof. If the applicability of prohibitions laid down under competition law were made to depend on the place where the agreement, decision or concerted practice was formed, the result would obviously be to give undertakings an easy means of evading such prohibitions. The decisive factor is therefore the place where the agreement is implemented.
c. This is an incorrect answer. EU competition law is not applicable to a situation where an anti-competitive agreement, decision or concerted practice has been entered into in the territory of the EU but been implemented outside its territory.
Question 2
Which of the following will be regarded as an undertaking under EU competition law?
a. A lawyer who for a fee offers various legal services
b. A commercial agent
c. A subsidiary of a multinational corporation which has no freedom to determine its course of action on the relevant market and thus must carry out the policy imposed by the parent corporation
a. This is the correct answer. In Case C-41/90 Höfner and Elser v Macroton GmbH, the ECJ stated that the concept of an ‘undertaking’ covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed, and that any activity consistingof offering goods and services on a given market is an economic activity”
In Case C-309/99 Wouters v AlegemeneRaad van de Netherlandse Order van Advocaten, the ECJ held that individual members of the Dutch Bar carried out economic activities when they offer “for a fee, services in the form of legal assistance consisting of drafting of opinions, contracts and other documents and representing of clients in legal proceedings” and thus were undertakings under EU competition law;
b. This is an incorrect answer. A commercial agent who acts on behalf of a principal is not considered as an undertaking within the meaning of EU competition rules. However, the situation is different if he acts not as auxiliary but enjoys a degree of independence permitting him to enter into agreements prohibited under Article 101 TFEU. In Case T-325/01 DaimlerChryslerAG v Commission, the General Court decided that commercial agents of DailmerChrysler AG in Germany should be categorised as employees of DaimlerChrysler given that they did not bear any commercial risk when acting for DaimlerChrysler either when soliciting orders for sales of new cars or providing other services such as repairs and after sales services.
c. This is an incorrect answer. A subsidiary will not be regarded as a separate undertaking if both the parent undertaking and its subsidiary form a single economic unit within which the subsidiary has no real freedom to determine its course of action on the relevant market. This means that if a parent and its subsidiary, which is not capable of independent policy making, enter into an agreement which would in other circumstances be prohibited under Article 101 TFEU there will not be a breach of that provision since that agreement, (or concerted practice) will reflect the allocation of functions within the corporate body. This is known under EU competition law as the “single economic entity” doctrine.
Question 3
What are the main objectives of EU competition law?
a. To maintain the integrated internal market, to enhance consumer welfare and to ensure efficient allocation of resources;
b. To protect economic freedom of competitors and to maintain the integrated market
c. To safeguard EU interests and to promote the welfare of consumers
a, This is the correct answer
b. This is an incorrect answer
c. This is an incorrect answer