Chapter 8 Interactive key cases
Article 101 TFEU
Agreement providing for technical cooperation and joint research on the development of a bus equipped with electric transmission.
Exemption granted: the agreement allowed each party to concentrate on the areas within its own expertise.
Ahlström & Ors v Commission (Woodpulp) (Cases C-89, 104, 114, 116–117, 125–129/85) [1993] ECR I-1307 – Facts
Challenge to a finding of a concerted practice in relation to a system of quarterly price announcements.
Ahlström & Ors v Commission (Woodpulp) (Cases C-89, 104, 114, 116–117, 125–129/85) [1993] ECR I-1307 – Principle
There was no concerted practice, since there was no evidence of communication between the companies and the parallel pricing was the result of the normal operation of the oligopolistic woodpulp market.
Mr and Mrs Wilkin claimed that their loan agreement with the brewery infringed Article 101(1).
Assessment of the effect on trade between Member States will take into account the ‘legal and economic context’ of an agreement.
Domestic appliance manufacturers undertook to phase out washing machines with low energy efficiency. The agreement was found to be anti-competitive because it restricted consumer choice and raised production costs for some manufacturers.
Exemption granted: there were less restrictive ways to reduce energy consumption, such as informing the consumer about energy costs. However, since this would not be the most effective means, the agreement was necessary to achieve the benefits.
Établissements Consten SA and Grundig-Verkaufs-GmbH v Commission (Cases 56 & 58/64) [1966] ECR 299 – Facts
Consten and Grundig challenged a Commission decision finding that their dealership agreement infringed Article 101(1).
Établissements Consten SA and Grundig-Verkaufs-GmbH v Commission (Cases 56 & 58/64) [1966] ECR 299 – Principle
If restrictive clauses can be severed, only those clauses will be void.
Établissements Consten SA and Grundig-Verkaufs-GmbH v Commission (Cases 56 & 58/64) [1966] ECR 299 – Facts
(See earlier)
Établissements Consten SA and Grundig-Verkaufs-GmbH v Commission (Cases 56 & 58/64) [1966] ECR 299 – Principle
Both vertical and horizontal agreements can fall within Article 101(1).
Établissements Consten SA and Grundig-Verkaufs-GmbH v Commission (Cases 56 & 58/64) [1966] ECR 299 – Facts
(See earlier)
Établissements Consten SA and Grundig-Verkaufs-GmbH v Commission (Cases 56 & 58/64) [1966] ECR 299 – Principle
An ‘effect on trade’ includes both positive and negative effects.
IAZ International Belgium NV v Commission (Cases 96–102, 104, 105, 108 & 110/82) [1983] ECR 3369 – Facts
A recommendation to its members by a Belgian water suppliers’ trade association discriminated against imported machines.
IAZ International Belgium NV v Commission (Cases 96–102, 104, 105, 108 & 110/82) [1983] ECR 3369 – Principle
A non-binding recommendation falls within Article 101(1) if intended to be anti-competitive and normally complied with.
ICI challenged a Commission decision finding that certain aniline dye producers, including ICI, had fixed prices through concerted practices.
‘Concerted practice’: ‘a form of coordination between undertakings which, without having reached the stage where an agreement properly so-called has been concluded, knowingly substitutes practical cooperation between them for the risks of competition’. Parallel behaviour does not in itself constitute concerted practice, but may be strong evidence of it, especially if the conduct ‘leads to conditions of competition which do not correspond to the normal conditions of the market’.
Selective distribution system.
A rule of reason approach? Qualitative restrictions in a selective distribution agreement would not breach Article 101(1) provided they are applied uniformly across the selective distribution network.
Challenge to a Commission decision concerning a pay-TV agreement.
Court of First Instance (now the General Court): judgments such as Pronuptia do not establish a rule of reason in EU competition law.
Pronuptia de Paris GmbH v Pronuptia de Paris Irmgard Schillgalis (Case 161/84) [1986] ECR 353 – Facts
Distribution franchise agreement.
Pronuptia de Paris GmbH v Pronuptia de Paris Irmgard Schillgalis (Case 161/84) [1986] ECR 353 – Principle
A rule of reason approach? The restrictions did not breach Article 101(1) because they were indispensable to protect the reputation and know-how of the franchisor and the uniform identity of the franchise outlets.
Prym agree to stop making needles and instead to buy them from Beka, which agreed to supply Prym, allowing Beka to specialise in needle production.
Exemption granted: concentration of manufacture improved production.
Agreement for the supply of heavy earth-moving equipment.
Effect on trade between Member States: wherever it is ‘possible to foresee with a sufficient degree of probability on the basis of a set of objective factors of law or of fact that the agreement in question may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States’.
(See earlier)
It is not necessary to establish both the object and effect of an agreement. Either an anti-competitive object or effect will suffice.
Joint venture research and development agreement between two UK companies to design and manufacture switchgear in the UK.
Agreements between undertakings operating solely in one Member State may have an effect on trade between Member States. A potential effect is sufficient.
A Dutch Bar Association regulation prohibited multi-disciplinary partnerships.
‘Decisions by associations of undertakings’ can include decisions of professional associations.
Article 102 TFEU
AKZO reduced its prices below cost to target a market entrant.
Pricing below cost is predatory and an abuse if intended to eliminate competition.
BL had the exclusive right to issue type-approval certificates for imported left-hand drive BL cars.
The prices charged were disproportionate to the service provided and therefore excessive.
Hilti exerted pressure on its Dutch distributors not to supply Hilti’s cartridge strips in the UK.
Import/export restrictions: an abuse.
Challenge to a Commission decision finding an infringement.
Decision annulled: the Commission had not considered supply-side substitutability.
Hilti had abused a dominant position in relation to the supply of nail guns and nails.
A share of between 70 and 80 per cent in the relevant market was ‘in itself a clear indication of a dominant position’.
Hilti withheld discounts from customers who bought from competitors; required purchasers of nail cartridges to buy nails; and refused to honour guarantees if non-Hilti nails were used.
Roche induced its customers, through fidelity discounts, to buy their vitamins from Roche.
A very large market share creates a position of strength which may in itself amount to a dominant position.
Roche offered fidelity discounts. Its ‘English clause’ allowed customers who discovered cheaper prices elsewhere to ask for a price reduction.
Customers’ commercial freedom was limited. The ‘English clauses’ gave Roche access to information about rivals’ prices, allowing it to react quickly to reduce prices and undermine competition.
Hugin had refused to supply spare parts for its cash registers.
Demand substitutability assessed on the basis of product use.
Istituto Chemioterapico Italiano SpA and Commercial Solvents Corporation v Commission (Cases 6 & 7/73) [1974] ECR 223 – Facts
Commercial Solvents refused to supply an Italian drugs manufacturer with a raw material.
Istituto Chemioterapico Italiano SpA and Commercial Solvents Corporation v Commission (Cases 6 & 7/73) [1974] ECR 223 – Principle
Refusal to supply: an abuse.
Istituto Chemioterapico Italiano SpA and Commercial Solvents Corporation v Commission (Cases 6 & 7/73) [1974] ECR 223 – Facts
CSC had refused to supply a raw material used for producing an anti-tuberculosis drug.
Istituto Chemioterapico Italiano SpA and Commercial Solvents Corporation v Commission (Cases 6 & 7/73) [1974] ECR 223 – Principle
RPM can be an intermediate market.
Michelin challenged the Commission’s finding of an abuse in the market for replacement tyres for heavy vehicles.
One Member State was the geographic market and a substantial part of the internal market.
The Commission found that Sealink had abused a dominant position in its operation of the port of Holyhead.
The geographic market, the seaport of Holyhead, constituted a substantial part of the internal market.
Application of Article [101] to import restrictions.
Effect on trade between Member States: a ‘direct or indirect, actual or potential’ effect is sufficient.
Identification of the RPM: bananas or fresh fruit?
Demand substitutability assessed on the basis of product characteristics.
United Brands had a market share between 40 and 45 per cent.
Market structure may indicate dominance.
United Brands had used its wealth for advertising and for research and development.
Financial and technological resources indicate dominance.
United Brands had upstream and downstream control of the market.
Vertical integration indicates dominance.
United Brands was accused of charging excessive prices.
Excessive price: one which ‘has no reasonable relation to the economic value of the product supplied’.
United Brands charged different prices according to the customer’s state of establishment.
Pricing was based purely on what the market would bear, and therefore an abuse.
United Brands refused to supply Olesen because it had taken part in an advertising campaign for a competitor of United Brands.
Challenge to the Commission’s finding of a breach of Article [102].
Dominance: ‘A position of economic strength enjoyed by an undertaking that enables it to prevent effective competition … on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, customers … and consumers.’