Competition

Competition

1. Anti-Competitive Agreements [A101] [s. 2 CA]

   • (1) Does the prohibition apply
     • (i) Agreement, decision by associations or concerted practice between undertakings
     • (ii) May affect trade between MS
     • (iii) Has as its object the prevention, restriction or distortion of competition within internal market [A101(1)(a-e)] - or if UK [2(3)]
   • (2) Is the practice de minimis [NAOMI]
     • (i) If no appreciable affect on competiton, not a breach
     • (ii) Do the parties exceed the market share thresholds [Para 7]
       • Horizontal: aggregate does not exceed 10%
       • Vertical: neither parties share exceeds 15%
     • (iii) Doesn't apply if hardcore restrictions violated [Para 11]
       • Price fixing
       • Limiting or controlling production
       • Sharing markets or supply sources
   • (3) Does a block exemption apply [s. 101(3)] [s. 9] [s. 10] - horizontal agreement for the purposes of
     • (i) R&D
     • (ii) Technology transfer (licensing patents/knowhow)
     • (iii) Specialisation
   • (4) Self-assessment [A101(3)] [s. 9]- does the agreement:
     • (i) Have a positive overall effect (improve production, distribution, technical progress, etc.)
     • (ii) Give consumers a fair share of the benefit
     • (iii) Go no further than necessary
     • (iv) Is not a tool to effectively eliminate competition
     • Do not advise to self-assess, as risky and company/directors may be liable
   • (5) Consequences of infringement
     • Fines up to 10% of turnover
       • Further 1% fine for non-compliance
     • Restriction on activities during investigation
     • Agreement void and unenforceable [A101(2)] [s. 2(4)]
     • Directions to act/cease acting in a particular way
     • Adverse publicity

2. Abuse of dominant position [A102] [s. 18]

   • (1) What is relevant market
     • RPM
       • Would consumers buy an alternative product instead
       • Could another supplier quickly switch production to make the product
     • RGM
       • How far afield would consumers look to purchase the product (consider value, import costs, transport, etc.)
       • How soon could suppliers of the product based in one area begin selling in that area
   • (2) Does the undertaking have a dominant position in that market/in UK [s. 18(3)]
     • (i) Does it have the power to behave independently of competitors, suppliers and consumers
     • (ii) Market share
       • Over 75% = dominance
       • Under 30% = non-dominance
       • Lower the share, the more compelling the evidence of infringement must be
     • (iii) Are there barriers to competitors entering the market
       • Regulatory hurdles, high investment costs, etc.
     • (iv) Is the market fragmented (if it is distributed evenly among a small number of competitors, then a larger one is more likely to be dominant
     • (v) Key IP rights/knowhow
     • (vi) Access to superior technology
     • (vii) Superior distribution systems
   • (3) Is there abuse that may affect trade between MS/in UK [s. 18(2)(a-d)]
     • Exploiting consumers (high prices, lack of alternatives, limiting production, etc.)
     • Exploiting competitors (e.g. setting prices artificially low)
   • (4) Infringement consequences
     • Same as A101
     • Limited immunity if turnover under £50m [s. 40]