European Business Law

Lesson 2

February 27th, 2013

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Week 2: Lecture 1 The EU undertaking (case law). Lecture 2 Agreements between undertakings (art. 101

Treaty on EU). Lecture 3 Abuse of dominant position (art. 102 Treaty on

EU)

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s1. The following shall be prohibited as incompatible with the internal

market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development, or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

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3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

- any agreement or category of agreements between undertakings,

- any decision or category of decisions by associations of undertakings,

- any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;

(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

Ab

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nAny abuse by one or more undertakings of a dominant

position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States." Such abuse may, in particular, consist in:

(a)directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b)limiting production, markets or technical development to the prejudice of consumers;

(c)applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(d)making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

EU

case

law

1. Höfner + Elser vs. Macrotron

2. Poucet + Pistre vs. Caisse mutuelle regional etc.

3. Sat Fluggesellschaft vs. Eurocontrol

4. Caisse nationale d’assurance viellece mutuelle

5. Job Centre Coop

6. Cisal vs. Inail

7. AOK vs. Ichtyol

8. Arduino (Wouters)

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21. “It must be observed, in the context of competition law, first that the concept of an

undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed and, secondly, that employment procurement is an economic

activity”.

Puoce

t et Pistre

In the field of social security, the Court has held that certain bodies entrusted with the management of statutory health insurance and old-age insurance schemes pursue an

exclusively social objective and do not engage in economic activity. The Court has found that to be so in the case of sickness

funds which merely apply the law and cannot influence the amount of the

contributions, the use of assets and the fixing of the level of benefits. Their activity, based on the principle of national solidarity,

is entirely non-profit-making and the benefits paid are statutory benefits bearing no

relation to the amount of the contributions (Joined Cases C-159/91 and C-160/91 Poucet and Pistre [1993] ECR I-637, paragraphs 15

and 18).

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Articles ... Are to be interpreted as meaning that an international organization as

Euocontrol does not constitute an undertaking within the meaning of those

articles

Federa

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-A

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A non-profit-making organization which manages an old-age insurance scheme

intended to supplement a basis compulsory scheme, established by law as optional scheme and operating according to the

principle of capitalization in keeping with rules laid down by the authorities in

particular with regard to conditions for membership, contribution and benefits, is an undertaking within meaning … of the Treaty.

Job

Centre

Public placement offices are subject to the prohibition contained in Article 86 ofthe EC Treaty, so long as application of that provision does not obstruct the performance of the particular task assigned to them. A Member State which prohibits any activity as an intermediary between supply and demand on the employment market, whether as an employment agency or as an employment business, unless carried on by those offices, is in breach of Article 90(1) of the Treaty where it creates a situation in which those offices cannot avoid infringing Article 86 of the Treaty. That is the case, in particular, in the following circumstances:

—    the public placement offices are manifestly unable to satisfy demand on the market for all types of activity; and

—    the actual placement of employees by private companies is rendered impossible by the maintenance in force of statutory provisions under which such activities are prohibited and non-observance of that prohibition gives rise to penal and administrative sanctions; and

—    the placement activities in question could extend to the nationals or to the territory of other Member States.

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dGroups of sickness funds, such as the AOK

Bundesverband, the Bundesverband der Betriebskrankenkassen (BKK), the Bundesverband der Innungskrankenkassen, the Bundesverband der landwirtschaftlichen Krankenkassen, the Verband der Angestelltenkrankenkassen eV, the Verband der Arbeiter-Ersatzkassen, the Bundesknappschaft and the See-Krankenkasse, do not constitute undertakings or associations of undertakings within the meaning of Article 81 EC when they determine fixed maximum amounts corresponding to the upper limit of the price of medicinal products whose cost is borne by sickness funds.

Inail

The concept of an undertaking, within the meaning of Articles 85 and 86 of the EC Treaty (now Articles 81 EC and 82 EC), does not cover a body which is entrusted by law with the management of a scheme providing compulsory insurance against accidents at work and occupational diseases, where the amount of benefits and the amount of contributions are subject to supervision by the State and the compulsory affiliation which characterises such an insurance scheme is essential for the financial balance of the scheme and for application of the principle of solidarity, which means that benefits paid to insured persons are not strictly proportionate to the contributions paid by them.

Such a body fulfils an exclusively social function. Accordingly its activity is not an economic activity for the purposes of competition law.

Ard

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Articles 5 and 85 of the EC Treaty (now Articles 10 EC and 81 EC) do not preclude a Member State from adopting a law or regulation which approves, on the basis of a draft produced by a professional body of members of the Bar, a tariff fixing minimum and maximum fees for members of the profession, where that State measure forms part of a procedure such as that laid down in Royal Decree-Law No 1578 of 27 November 1933, as amended.