Competition Law Compliance Training
We provide you with this article based on a webinar by Dr Andrés Martin-Ehlers, a partner attorney of Oppenhoff in Frankfurt, Germany. This article is an abstract of the webinar recorded in May 2021. Also, the information and materials are as of the date when the webinar was recorded.
TFEU 102
Article 102 of the TFEU is for the prohibition of abuse of a dominant position. The provision states;
Any 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.
What is Dominance?
Dr Martin-Ehlers said that it “may be very difficult to master in practical day-to-day life.” Then, he explained the intention of the provision with some examples. Then, he concluded that dominance “is a concept that is based on an underlying specific product and geographic market.” Therefore, he continued, we must analyse the markets by precedents. Market shares are critical indicators of dominance. Generally speaking, a huge market share might show the existence of dominance, although the threshold is different among countries. He also explained that the presence of dominance would be determined by how a market is formed: individually or jointly.
The Intention of the Provision of TFEU 102
The provision of TFEU 102 will protect competitors and customers/consumers. This provision horizontally protects competitors, and customers/consumers are vertically protected. Also, there is protection with the combination of the two protections. Loyalty rebates and retroactive rebates are examples of the protections.
Abuse of Dominant Position
The TFEU 102 does not describe the definition of the abuse of the dominant position. However, it lists several examples. One example he provided to us is about the “Michelin II” case, quoting the judgement of the Court of First Instance (Third Chamber), 30 September 2009.
Merger Control Regulation in Europe – Gun Jumping –
History of Merger Control in Europe
No Regulations
There were no merger control regulations about 40 years after the European Union was founded in 1957. In the case of Continental Can and Europemballage vs Commission of the European Communities, the European Court of Justice said there is no merger control system in Europe. Therefore, they might develop any jurisdiction on the merger control if there are no regulations.
Council Regulation 4064/89
These European Court of Justice decisions cause the member states to issue a regulation of merger control: Council Regulation 4064/89. However, that regulation had a very high threshold. A merger’s notification duty was to notify the European Commission only if a market share exceeds the threshold and notify local authorities if a market share is below the threshold.
Council Regulation 139/2004
Then, a new regulation was issued in 2004: Council Regulation 139/2004. This regulation states that it should be notified to the European Commission if a concentration has a community dimension. If notification to the European Commission is failed, the European Commission “may by decision impose fines” as described in Article 14 (2) 2 of the Council Regulation 139/2004.
Gun-Jumping
Dr Martin-Ehlers pointed out that on gun-jumping, “There is a deviation between balance sheet rules on the one hand and competition rules on the other.” There are different aspects to calculating turnover thresholds in accounting rules and competition laws. Presenting some examples, he explained the European Commission’s decision to impose fines on companies for gun-jumping even if the companies decided there was no issue with accounting rules.