Competition Law

Articles

European Commission Entry barriers

Barriers to entry are factors which prevent or hinder companies from entering a specific market. Entry barriers may result for instance from a particular market structure (e.g. sunk cost industry, brand loyalty of consumers to existing products) or the behaviour of incumbent firms. It is (...)

European Commission Periodic penalty payment

The Commission may by decision impose periodic penalty payments in order to compel an undertaking to stop an infringement of competition rules in accordance with an earlier decision. In such a case, a daily amount is fixed which has to be paid for every day the infringement continues after the (...)

European Commission ESA

ESA stands for EFTA Surveillance Authority. The Authority was established under an agreement between the EFTA states, which contains basic provisions on the Authority’s organisation and lays down its tasks and competencies. The task of the ESA is to ensure, together with the European Commission, (...)

European Commission Fine

A monetary penalty imposed by a Commission decision on an see definition forundertaking for a violation of EC see definition forcompetition rules.See in particular: Article 15 of Regulation No 17 and Article 14 Merger Regulation © European (...)

European Commission Vertical agreement

Agreement or concerted Practice entered into between two or more undertakings each of which operates, for the purposes of the agreement, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain (...)

European Commission Horizontal agreement

Arrangement between actual or see definition forpotential competitors, i.e. undertakings operating at the same level of the production or distribution chain, covering for example research and development, production, purchasing or commercialisation. Horizontal agreements may restrict (...)

European Commission Access to the Commission’s file

Right of natural or legal persons who are parties to a Commission investigation to see the Commission’s file, whenever the Commission proposes to adopt a decision which would be unfavourable to those parties. Access is given in the course of the administrative procedure to all the documents of (...)

European Commission Abuse of a dominant position

Anti-competitive business practices (including improper exploitation of customers or exclusion of competitors) in which a dominant firm may engage in order to maintain or increase its position on the market. Competition Law prohibits such behaviour, as it damages true competition between firms, (...)

European Commission Divestiture

Decision by a firm to sell part of its current operations, divisions or subsidiaries as a result of business restructuring in order to concentrate on certain products or markets. Under EU competition law, divestiture may also be offered by firms as a commitment to the Commission in order to (...)

European Commission Passive sales

Sales in response to unsolicited requests from individual customers including delivery of goods or services to such customers. Sales generated by general advertising or promotion in media or on the Internet that reaches customers in other distributors’ exclusive territories or customer groups, (...)

European Commission Tying or tied selling

Commercial practice of conditioning the sale of one product on the purchase of another product. If tying is not objectively justified by the nature of the products or their commercial usage, such practice may restrict competition. Economic theory suggests that a firm which enjoys market power (...)

European Commission Active sales

Sales made by actively approaching individual customers inside another distributor’s exclusive territory or exclusive customer group by for instance direct mail or visits, or by actively approaching a specific customer group or customers in a specific territory allocated exclusively to another (...)

European Commission Effects doctrine

According to this doctrine, domestic competition laws are applicable to foreign firms - but also to domestic firms located outside the state’s territory, when their behaviour or transactions produce an "effect" within the domestic territory. The "nationality" of firms is irrelevant for the (...)

European Commission Collecting society

Association, which collects payments made by users of intellectual property rights for the holders of such rights. For instance, a radio station, playing a record for which a record company holds a copyright, has to pay a fee to a collecting society, which then transfers the payments to the (...)

European Commission Turnover threshold

The combined annual turnover of the parties is used in the field of merger control as a criterion to divide competence between Member States and the Commission. concentrations where the parties’ combined turnover exceeds the thresholds set in Article 1 of the Merger Regulation are considered to (...)

European Commission Services of general economic interest

Services of an economic nature, the provision of which can be considered to be in the general interest. For example: basic, publicly accessible supply of energy, telecommunication, postal services, transport, water and waste disposal services. The Member States are primarily responsible for (...)

European Commission Hard core restrictions

Refers to restrictions of competition by agreements or business practices, which are seen by most jurisdictions as being particularly serious and normally do not produce any beneficial effects. They therefore almost always infringe competition law. Under EU law, the most prominent examples on (...)

European Commission Ancillary restraints

Restrictions on the parties to an agreement (including an agreement to form a concentration), which do not constitute the primary object of the agreement, but are directly related to and necessary for the proper functioning of the objectives envisaged by agreement. In the field of co-operation (...)

European Commission International Competition Network (ICN)

A project-oriented, consensus-based, informal network of antitrust agencies from developed and developing countries. The ICN serves to share experiences and exchange views on competition issues deriving from an ever-increasing globalisation of the world economy, as well as to encourage the (...)

European Commission Absolute territorial protection

Practice by manufacturers or suppliers relating to the resale of their products and leading to a separation of markets or territories. Under absolute territorial protection, a single distributor obtains the rights from a manufacturer to market a product in a certain territory and other (...)

European Commission Merger control procedure

The merger control procedure under EU law is laid down in the Merger Regulation (which was amended once) and in the implementing regulation. The Merger Regulation confers to the Commission the sole authority to assess concentrations with a Community dimension. Concentrations which meet the (...)

European Commission Resale price maintenance (RPM)

Agreements or concerted Practices between a supplier and a dealer with the object of directly or indirectly establishing a fixed or minimum price or price level to be observed by the dealer when reselling a product/service to his customers. A provision which foresees resale price maintenance (...)

European Commission Predatory pricing

A (deliberate) strategy, usually by a dominant firm, of driving competitors out of the market by setting prices below production costs. If the predator succeeds in driving existing competitors out of the market and in deterring future entry of new firms, he can subsequently raise prices and (...)

European Commission Concerted Practice

Co-ordination between undertakings which, without having reached the stage of concluding a formal agreement, have knowingly substituted practical co-operation for the risks of competition. A concerted practice can be constituted by direct or indirect contact between firms whose intention or (...)

European Commission Market power

Strength of a firm on a particular market. In basic economic terms, market power is the ability of firms to price above marginal cost and for this to be profitable. In competition analysis, market power is determined with the help of a structural analysis of the market, notably the calculation (...)

European Commission Buyer power

Ability of one or more buyers, based on their economic importance on the market in question, to obtain favourable purchasing terms from their suppliers. Buyer power is an important aspect in competition analysis, since powerful buyers may discipline the pricing policy of powerful sellers, thus (...)

European Commission Dominant position

A firm is in a dominant position if it has the ability to behave independently of its competitors, customers, suppliers and, ultimately, the final consumer. A dominant firm holding such market power would have the ability to set prices above the competitive level to sell products of an inferior (...)

European Commission Complaint

Request by a natural or legal person who claims a legitimate interest asking the Commission to investigate an alleged infringement of EU competition law and to bring it to an end. Formal complaints oblige the Commission to act (either to find that there is an infringement or to reject the (...)

European Commission Concentration

A concentration arises either where two or more previously independent undertakings merge (merger), where an undertaking acquires control of another undertaking (acquisition of control), or where a joint venture is created, performing on a lasting basis all the functions of an autonomous (...)

European Commission Oligopoly

A market structure with few sellers, who realise their interdependence in taking strategic decisions, for instance, on price, output and quality. In an oligopoly, each firm is aware that its market behaviour will distinctly affect the other sellers and their market behaviour. As a result, each (...)

European Commission Nullity

Under Article 101(1) TFEU agreements between undertakings which restrict competition and may affect trade between Member States are prohibited. According to Article 101(2) TFEU they are void unless they are exempted from the prohibition under certain conditions laid down in Article 101(3) TFEU. (...)

European Commission Notification

Formal information which firms provide to the Commission under EU merger law in certain situations. The Merger Regulation obliges undertakings to notify any concentration of Community dimension to the Commission on the basis of form CO, normally within one week of the conclusion of the (...)

European Commission Single branding

This term covers both non-compete obligations and quantity forcing. A non-compete obligation is an obligation or incentive scheme in a supply or distribution agreement which causes the buyer not to manufacture, purchase, sell or resell products which compete with the contract products or to (...)

European Commission Interim measures

Conservatory measures imposed on firms by the Commission in relation to a competition case, in which a final decision on the substance has not been reached yet, in order to avoid that anti-competitive behaviour leads to irreversible damage before being sanctioned. Interim measures may be taken (...)

European Commission Relevant market

The definition of a relevant market is a tool to identify and define the boundaries of competition between firms. It allows to establish the framework within which competition policy principles are applied by the Commission. The main purpose of market definition is to identify in a systematic (...)

European Commission Bid rigging

Particular form of co-ordination between firms which can adversely affect the outcome of any sale or purchasing process in which bids are submitted. For example, firms may agree their bids in advance, deciding which firm will be the lowest bidder. Alternatively, they may agree not to bid or to (...)

European Commission Trustee

A legal or natural person appointed in merger cases to oversee the implementation of commitments and to contribute to their implementation where required. The trustee is appointed by the parties who have offered commitments the Commission with the Commission’s approval. His powers and duties are (...)

European Commission Franchising

A special type of agreement whereby one undertaking (the franchisor) grants to the other (the franchisee), in exchange for direct or indirect financial consideration, the right to exploit a package of industrial or intellectual property rights (franchise) for the purposes of producing and/or (...)

European Commission Obligations

Requirements the Commission imposes on undertakings in order be able to declare a notified concentration compatible with the common market conditions). The breach of such obligations may result in the revocation of the Commission’s decision. © European (...)

European Commission Non-competition clause

Contractual clause bringing about a direct or indirect obligation causing the parties to an acquisition agreement, or at least one of them, not to manufacture, purchase, sell or resell independently goods or services which compete with the contract goods or services. Such an obligation on the (...)

European Commission Leniency (programme)

General term for the total or partial reduction of fines applied to firms that co-operate with antitrust authorities in cartel investigations. The current leniency programme of the Commission is the 2006 Notice on immunity from fines and reduction of fines in cartel cases, as amended in 2015 . (...)

European Commission Collusion

Collusion refers to the co-ordination of firms’ competitive behaviour. The likely result of such co-ordination is that prices rise, output is restricted and the profits of the colluding companies are higher than they would otherwise be. Collusive behaviour does not always rely on the existence (...)

European Commission Parallel trade (parallel imports)

Trade in products which takes place outside the official distribution system set up by a particular firm. Through their own distribution system, firms may cause differences in prices for different countries, exploiting national differences in the behaviour of consumers. Parallel traders buy (...)

European Commission De minimis notice

Communication from the Commission clarifying under what conditions the impact of an agreement or practice on competition within the common market can in its view be considered to be non-appreciable, namely where the aggregate market share of the undertakings involved remains below certain (...)

European Commission Intra-brand competition

Competition among distributors or retailers of the same branded product, be it on price or non-price terms. For example, a pair of Levi’s jeans may be sold at a lower price in a discount store as compared to a department store but often without the amenities in services that the latter provides. (...)

European Commission Joint control

Joint control exists where two or more undertakings or persons have the possibility of exercising decisive influence over another undertaking. Decisive influence in this sense normally means the power to block actions which determine the strategic commercial behaviour of an undertaking. Joint (...)

European Commission International Co-operation

Co-operation in the area of competition policy and enforcement between competition agencies in two (bilateral) or more countries (trilateral, plurilateral) which mostly takes place in an informal way, but sometimes on the basis of formal co-operation agreements. It aims at exchanging (...)

European Commission Comity

Principle applied in the field of international Co-operation on competition policy. By negative comity, every country that is party to a co-operation agreement guarantees to take account of the important interests of the other parties of the agreement when applying its own competition law. By (...)

European Commission Retailer

Firm at the end of the distribution chain, which normally buys a product from a wholesaler in order to sell it to the final consumer. © European Commission