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Competition Law - Coggle Diagram

- - - - Any entitity
        
        Legal status doesn't matter employees aren't seen as separate undertakings! (C22/98 Becu)
        “unitary organisation of personnel, tangible and intangible elements'
        economic reality prevails
        degree of (in)dependence, financial risk
        
        Multiple companies can have such ties that they form a single economic entity e = single undertaking for the purpose of competition law
        Agreements between the same undertaking are not caught
        
        Subsidiaries: Viho
        A group of companies must be treated as a single economic entity when the parent company exercises a decisive influence over the subsidiaries = 100% shares
        Decisive influence can also be established based on how the subsidiaries are governed
        -> here, art.101 not applicable
        
        Parental Liability? YES: if the parent is presumed to exercise a decisive influence over its subsidiary
        e.g. holdings own shares in multiple companies, and can be held liable for daughter-behaviour
        Fine for anticompetitive behaviour = max 10% of turnover company
        calculated based on turnover of holding holding!
        
        What if the parent sells the subsidiary? Or acquires a subsidiary? Avoid that a company reorganisation leads to loss of liability for competition law infringements
        → Company in charge at the moment of the infringement
        Hoechst
      - Economic activity
        
        Broad notion + not necessary to have profit
        case law not consistent
        
        Even including activities with a social objective and activities connected to the exercise of public authority
        
        Diego Cali
        Distinction must be made between situation where:
        
        State acts in exercise of official authority
        
        State carries out economic activity of industrial/commercial nature offering goods and services on the market
        The fact that state delegates its public authority to a private company which received special/exclusive rights makes no difference
        --> was within power of public authority for envi prot, comp law doesnt apply
        
        The question whether a market exists for certain goods and services may depend on the way those services are organised in the [MS] and may thus vary from one MS to another.
    - - Applies to ALL sectors
      - Exceptions:
        social security and other exclusions by ECJ
        agriculture, transport
        “arms, munitions and war material” (346 TFEU)
        block exemptions
    - - EU comp law applies where EU law applies
      - EU vs national law
        
        “affect trade between Member States” (neutral)
        
        broad interpretation
        
        but one limit: “to an appreciable extent”
        
        2004 EC Guidelines: no appreciable effect on trade if:
        
        5% aggregate market share on any of markets concerned and;
        
        aggregate EU turnover in product covered ≤ 40 mio;
        
        or its a SME: no appreciable effect on trade
    - - Market share
        
        When an undertaking has market share of 50% or more = presumption of dominance, and where less than 30% = presumption of non-dominance (relevant for Art. 102 TFEU)
        
        When there is a vertical agreement between undertakings and none of them have a market share of 15% or more = presumption that it does not “appreciably restrict competition” (and hence no problem with Art. 101 TFEU)
        
        But what is the relevant market? (EC notice)
        
        Product Market
        The range of products or services that are considered substitutable by consumers because of their characteristics, price, or intended use
        
        SSNIP test : Small but Significant Non-transitory Increase in Price Would the company’s consumers switch to a substitute product or to a supplier located elsewhere in case the company would go for a hypothetical small (5 to 10%) but permanent relative price increase?
        If they switch = products belong to the same product market
        
        Relevant product market = all products between which substitution takes place
        indicator test only!
        
        What about products /services offered free of charge?
        Non-price competition: firms still compete on quality, privacy, convenience, features, innovation,…
        SSNDQ test: Small but Significant Non-transitory Decrease in Quality: Will customers switch if the quality decreases by 5 or 10%; if the level of data privacy decreases?
        
        what if there is a dominant undertaking that has already imposed a monopolistic (high) price? (= the cellophane fallacy)
        Customers will switch to products that are not truly substitutes (due to the very high price, which is further increased with 5-10% under the SSNIP test
        Leads to a much broader market than in reality
        
        Geographic Market
        The physical area in which firms compete and where consumers can reasonably seek substitutes for a product
        
        clearly defined geographic area in which the product is marketed and where the conditions are sufficiently homogeneous for the effect of the economic power of the undertaking concerned to be able to be evaluated
        
        Also used SSNIP test +
        consumer preferences, transportation means, taxation levels