Competition law Class 8-9 NAGY, Csongor István ncsi@eik.bme.hu

Fields of competition law Unfair competition law: acts contrary to business ethics Antitrust: Cartels/agreements in restraint of trade Abuse of dominant position Merger control Competition rules applicable to states: State aid Market liberalization

Sanction of antitrust violations competition fine; actions for damages; exclusion from public tenders; criminal punishment or occupation ban (not in all countries)

Some general concepts Competition law is about economic entities and not legal persons. Competition law may have extra-territorial effect. Competition law covers all market behavior.

Agreements On the basis of competition risks Hardcore agreements Agreements subjected to effects-analysis (‘it depends’) Horizontal and vertical agreements

Horizontal hardcore cartels Price-fixing between competitors Market-sharing, customer-sharing agreements Reduction of output Holding back technological development Exchange of pricing information

Leniency policy Complete immunity: Reduction of the fine: information that enables the institution of the proceedings, or Information the enables the establishing of the violation Reduction of the fine: evidence of added-value admission of guilt

Informant award Entered into force on April 1, 2010. Informant award is granted to the natural person who gives to the HCO indispensible written evidence or helps the HCO to find it in the frame of a dawn raid. The amount of the informant award is 1 % of the fine, but it cannot be more than 50 million HUF. Limits of the right for award: The statutory representative of an undertaking having submitted a leniency application is not entitled to the award.. No award is paid for evidence acquired through a crime or an offence. The statute protects the informant: everyone can request information at the HCO without revealing his/her identity, the informant can request that his/her personal data be treated confidently.

Vertical hardcore agreements Resale price fixing (minimum and concrete prices, BUT maximum and recommended resale prices are not automatically prohibited) Absolute territorial protection (ban on passive sales); BUT relative territorial protection (ban on active sales) is not automatically prohibited.

Effect type agreements Horizontal Agreements Joint selling/purchasing Research & Development Specialization Vertical agreements Non-compete clauses

Abuse of dominant position Tying/bundling Predatory pricing Price/Margin squeeze Refusal to deal/essential facilities Loyalty rebates

Merger Over a certain turnover all transactions are to be notified to the competition authority. EU dimension: Commission; otherwise: national competence. No dominant position may be created by way of merger. Internal growth is certainly not prohibited. Conditions/commitments: divestiture, behavioral commitments.