Environmental Considerations in European Competition Law September 21, 2018

Road Map The European Legal Framework The Competition Law Framework in the European Union (EU) Environmental Considerations in EU Competition Law September 21, 2018

The European Legal Framework From Rome to Lisbon EC: Treaty of Rome (1958) EU: Maastricht Treaty (1993) Lisbon Treaty (2009) September 21, 2018

The European Legal Framework Lisbon Treaty Treaty on EU Treaty on the Functioning of the EU (TFEU) September 21, 2018

The European Legal Framework Treaty on the Functioning of the European Union Principles Environmental Integration Obligation Union Policies Competition Law September 21, 2018

The European Legal Framework Environmental Integration Obligation Article 11 TFEU Environmental protection requirements must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development. September 21, 2018

The Competition Law Framework in the EU Article 101 TFEU Article 102 TFEU Exceptions eg Article 106(2) TFEU Merger Regulation 101(1) prohibiton of cartels 101(2) cartels agreements void 101(3) exception for agreements that bring about “improvemen of production or distribution of goods or to promoting technical or economic progress” “Comsumer fair share” “Not indispensable” “No elimination of competition” 102 Just prohibits abuse by dominant undertakings 106(2) Exception of undertakings providing services of general interest but only exception in so far as this is necessary Merger regulation Two step analysis after notification, quick look or then more intense look Test long the lines of article 101(3) September 21, 2018

The European Legal Framework Environmental Integration Obligation Article 11 TFEU Environmental protection requirements must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development. September 21, 2018

Scope of Competition Law EU competition law applies to undertakings Function and not form is decisive Undertaking means any entity carrying on commercial activities relating to goods or services “untertaking” means any entity carrying out commercial activities relating to goods or services This is the most important definition as it sets out the realm This definition means that state bodies engaged in economic activityas well as hospitals, but also liberal professions etc. all that can be provided in competition... September 21, 2018

Scope of Competition Law The Definition of Undertaking and the Environment Nearly all fall under the functional except Activities based on the principle of solidarity Exercise of public power Purchases for non-economic activities “untertaking” means any entity carrying out commercial activities What are non-commercial activities? activities principle of solidarity, exercise of public power purchases for non-economic activities What about environmental protection? Diego Cali September 21, 2018

Object or effect of hindering competition Article 101(1) Object or effect of hindering competition Environmental Considerations in effect cases? Horizontal Cases No effect, precise environmental aim but implementation left open The creation of a new market 2. Vertical Cases Selectivity cases European Rule of Reason and the Environment Prohibition of agreements that have the object of effect of distorting competition Horizontal Cases No effect, precise environmental aim but implementation left open (“ACEA, CEMEP” and “JAMA and KAMA”) The creation of a new market (DSD and ZVEI/Arge Bat) Vertical Cases Selectivity cases (objective qualitative criteria-- Metro I) September 21, 2018

Environmental considerations in the four conditions of Art 101(3)? Article 101(3) Environmental considerations in the four conditions of Art 101(3)? Improvement of production/distribution or technical/economic progress Fair share to the consumer Restriction does not go beyond what is necessary No elimination of competition Improvement of production/distribution or economic progress Ford/Volkswagen Exxon/Shell Philips/Osram…………….environmental improvement as an improvement of production Fair share to the consumer Philips/Osram CECED What benefit for the consumers? Product cleaner higher environmental quality. What about CECED? Only benefit to society? Restriction does not go beyond what is necessary No elimination of competition September 21, 2018

Article 102 TFEU Abuse of a Dominant Position Without justification Abuse of a dominant position/Monopolization 1. Dominant position 2. Abuse 3. Without justification September 21, 2018

Justification Abuse in the name of the environment? analysis of the facts of the case, the economic environment  is there a good reason for this behaviour? Justification The question of justification requires analysis of the facts of the case, the economic environment is there a good reason for this behaviour Environmental protection as justification? Public policy cases: Hilti and Tetra-Pak - Unsuccessful  General not possible? No, due to the facts! Should we have a environmental reasons as objective justification? (p) alignment with Article 101 -objective justification as European Rule of Reasoon - Efficiency justification along the lines of Article 101(3) September 21, 2018

General Exceptions to the Competition System Agreement required by legislation Enterprises entrusted with services of general economic interest (but only to the extent necessary) General exception to the Competition System Agreement required by legislation - Environmental Law obliges to act in a certain way: Ladbroke Enterprises entrusted with services of general economic interest but only to the extent necessary September 21, 2018

Article 106(2) Undertakings entrusted with services of general economic interest (but only to the extent necessary) Service of General Economic Interest Entrusted Proportionality of Restriction What is a service of general economic interest? Better economic service of general interest.... e.g. utilities, telecommunication, post.... Environmental protection Case Sydhavnens Sten & Grus (management of particular waste) services were equal access is needed for all and affordable terms... usually some form of cross-subsidisation (area which are commercially viable to area which are not)..... However to important restrictions: - Entrusted by the state - Necessity requirement September 21, 2018

Summary Where can environmental protection come into play? Scope: Definition of undertaking Article 101 (1) effect cases Article 101 (1) European Rule of Reason Article 101 (3) “efficiency defence” Article 102 objective justification Article 102 “efficiency defence” State compulsion Article 106 (2) TFEU September 21, 2018

Environmental Protection in Competition Law in Colombia? Self standing policy goal? Development as aim: but what kind? Paternalism September 21, 2018

Thank You! Questions, Comments? September 21, 2018