Paul Hughes Brussels 30 th March 2005 Article 81.

Slides:



Advertisements
Similar presentations
GREETINGS TO CHARTERED ACCOUNTANTS FOR ICAIS POST QUALIFICATION COURSE VIDEO CONFERENCE FROM HYDERABAD 26 AUGUST 2005.
Advertisements

1 SPORT AND COMPETITION LAW AT EU LEVEL beyond the White Paper on Sport Tilburg University, Spring semester 2010 MICHELE COLUCCI
EU Competition Policy Michele Colucci ISDE-JMLS Barcelona June 2-4, Web site:
1 SPORT AND COMPETITION LAW AT EU LEVEL Madrid, february 2007 MICHELE COLUCCI
IMPACT ESTIMATION PROJECT h o r i z o n s c a n n i n g Anti-trust issues in on-line retailing Ed Smith Director Office of Fair Trading The views expressed.
Vertical agreements and competition law Doc. dr. sc. Jasminka Pecotić Kaufman University of Zagreb-Faculty of Economics and Business, Department of Law.
Vinod K. Jain Associate Professor and Director, MBA Program University of Maryland University College American Chamber of Commerce in Poland Competing.
Competition Policy and Competition Law 23 April 2008 Adolph Leung Senior Economist Commerce and Economic Development Bureau.
Dr Assimakis Komninos Commissioner, Hellenic Competition Commission Visiting Research Fellow, University College London.
Le présent support ne peut être reproduit sans autorisation 1 Legal case « Pierre Fabre Laboratories»  Is it legal to require the permanent presence of.
TRANSFER OF TECHNOLOGY BLOCK EXEMPTION REGULATION NO. 240/96 AND ITS PROPOSAL TO REFORM 24 June 2003 Valeria Falce Gianni, Origoni, Grippo.
The State & EU Competition rules Professor Dr. juris Erling Hjelmeng Department of Private Law, UiO.
IMPACT ESTIMATION PROJECT h o r i z o n s c a n n i n g Observations on retail-MFNs and RPM Nelson Jung Director, Mergers Office of Fair Trading The views.
RESTRICITVE PRACTICES AND LENIENCY Zuzana Šimeková European Union – Opportunities and Challenges June 2009, Dubrovnik.
IP rights and competition law: Friends or foes? Etienne Wéry Attorney at the bars of Paris and Brussels Lecturer at Robert Schuman University (Strasbourg)
Horizontal agreements Julija Jerneva. Horizontal agreements.
LUMSA – International Commercial Law COMPETITION LAW – GENERAL PRINCIPLES Competition law is law that promotes or seeks to maintain market competition.
EU Competition Policy. Internal Market One of the activities of the Community: “an internal market characterised by the abolition, as between member States,
Administration in International Organizations PUBLIC COMPETITION LAW Class I, 6th Oct 2014 Krzysztof Rokita.
INTRODUCTION TO COMPETITION LAW
Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. CHAPTER 22 Regulating the Competitive Environment.
National symposium on Competition law: Evolution and Transition, 2012 Competition Policy for IP Issues Pradeep S Mehta Secretary General, CUTS International.
1 Is there a conflict between competition law and intellectual property rights? Edward Whitehorn Head, Competition Affairs Branch Carrie Tang Assistant.
Prohibited agreements: Article 101 (3) Julija Jerneva ( )
A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW Y ORK P ARIS S INGAPORE S TOCKHOLM T OKYO W ASHINGTON.
COLLABORATION IN LIFE SCIENCES FIELD: COMPETITION CONCERNS by Craig Simpson, Brussels EU Regulatory Practice 27 September 2006.
EUROPEAN COMPETITION POLICY
Introductory course on Competition and Regulation Pál Belényesi University of Verona October 2006.
1 INTRODUCTION OF THE LAWS ON ABUSE OF DOMINANT POSITION AND ABUSE OF MONOPONY POSITION IN VIETNAM Speaker: Mr. Trinh Anh Tuan Official Vietnam Competition.
Intellectual Property Rights and Technology Transfer – Need for right Approach © Yves Van Couter – 2014, November 21 ‘EU-India Strategic Partnership :
Administration in International Organizations PUBLIC COMPETITION LAW Class II, 13th Oct 2014 Krzysztof Rokita.
Practical Impact Of European Community Anti Trust Law On R&D Agreements Volker Linden, Rechtsanwalt, German-Australian-Pacific Lawyers Association International.
1 Regulating the Competitive Environment Chapter 22 © 2005 Thomson/West Legal Studies In Business.
Administration in International Organizations PUBLIC COMPETITION LAW Class III, 20th Oct 2014 Krzysztof Rokita.
International & Foreign Law Search, Liu 1 Separation of Powers? Commission—executive? Council—Legislative? Parliament—Legislative? Court--Judiciary.
COMPETITION ACT 2010 MINISTRY OF DOMESTIC TRADE CO-OPERATIVES & CONSUMERISM Seminar on Competition Law September 2010 PICC, Putrajaya SHILA DORAI.
INVESTIGATION AND ENFORCEMENT Presentation by Duncan T. Morotsi 15 th March
© DET JURIDISKE FAKULTET UNIVERSITETET I OSLO “object or effect the prevention, restriction or distortion of competition” The term “prevention, restriction.
Competition Compliance and Procurement by the NHS David Marks
Competition law II.. Restriction of Competition Agreements are not prohibited unless they prevent, restrict, or distort competition. The agreement must.
European competition policy. Role of competition policy Promote economic efficiency To control intensity of competition within economy Some areas it is.
EU Competition Law. Introduction Competition law protects competition in a free market economy, that is, an economic system in which the allocation of.
Legal Protection of Competition 2. EC and National Competition law (Who applies which law, and why?) Michal Petr Office for the Protection of Competition.
“object or effect the prevention, restriction or distortion of competition” The term “prevention, restriction and distortion” – Used interchangeably Economic.
EU Business Law: Anticompetitive agreements (Art. 101 TFEU) Dr. Agata Jurkowska-Gomułka.
© 2004 West Legal Studies in Business, a Division of Thomson Learning 20.1 Chapter 20 Antitrust Law.
How sporty is the joint sale of sports broadcasting rights? A critical reappraisal of the status of joint selling agreements under the EU antitrust rules.
Cert competition 2015/16 Week 2 Restrictive agreements.
LEB Slide Set 14 Competition Law Matti Rudanko. LEB Slide Set 14 2 A Constitution of Market Economy Well-functioning markets – an unwritten fundamental.
PHILIPPINE COMPETITION ACT
Competition Law Understand the legal rules relating to monopolies, mergers and anti-competitive practices.
competition rules in inland transport
Markkinoiden juridinen toimintaympäristö Kalvot 15
IDI Annual Congress June 2010
European Union Law Week 10.
EU Competition Rules for Technology Transfer Agreements
Competition Law and its Application: European Union
 The term “prevention, restriction and distortion” Used interchangeably
Lear - Laboratorio di economia, antitrust, regolamentazione
Intel: Back to the Future?
Environmental Considerations in European Competition Law
TYPOLOGY OF DISTRIBUTION AGREEMENTS
The Autonomy and Specificity of sport beyond The ISU case
EU COMPETITION LAW Satu Pitkänen.
SPORT AND COMPETITION LAW AT EU LEVEL beyond the White Paper on Sport
Competition Law: Private Undertakings
EU Competition Policy Article 101 TFEU.
SPORT AND COMPETITION LAW AT EU LEVEL beyond the White Paper on Sport
What is a «restriction of competition»?
AN INTRODUCTION TO EUROPEAN LAW
Presentation transcript:

Paul Hughes Brussels 30 th March 2005 Article 81

Presentation Overview Article 81(1) - its width Horizontal agreements Vertical agreements Article 81(2) – nullity sanction Article 81(3)- capable of exemption?

Article 81(1) - structure Agreements between, concerted practices and decisions by associations of Undertakings Which may affect trade between member states Having as their object or effect Prevention restriction or distortion of competition in EU

Article 81(1) Agreements: ACF Chemiefarma NV; BP Kemi; Sandoz; Ford Europe; Adalat Concerted practice: Dyestuffs; Suiker Unie; Polypropylene; Wood Pulp Decisions of associations: Vereeniging van Cementhandelaren; EPI Code of Conduct

Article 81(1) - Undertakings Public sector: Aeroports de Paris; Bodson; Hofner & Elser; Fenin Employees/self employed: Becu; Reuter/BASF; Albany; Share ownership: Viho; Hydrotherm/Andreoli Professions: Wouters; EPI Code of Conduct

Article 81(1) – Effect on Trade Consten & Grundig – concept defines boundary between national and EU law; Key issue is capacity to affect imports/exports; Dutch Electro-technical Fittings Equipment; BNIC v Clair; Fire Insurance Bagnasco; Dutch Banks Javico v Yves St Laurent Commission Guidelines 2004/C 101/07

Article 81(1) – Object or Effect Object: price fixing, allocation of markets or customers, output or sales limitations Effect: requires economic analysis Delimitis v Henninger Brau European Night Services Van den Bergh

Article 81(1) – Restriction of Competition Commission Notice on Agreements of Minor Importance - where parties are: –Competitors – aggregate market share cap of 10% –Not actual/potential competitors - individual market share cap 15% –Classification difficult – 10% cap applicable Parallel networks of restrictive agreements cumulatively affecting competition in relevant market – caps reduced to 5%

Article 81(2) - Nullity English blue pencil test – agreement may be invalid Passmore v Morland plc: market shares may rise Right of damages: Courage Limited v Crehan

Article 81(1) infringed? SLT v Maschinenbau Ulm; Metro; Pronuptia; Nungesser; Remia & Nutricia; Gottrup Klim Rule of Reason: Metropole v Commission Commission Guidelines on application of Article 81(3) 2004/C 101/08 Article 81(3) requirements: –Improve production/distribution or promote technical/economic progress –Confer fair share of benefits on consumers –Restrictions imposed indispensable to these objectives –Do not substantially eliminate competition Block exemptions: legal certainty Relationship of Articles 81(1) and 81(3)

Concerted Practice/ Information Exchanges Corporate JV Merger Collaborative Agreement Behavioural arrangements Structural arrangements ECMRArt 81(3) Horizontal Arrangements

Concerted Practice/ Information Exchanges Corporate JV Merger Collaborative Agreement NB: Between Competitors Hard core cartel criminal offence UK Behavioural arrangements Structural arrangements Art 81(3)ECMR Horizontal Arrangements

R & D Block Exemption Regulation (Reg 2659/00) NB: –Competing undertakings - 25% market share cap –Parties must have access to results for research/exploitation (research bodies/universities can be confined to research) –Parties must be free to conduct R&D in unconnected fields and to challenge other partys IP (however right to terminate R&D agreement) Specialisation Block Exemption Regulation (Reg. 2658/00) NB: –Competing undertakings –20% market share cap Article 81(3) and Commission Guidelines(2001/C 3/02): UEFA; Premier League; Veronica/Endemol; Television par Satellite; Ford/VW

Vertical Agreements IP Owner(s) (R&D <25% Share) Supply Agreement MANUFACTURER/SUPPLIER <30% Share Licence RESELLER

RPM Export bans NB Agency Price/Geog Supply Agreement EFFECT Licence RESELLER OBJECT IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER <30% Share Vertical Agreements

RPM Export bans NB Agency Price/Geog Supply Agreement EFFECT Licence RESELLER OBJECT Price/Geog RRP Exclusive territory IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER <30% Share Vertical Agreements

RPM Export bans NB Agency Price/Geog Supply Agreement EFFECT Licence RESELLER OBJECT Selective Franchising QualityPrice/Geog RRP Exclusive territory IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER <30% Share Vertical Agreements

RPM Export bans NB Agency Price/Geog Supply Agreement EFFECT Licence RESELLER OBJECT Selective Franchising QualitySegmentation Customers Product categories Price/Geog RRP Exclusive territory IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER <30% Share Vertical Agreements

RPM Export bans NB Agency Price/Geog Supply Agreement EFFECT Licence RESELLER OBJECT Selective Franchising QualitySegmentation Volumes/foreclosure Purchase obligations Non-compete Price/Geog RRP Exclusive territory Customers Product categories IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER <30% Share Vertical Agreements

IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER < 30%Share Licence RESELLER Supply Agreement Vertical Agreements

Export Bans RPM OBJECT IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER < 30%Share Licence RESELLER Supply Agreement Vertical Agreements

Export Bans RPM 30%40% Market Share EFFECTOBJECT 20% IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER < 30%Share Licence RESELLER Supply Agreement Vertical Agreements

Export Bans RPM 30%40% Market Share Territorial exclusivity Selective Networks Franchising EFFECTOBJECT 20% IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER < 30%Share Licence RESELLER Supply Agreement Vertical Agreements

Export Bans RPM 30%40%50%70%X Loyalty rebates Exclusive purchase (80%+) Bundling/Tying Pricing Discrimination Refusal to deal Market Share Territorial exclusivity Selective Networks Franchising EFFECTOBJECT 20% IP Owner(s) (R&D <25% Share) MANUFACTURER/SUPPLIER < 30%Share Licence RESELLER Supply Agreement Vertical Agreements

Vertical Agreement Block Exemption Regulation 279/99 (VABER) Covers agreements between 2 or more undertakings at different levels in distribution chain Supplier Retailer Wholesaler

Non-Competitors Parties must not be actual or potential competitors unless resellers total annual turnover < 100 million OR Supplier of Services Service Provider (not competing upstream with supplier) Direct Supply Supplier of Goods Direct Sales Distributor (where not a competing – manufacturer) Where agreement is non-reciprocal

Market Share Cap Supplier Reseller Non-exclusive Supplier Reseller Exclusive < 30%

Hardcore Restrictions – Price Supplier Reseller NB. Indirect RPM/fixed prices: price monitoring, discount fixing, margin fixing, delivery and suspensions, pre- printed prices. Maximum or recommended prices permissible Minimum/fixed prices impermissible

Hardcore Restrictions – Customers and Territory (1) Can allocate Exclusive territory Exclusive customer segment Reseller Supplier Reseller(s) Where exclusive territories are reserved to supplier or conferred on other resellers

Hardcore Restrictions – Customers and Territory (2) Supplier Reseller 1 Reseller 2 Exclusive Territory A Exclusive Territory B Can prevent active but not passive sales (NB. Internet)

Hardcore Restrictions – Selective Networks Supplier Selective Wholesaler I Selective Wholesaler 2 Selective Wholesaler 3 Selective Retailer 1 Selective Retailer 2 Selective Retailer 3 End Users Cannot ban end user sales; can require to operate from authorised premises Must allow cross sales within the selective network Can ban sales

Vulnerable Restrictions (1) – Spare Parts Supplier Reseller Competitors of supplier for incorporation Can Restrict Spare Parts End User/Repairer Cannot restrict Components

Vulnerable Restrictions (2) – Non Compete Obligations Supplier Reseller 5 years only 80%+ exclusive purchase obligation Except where lease conferred when duration = period of lease NB. Cannot prohibit selective dealers from selling specified competitive brands

Vulnerable Restrictions (3) Post Termination Restrictions Limited to:- Competing goods/services Premises from which reseller operated One year (know how unlimited whilst remains secret) and must be indispensable to protect know how

Motor Vehicle Block Exemption Regulation 1400/2002 (MVBER) Previous BERs conferred high degree of intra-brand protection to safeguard dealer investments in sales/servicing However price differentials between Member States have persisted Frequent violations of Article 81 by manufacturers, e.g. BMW, Ford, Peugeot, Citroen, VW, Opel and DaimlerChrysler

MVBER - Outline Follows a similar pattern to VABER Applies to agreements at all levels of vehicle distribution in respect of: –Sale of new motor cars and commercial vehicles –After-sale servicing –Spare part supply Parties must be non-competitors save for non-reciprocal vertical agreements: – between reseller with annual sales <100m; or –where manufacturer competes in direct sales and reseller not a manufacturer

MVBER – Market Shares As with VABER a 30% cap (measured by reference to reseller for exclusive distribution) Selective distribution: –Qualitative selective distribution – no limit on market share (case law reliant) –Quantitative selective distribution 40% cap Different markets for (and consequent shares of): – new vehicles –new parts –service/repair

MVBER – Conditions (1) Agreement must: –be for a minimum of 5 years; or –if indefinite be terminable on 2 years notice or one year if supplier pays compensation (mandated by law or special agreement) or whole/substantial part of network being reorganised Disputes to be remitted to arbitration Termination notices must be in writing giving detailed objective and transparent reasons Reseller must have right to assign to another approved dealer

MVBER – Conditions (2) Cannot require reseller to purchase 30%+ of requirements for goods/services from supplier Prohibition of sales of competing brands goods/services impermissible Post-termination restrictions on provision of goods/services impermissible

MVBER – Hardcore Restrictions (1) Follows a similar pattern to VABER Setting fixed/minimum prices Territory/customer restrictions save for prohibition of: –Active sales to reserved customers/territories –Wholesale sales to end users –Sales to dealers outside selective network –Sales of components for incorporation by competitor Prohibition on cross supplies within selective network Prohibition on retail sales by selective dealers (subject to authorised establishment requirement)

MVBER – Hardcore Restrictions (2) Prohibition on selling new model within contract range Restricting resellers ability to subcontract repair/services to authorised repairers Linking vehicle sales and servicing/sale of spare parts Limits on sales of OEM products Refusing access by independent operators to manufacturers technical information, diagnostic tools and software needed for repair/maintenance

Licensor Licensee Not multiparty, although guidelines indicate that multiparty licences will be judged according to their effects under Art.s 81(1) and 81(3) Technology Transfer Block Exemption Regulation

Licensor Licensee Patents, includes: utility models design rights (registered and unregistered) topographies of semiconductor products supplementary certificates for medicinal products plant breeders rights The IP rights

Licensor Licensee Know-how: package of non patented practical information secret (not generally known) substantial: information indispensable for the manufacture or provision of the contract products identifiable in a manner which enables verification of criteria of secrecy and substantiality

The IP rights Licensor Licensee Software copyright

Licensor Licensee Licence of each or a mixture of: 1) patents 2) know-how 3) software copyright and other ancillary IP rights necessary for the manufacture or provision of the contract products/services The IP rights

The technology market - actual competitors The product market – actual OR potential competitors Difficult to ascertain markets Technology markets based on downstream sales of product NB: Market share volatility The Concept of Competitors

The Market Share Caps Licensor Licensee Non-Competitors each partys share < 30% Competitors - parties shares in aggregate < 20% NB. Para 131 Guidelines – 4 competing technologies

The technology market Licensor A (has separate market shares of 100%+15%) Licensor B (45%) Licensor D (20%) Licensor C (30%) The product market Licensee A (100%) market share in specialist safety gloves Licensee A (15%), Licensee B (45%), Licensee C (30%), Licensee D (20%) in general non-specialist market for safety apparel End Users Market Shares

Restriction on either licensor or licensee prices Output/sales limitations (save for limitations on a licensee in a non-reciprocal agreement or on only one licensee in a reciprocal agreement) Restriction on licensees exploitation of own technology or on parties R&D unless indispensable to protect know-how The Hardcore Restrictions where licensor and licensee are competitors

Market/customer restrictions save for: Field of use restriction on licensee In a non-reciprocal agreement restriction on either/both parties relating to reserved field of use or exclusive territory Licensor obligation not to license another licensee in a particular territory Restriction in a non-reciprocal agreement of active and/or passive sales to territory/customer group of other party Restriction in a non-reciprocal agreement of active sales by licensee to exclusive territory/customer group of a licensee (which was non-competing on grant of licence) Restriction on licensee to produce for own use (no active/passive restrictions on sale of spare parts for own products) Restriction in a non-reciprocal agreement to produce as alternative source of supply for designated customer The Hardcore Restrictions where licensor and licensee are competitors

Minimum/fixed resale prices Restrictions on parties R&D unless indispensable to protect know- how Restriction on territories/customers (save for certain permissible restrictions - see next slide) The Hardcore Restrictions where licensor and licensee are not competitors And save for:- Own use (and spare parts sale rights) Alternative source of customer supply Restrictions on wholesales to end users Prohibition of sales to unauthorised distributors by members of a selective network

Licensor Licensee 1 Non-competitors Can allocate: Exclusive territories Customer segments and restrict passive sales into licensor territories/customers and passive sales into other licensee territory/customers for initial 2 years Licensee 2 Non- competitors Territory 1 Sub-distributor 1 Territory 2 Sub-distributor 2 Territory 3 Sub-distributor 3 Cannot ban sales The Permissible Territorial and Customer Restrictions (1)

Licensor Licensee 1 Non-competitors Licensee 2 Non- competitors Selective Wholesaler 1 Selective Wholesaler 2 Selective Wholesaler 3 Selective Retailer 1 Selective Retailer 2 Selective Retailer 3 Must allow cross sales in network End Users Cannot ban sales The Permissible Territorial and Customer Restrictions (2)

Excluded Restrictions Grant back of exclusive licence or assignment by licensee of severable improvements Prohibition on challenging licensors intellectual property (NB licensor right of termination) Where licensor and licensee are not competitors, limitation on licensees ability to exploit own technology or engage in independent R&D (unless indispensible to protect licensor known how)