1. Markkinoiden juridinen toimintaympäristö Kalvot 15
Kilpailuoikeus
Matti Rudanko

2. A Constitution of Market Economy
Well-functioning markets – an unwritten fundamental right?
A prerequisite of freedom of contract and freedom of trade
Monopolies and cartels prevent access to the market and create barriers to trade
Also political power is being transferred to companies due to privatization and globalization
Markkinoiden juridinen toimintaympäristö Kalvot 15

3. Targets of Regulation by the Constitution
The mutual power relations of actors
Decision making mechanisms
The relationships between authorities and other actors
Goal: balance
Karl Marx – Adam Smith (the visible / invisible hand) – the modern competition law
Efficiency has to be ensured: functioning competition
Markkinoiden juridinen toimintaympäristö Kalvot 15

4. The Objectives and Goals of Competition Law
Allocation of resources, innovations
Well-functioning competition: efficiency of economy
Transfers of income to monopolists
Interests of consumers (e.g. the Finnish Competition Act)
justice?
Societal goals?
Sound competition (fair play); improper business practices
Integration objective (EU); cf. well-functioning competition
Markkinoiden juridinen toimintaympäristö Kalvot 15

5. Market Law /Competition Law
Market Law (in the broad sense)
Trade policy
legislation
Competition
Law:
restrictions
of competition
Consumer
protection:
marketing
etc.
Improper Bus.
Pract. Act
B2B
Marketing
private
Sound and
eff. comp.,
client
interests
Rationality
of consumer
behavior
Fair comp.,
protection of
competitors
Reg. on
Barriers to
Trade (EU)
dumping
public
Balance of
payments,
employment
Legal discipline
Fields of law
and targets
Interests
Objectives
Markkinoiden juridinen toimintaympäristö Kalvot 15
Taloushallinnon juridiikka 5

6. European and Finnish Competition Law
Treaty on the functioning of the European Union, art. 101 and 102 (2008; replaces the Treaty Establishing the EEC; nb. also the Treaty on the European Union or Maastricht Treaty)
regulations
EU competition law directly applicable in member states
Duty of application when the restriction on competition affects trade between member states
Application by the national authorities possible
Principle of the priority of EU law
Mandatory reaction by national authorities
The Commission can take up any case
No individual exemption orders but block exemption regulations
New rules:
Markkinoiden juridinen toimintaympäristö Kalvot 15 6

7. Cartels 1 Art. 101 Treaty on the Functioning of the EU
The following shall be prohibited as incompatible with the internal market:
all agreements between undertakings, decisions by associations of undertakings and concerted practices which may
affect trade between Member States (the trade criterion / community dimension) and
which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
Markkinoiden juridinen toimintaympäristö Kalvot 15

8. Cartels 2
…(cont.) all agreements between undertakings, decisions by associations of undertakings and concerted practices which may
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Any agreements or decisions prohibited pursuant to this Article shall be automatically void.
Markkinoiden juridinen toimintaympäristö Kalvot 15

9. Exemptions from Cartel Rule Application
The provisions of paragraph 1 may, however, be declared inapplicable in the case of an arrangement of or between undertakings
which contributes to improving the production or distribution of goods or to promoting technical or economic progress,
while allowing consumers a fair share of the resulting benefit,
and which does not:
(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
Markkinoiden juridinen toimintaympäristö Kalvot 15

10. Cartels 3 Procedural issues EU: Commission – court of first instance
Finland: Competiton Authority – Market Court
Sanction fee (max 10 % of the turnover)
Exemption for aiding the investigation of a restriction of competition (Finnish Competition Act)
Invalidity of the contract (term) and / or damages in a (general) national court
A legal commitment accepted by the Competition Authority (sect.10 Competition Act)
Markkinoiden juridinen toimintaympäristö Kalvot 15 10

11. Abuse of a Dominant Position 1
Art. 101 Treaty on the Functioning of the EU
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may
affect trade between Member States.
Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers; (cont.)
Markkinoiden juridinen toimintaympäristö Kalvot 15

12. Abuse of a Dominant Position 2
… (cont.) such abuse may, in particular, consist in:
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Definition: an undertaking can to a remarkable degree behave on the market independently of competitors, clients and consumers (formulation of the EU court)
No monopoly needed; the required market share varies
Nb. definition of relevant markets (product / geographic)
Replaceableness of products, elasticity
Markkinoiden juridinen toimintaympäristö Kalvot 15

13. The Basic Positions of Competition Law
1. Art. 101 A B
2. Art. 102
3. Control of
concentrations
between
undertakings C
Markkinoiden juridinen toimintaympäristö Kalvot 15

14. Control of Concentrations between Undertakings 1
Application
EU: Regulation 4064/89 (old merger regulation); Regulation of the Council (EU) 139/2004 on control of concentrations between undertakings ('EU merger regulation)
Finland: Ch. 4 Competition Act
mergers
joint ventures
acquisitions: share deal (acquisition of corporate control / asset deal (acquisition of business)
Markkinoiden juridinen toimintaympäristö Kalvot 15 14

15. Control of Concentrations between Undertakings 2
Conditions of EU (Commission) intervention :
EU: Community dimension / trade criterion: the exclusive authority of the Commission
Total global turnover more than 5 B€ and the turnover of two parties in EU territory 250 M€, and
The minimum turnover volume of each undertaking and the distribution of their turnover in EU member states are fulfilled
Otherwise the case can be brought to the authority with the most efficient means to examine the case (e.g. Kesko / Tuko case)
Markkinoiden juridinen toimintaympäristö Kalvot 15 15

16. Control of Concentrations between undertakings 3
Sanctions:
Duty of notification to the Commission
Ban / conditions imposed by the Commission if
a dominant position is created or
strengthened
The Finnish Competition Act:
total turnover more than 350 M€ and
the turnover of at least two parties in Finland more than 20 M€
certificate of non-intervention
Markkinoiden juridinen toimintaympäristö Kalvot 15 16

17. The Application of Competition Law 1
Markkinoiden juridinen toimintaympäristö Kalvot 15

18. The Application of Competition Law 2
Markkinoiden juridinen toimintaympäristö Kalvot 15

19. The Application of Competition Law 3
1) 1983/83 exclusive sales agreements 1984/83 exclusive purchase agreements 417/85 specialization agreements 418/85 research and development (R&D) agreements 240/96 transfer of technology agreements 2349/84 patent licence agreements 556/89 know-how licence agreements 2) 4087/88 franchising agreements
Markkinoiden juridinen toimintaympäristö Kalvot 15

20. The Application of Competition Law 4
The former block exemption regulations replaced with:
Commission Regulation 2790/1999 (vertical agreements and concerted practices)
Commission Regulation 2658/2000 (specialization agreements)
Commission Regulation 2659/2000 (research and development agreements)
Etc.
Markkinoiden juridinen toimintaympäristö Kalvot 15