1. INTRODUCTION TO COMPETITION LAW
Nenad Gavrilovic, PhD
Assistant Professor at the Faculty of Law “Iustinianus Primus” in Skopje
INTRODUCTION TO COMPETITION LAW

2. The Notion of Competition Law
Competition Law is a particular legal discipline that regulates legal relations that form following the carrying out of economic activities
The central idea of competition law is the regulation of market activities of undertakings
The central aim of competition law is the achievement of a competitive market

3. The System of Competition law
Antitrust
Abuse of a Dominant Position
Control of Concentrations
State Aid
Unfair Competition

4. Legal Sources of Competition Law (1)
Domestic Sources
European Sources
Constitution
Law on Protection of Competition
Law on Control of State Aid
Law on Unfair Competition
Regulations of the Government
Notices and Guidelines of the Commission for Protection of the Competition?
Case Law?
Treaty on the Functioning of the European Union
Regulations of the Council and the Parliament
Regulations of the Commission
Notices and Guidelines of the Commission?
Case Law?

5. Legal Sources of Competition Law (2)
Substantive Provisions
Procedural Provisions
The substantive provisions regulate the particular acts of undertakings by determining the conditions by which a certain act can be qualified as uncompetitive
The procedural provisions regulate the competence of certain bodies (in principle, administrative organs) and the procedure of determining whether a certain act can be qualified as uncompetitive

6. Domestic Competition Law and EU Competition Law
The following are incompatible with the proper functioning of the Agreement, insofar as they may affect trade between the Community and the former Yugoslav Republic of Macedonia:
all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;
abuse by one or more undertakings of a dominant position in the territories of the Community or of the former Yugoslav Republic of Macedonia as a whole or in a substantial part thereof;
any public aid which distorts or threatens to distort competition by favouring certain undertakings or certain products
Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the rules of Articles 81, 82 and 87 of the Treaty establishing the European Community.
Article 69(1) and 2 SAA

7. Parties and Aims Parties Aims Free Market Competitive Market
Undertakings
Society
Consumers
Free Market
Competitive Market
Liberal Market
Low Prices
High Quality Goods and Services
Efficiencies
Consumer Welfare…

8. Antitrust
Basic Principles

9. Subject Matter of Antitrust
Sanctioning of bilateral behavior
Covering agreements, concerted practices and decisions of associations
Covering agreements notwithstanding whether made between competitors or not
Covering agreements notwithstanding the level of the economy

10. Basic Legal Provisions (1)
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 and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
directly or indirectly fix purchase or selling prices or any other trading conditions;
limit or control production, markets, technical development, or investment;
share markets or sources of supply;
apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
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.
Article 101(1) TFEU

11. Basic Legal Provisions (2)
Any agreements or decisions prohibited pursuant to this Article shall be automatically void.
Article 101(2) TFEU

12. Basic Legal Provisions (3)
The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
any agreement or category of agreements between undertakings,
any decision or category of decisions by associations of undertakings,
any concerted practice or category of concerted practices,
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.
Article 101(3) TFEU

13. The System of Group Exemptions
Established either:
Directly by the Council (and the parliament)
By empowering the Commission
Procedural matters covered by Council Regulation (EC) No 1/2003 of 16 December on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty
Substantive matters mostly covered by Regulations of the Commission and related notices and guidelines

14. Sectors of Application of Block Exemptions
Vertical agreements:
Vertical agreements in general
Motor Vehicles
Horizontal agreements
Licensing agreements for the transfer of technology
Specific sector legislation:
Agriculture
Insurance
Postal services
Professional services
Transport
Telecommunications

15. Key Points of Block Exemptions
Market Share
Effect on Trade
Hardcore Restrictions
Un(presumed) Invalidity
Partial Nullity
Divided Competences
Administrative Bodies and Courts
National and European Bodies
Administrative and Civil Sanctions
Ex Officio or following a Complaint
De Minimis
Informal Guidance
Leniency in Cartels

16. Burden of Proof
In any national or Community proceedings for the application of Articles 101 and 102 of the Treaty, the burden of proving an infringement of Article 101(1) or of Article 102 of the Treaty shall rest on the party or the authority alleging the infringement. The undertaking or association of undertakings claiming the benefit of Article 101(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled
Article 2 Council Regulation (EC) No 1/2003

17. Abuse of a Dominant Position
Basic Principles

18. Subject Matter of Abuse of a Dominant Position
Sanctioning of unilateral behavior
Possible overlapping with sanctioning of bilateral behavior
Distinction between dominant position and its abuse

19. Basic Legal Provisions
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;
(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.
Article 102 TFEU

20. Key Points of Determining Abuse (1)
Procedural matters covered by Council Regulation (EC) No 1/2003 of 16 December on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty
Substantive matters covered by Communication from the Commission: Guidance on its enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings

21. Key Points of Determining Abuse (2)
Determining the Dominant Position on the Market
Geographic Market
Product Market
Determining the Abuse
Divided Competences
Administrative Bodies and Courts
National and European Bodies
Administrative and Civil Sanctions
Ex Officio or following a Complaint
Informal Guidance

22. Burden of Proof
In any national or Community proceedings for the application of Articles 101 and 102 of the Treaty, the burden of proving an infringement of Article 101(1) or of Article 102 of the Treaty shall rest on the party or the authority alleging the infringement. The undertaking or association of undertakings claiming the benefit of Article 101(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled
Article 2 Council Regulation (EC) No 1/2003

23. Control of Concentrations
Basic Principles

24. Subject Matter of Control of Concentrations
Concentrations can occur as
Mergers
Acquisitions
In practice, most cases involve acquisitions or takeovers and not mergers
Legally speaking, acquisitions should not be confused with takeover bids
De lege and de facto concentrations are covered

25. Basic Legal Provisions
The TFEU does not expressly cover the cases of concentrations
When the TFEU is in question, concentrations are between the regimes of Articles 101 and 102 TFEU
The basic legal source in the EU is Council Regulation (EC) No 139/2004 of 20 January on the control of concentrations between undertakings (the EC Merger Regulation)
Substantive issues are mostly covered by Notices and Guidelines of the Commission

26. Key Points of Merger Control
A Notification is Needed
The concentration is suspended pending decision of the Commission
The Commission has exclusive jurisdiction ever Community mergers
National merger regulation remains intact
Commitments Possible
Strict Time Limits

27. State Aid
Basic Principles

28. Subject Matter of State Aid
Advantages in any form whatsoever conferred on a selective basis to undertakings by national public authorities
Ensuring that government interventions do not distort competition and trade inside the EU
Sectors of Fisheries and Agriculture ubder special regimes

29. Basic Legal Provisions (1)
Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.
Article 107(1) TFEU

30. Basic Legal Provisions (2)
The following shall be compatible with the internal market:
(a) aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned;
(b) aid to make good the damage caused by natural disasters or exceptional occurrences;
(c) aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, in so far as such aid is required in order to compensate for the economic disadvantages caused by that division. Five years after the entry into force of the Treaty of Lisbon, the Council, acting on a proposal from the Commission, may adopt a decision repealing this point.
Article 107(2) TFEU

31. Basic Legal Provisions (3)
The following may be considered to be compatible with the internal market:
(a) aid to promote the economic development of areas where the standard of living is abnormally
low or where there is serious underemployment, and of the regions referred to in Article 349, in view of their structural, economic and social situation;
(b) aid to promote the execution of an important project of common European interest or to
remedy a serious disturbance in the economy of a Member State;
c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;
d) aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Union to an extent that is contrary to the common interest;
(e) such other categories of aid as may be specified by decision of the Council on a proposal from the Commission.
Article 107(3) TFEU

32. Key Points of State Aid
Procedural Issues covered by Council Regulation No 659/1999 of 22 March laying down detailed rules for the application of Article 93 (now Art.88) of the EC Treaty
Notification Needed
Standstill until a Decision of the Commission is made
De Minimis

33. Block Exemptions and State Aid
General rules established by Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Article 87 and 88 of the Treaty (General block exemption Regulation)
Block Exemptions applicable to:
regional aid;
SME investment and employment aid;
aid for the creation of enterprises by female entrepreneurs;
aid for environmental protection;
aid for consultancy in favour of SMEs and SME participation in fairs;
aid in the form of risk capital;
aid for research, development and innovation;
training aid;
aid for disadvantaged or disabled workers.

34. Unfair Competition
Basic Principles

35. Subject Matter of Unfair Competition
Unfair competition covers the acts of undertaking which are against the principle of good faith and fair dealing and by which a harm is inflicted to competitive undertakings
Generally, unfair competition covers unilateral acts
Rules on protection form unfair competition are mostly focused on

36. Basic Legal Provisions
The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition.
Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.
The following in particular shall be prohibited:
all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor;
false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor;
indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.
Article 10bis Paris Convention

37. Key Points of Unfair Competition
Unilateral Acts
For the Purposes of Competition
Against Good faith and Fair Dealing
Claims
Ceasing with the Acts
Damages
Acts do not need be qualified as abuse of dominant position

38. Some Examples Pyramid Sales Untrue Statements Price Comparisons Tying
Comparative Advertising
Misuse of IP Rights…