Table of Contents
Foreword v
Preface vii
Table of Cases xvii
Table of Legislation xxxvii
1 Introduction to Competition Law 1
1.1 The Economic Background to Competition Law 1
1.2 The Function(s) of Competition Law 2
1.3 The Market 4
1.3.1 Economic Theory Distinguishes Between Various Market Forms 4
1.3.2 Various Market Forms Are Important in Competition Law 6
1.3.2.1 Product Market 7
1.3.2.2 Geographic Market 11
1.3.2.3 The Development of the Market Over Time 16
1.3.3 Market Share 17
1.3.3.1 Determining the Market Share 18
1.3.3.2 The Market Position Is Not Necessarily Simply the Market Share 18
1.3.4 The Price Mechanism Is the Central Element of the Market 18
1.4 Competition Law and the Economic Theory of Regulation 19
1.5 Various Systems of Competition Law 22
1.6 The Renumbering of the TFEU by the Lisbon Treaty 23
2 The Basic Structure of Competition Law 24
2.1 Some Key Concepts in the Application of Competition Law 24
2.1.1 The Concept of an 'Undertaking' 24
2.1.2 Various Types of Agreement 27
2.2 The Combined System of UK and European Competition Law 28
2.2.1 Introduction 28
2.2.2 The Relationship Between UK and EU Competition Law 32
2.2.2.1 Concerning Collusive Practices (Cartels, etc) 32
2.2.2.2 Concerning Abuse of a Dominant Position 35
2.2.2.3 Concerning Concentrations 36
2.3 The Scope of Application of Competition Law 39
2.3.1 European Competition Law 39
2.3.2 UK Competition Law 40
2.3.3 UK Competition Law and Other Legislation 42
3 The Prohibition of Anti-competitive Agreements 45
3.1 Introduction 45
3.1.1 General 45
3.1.2 The Structure of Section 2(1) CA 1998 and Article 101 TFEU. How Should They Be Applied? 45
3.2 The Prohibition of Cartels 46
3.2.1 Introduction 46
3.2.2 Anti-competitive Practices: 'Collusion' 48
3.2.2.1 Agreements 48
3.2.2.2 Decisions of Associations of Undertakings 49
3.2.2.3 Concerted Practices 50
3.2.3 Restriction of Competition 51
3.2.3.1 Introduction 51
3.2.3.2 Object 53
3.2.3.3 Effect 54
3.2.4 The De Minimis Rule 55
3.2.4.1 Wouters: An Ancillary Restriction Not a Rule of Reason 57
3.2.5 Effect on Trade Between Member States 58
3.3 Voidness 59
3.4 Block Exemptions 60
3.4.1 Introduction 60
3.4.2 Block Exemptions in UK Competition Law 61
3.4.2.1 UK Law Block Exemptions 61
3.4.2.2 The System of 'Parallel Exemptions' in UK Law 62
3.4.3 The European Block Exemptions 62
3.5 Other Exceptions from Article 101(1) TFEU and the Chapter I Prohibition 66
3.5.1 Introduction 66
3.5.2 The Article 101(3) TFEU and Section 9 CA 1998 Criteria 68
3.5.2.1 Improvement in Production or Distribution, or the Promotion of Technical or Economic Progress 69
3.5.2.2 Fair Share of the Resulting Benefit for Consumers 70
3.5.2.3 The Restriction of Competition Must Be Indispensable 70
3.5.2.4 No Elimination of Competition 70
3.5.3 The Application of Article 101(3) 71
3.5.4 Commitments 71
3.5.5 An Example of an Article 9 of Regulation 1/2003 Decision 72
3.5.6 A Practical Example of an Assessment under Section 9 CA 1998: The OFT's Decision in Pool Reinsurance Co Ltd 72
3.6 Some Important Types of Anti-competitive Agreements 78
3.6.1 Introduction 78
3.6.2 Horizontal Agreements 78
3.6.3 Vertical Agreements 84
3.6.3.1 Introduction 84
3.6.3.2 The Block Exemption 84
3.6.3.3 UK Law 86
3.6.3.4 Some Specific Forms of Vertical Agreements 87
3.6.3.5 Agreements Not Covered by the Block Exemption 88
3.6.4 Agreements Concerning Intellectual Property (IP) Rights 90
4 The Prohibition of the Abuse of Positions of Dominance 92
4.1 Introduction 92
4.1.1 The Article 102 Enforcement Priorities 93
4.2 The Prohibition of the Abuse of a Dominant Position 94
4.2.1 Introduction 94
4.2.2 A Dominant Position 99
4.2.3 Behaviour of More than One Undertaking (Collective Dominance) 106
4.2.4 Abuse 108
4.2.4.1 Various Types of Abuse 109
4.2.4.2 Unfair Prices or Other Conditions 110
4.2.4.2.1 Predatory Pricing 110
4.2.4.2.2 The ED Case Law 111
4.2.4.2.3 UK Law 113
4.2.4.2.4 Excessive Pricing 114
4.2.4.2.5 Sharing of Markets 114
4.2.4.3 Margin Squeeze 114
4.2.4.4 Various Forms of Contracts 117
4.2.4.5 Refusals to Supply 118
4.2.4.6 Essential Facilities 121
4.2.4.7 Abuse in Relation to IP Rights 124
4.2.4.8 Market Division 127
4.2.4.9 Discrimination 127
4.2.4.10 Tying Practices 128
4.2.5 Objective Justification 130
4.2.6 Overlap Between the Prohibition of the Abuse of a Dominant Position and Other Competition Law Provisions 132
4.2.6.1 Abuse of Dominant Position and Anti-competitive Agreements 132
4.2.6.2 Market Studies and Market Investigations Under UK Competition Law 133
5 Control of Concentrations 136
5.1 Introduction 136
5.2 The Key Elements of the EU Merger Regulation 138
5.2.1 Introduction 138
5.2.2 Prior Notification and Procedure 138
5.2.2.1 Prior Assessment 138
5.2.2.2 Putting the 'One-stop Shop' System into Perspective 139
5.2.2.3 Notification 140
5.2.2.4 Time Limits 141
5.2.2.5 Decision by the Commission in the First Phase 143
5.2.2.6 Decision by the Commission in the Second Phase 144
5.2.2.7 Remedies and Amendments of the Notification 144
5.2.2.8 Decisions Subject to Conditions 145
5.2.2.9 Commission Enforcement 147
5.2.2.10 Simplified Procedure 150
5.2.3 'Concentration' 151
5.2.3.1 General 151
5.2.3.2 Joint Ventures 153
5.2.4 Thresholds: The Union Dimension 154
5.2.4.1 General 154
5.2.4.2 Turnover 155
5.2.4.3 Undertakings Concerned 157
5.2.5 Substantive Assessment 158
5.2.6 Ancillary Restrictions 162
5.2.7 The Nature of the Judicial Review and the Standard of Proof Applied by the Union Courts 164
5.3 Merger Control in the UK System 165
5.3.1 Introduction 165
5.3.2 Procedural Stages 167
5.3.2.1 The Phase I Procedure and the Role of the CMA 169
5.3.2.2 The Phase II Procedure and the Role of the CMA Phase II Inquiry Group 173
5.3.2.3 A Role for the Secretary of State? 175
5.3.3 Substantive Assessment 176
5.3.3.1 Market Definition 178
5.3.3.2 Measures of Concentration 178
5.3.3.3 Horizontal Mergers 179
5.3.3.4 Non-horizontal Mergers 180
5.3.3.5 Countervailing Factors 181
5.3.4 Enforcement and Remedies 183
5.3.4.1 Regulatory Enforcement 183
5.3.4.2 Third Parties 187
5.3.5 Judicial Review 187
5.3.6 Some Statistics 190
6 The Application and Enforcement of Competition Law 192
6.1 Introduction 192
6.2 The Application of Competition Law by the Courts 193
6.2.1 The Substantive Provisions of EU and UK Competition Law 194
6.2.1.1 Article 101 TFEU and/or the Chapter I Prohibition 195
6.2.1.2 Article 102 TFEU and/or the Chapter II Prohibition 195
6.2.1.3 General Observation 196
6.2.2 Cooperation between the Commission, the CMA and the National Courts 196
6.3 Competition Procedure and Enforcement under UK Law 198
6.3.1 Introduction 198
6.3.2 Inquiries and Investigations 199
6.3.2.1 Written Inquiries 200
6.3.2.2 Interviews 200
6.3.2.3 Powers to Enter Premises 201
6.3.2.4 Limits on Powers of Investigation 203
6.3.2.5 Offences: Sanctions for Non-compliance 205
6.3.3 Complaints 205
6.3.4 Opinions and Informal Advice 206
6.3.5 Enforcement 206
6.3.5.1 Regulatory Enforcement 206
6.3.5.2 Criminal Law Enforcement: The Cartel Offence 212
6.3.5.3 Judicial Review and Private Enforcement 216
6.4 Enforcement of EU Competition Law 220
6.4.1 Introduction 220
6.4.2 The Official Procedure-Ex Officio Enforcement by the Commission 222
6.4.2.1 General 222
6.4.2.2 The Formal Procedure 224
6.4.2.3 Commitments 225
6.4.2.4 Interim Measures 227
6.4.3 Complaints 227
6.4.4 Determinations of the Inapplicability of Article 101(1) or (3) TFEU, or of Article 102 TFEU 229
6.5 Leniency Policy 230
6.6 Private Actions for Damages 232
6.7 Rights of the Defence 233
6.8 Judicial Protection in EU Competition Law 235
6.9 Division of Competence and Cooperation Between the Commission and the National Competition Authorities 237
7 Competition Law and the State 240
7.1 Introduction 240
7.2 The Rules for Public Undertakings and Undertakings with Exclusive or Special Rights 241
7.2.1 The EU Rules for Public Undertakings-Article 106 TFEU 241
7.2.1.1 Services of General Economic Interest 242
7.2.1.2 Article 106(1) TFEU 246
7.2.1.3 Article 106(2) TFEU 247
7.2.1.4 Article 106(3) TFEU 250
7.2.2 The Rules for Public Undertakings Under UK Law 252
7.3 The Norm of Article 4(3) TEU and Articles 101 or 102 TFEU 254
7.4 How to Assess Mixed Situations? 258
7.4.1 The Joint Operation of the Rules 258
7.4.2 Evaluation: Are Governments Limited in Their Pursuit of General Interests? 260
7.5 EU State Aid Law: A General Introduction 261
7.5.1 Introduction 261
7.5.2 Material Principles 262
7.5.2.1 The Concept of 'State Aid' 262
7.5.2.2 Selectivity 263
7.5.2.3 Effect upon Competition and Trade between Member States 264
7.5.2.4 The 'Market Economy Investor Principle' 265
7.5.2.5 Exceptions 267
7.5.2.6 Block Exemptions and Guidelines 270
7.5.3 Procedural Rules, Article 108 TFEU and Regulation 2015/1589/EU 272
7.5.3.1 Introduction 272
7.5.3.2 Existing Aid 274
7.5.3.3 New Aid 275
7.5.3.3.1 Introduction 275
7.5.3.3.2 The Preliminary Examination Procedure 275
7.5.3.3.3 The Formal Investigation Procedure 276
7.5.3.3.4 The Simplified Procedure 277
7.5.3.3.5 The Position of Complainants 278
7.5.3.3.6 Unlawful Aid 278
7.5.3.3.7 The Role of National Courts 279
7.5.3.3.8 Other Procedural Issues 280
7.5.3.4 Recovery 281
7.5.4 State Aid to the Financial Sector 282
7.5.4.1 Introduction 282
7.5.4.2 The Commission Communications 282
8 The International Dimensions of Competition Law 286
8.1 Introduction 286
8.2 The Geographic Scope of Application of EU and UK Competition Law 287
8.3 International Cooperation 293
8.3.1 The European Competition Network (ECN) 293
8.3.2 The EEA Treaty and the Europe Agreements 294
8.4 International Agreements 295
8.4.1 International Agreements and Their Implementation 295
8.4.1.1 Introduction 295
8.4.1.2 General Notes on Bilateral Competition Relations 296
8.4.1.3 Comprehensive Bilateral Treaties 297
8.4.1.3.1 The Bilateral Treaties Between the EU and the USA of 1991 and 1998 297
8.4.1.3.2 EU and USA Best Practices on Cooperation in Merger Investigations 299
8.4.1.3.3 Canada 300
8.4.1.3.4 Australia 300
8.4.1.3.5 Switzerland 301
8.4.1.4 Less Comprehensive Bilateral Agreements 302
8.4.1.4.1 The 2011 USA-China Memorandum 302
8.4.1.4.2 The EU-China Memorandum of 2012 303
8.4.1.5 OECD, ICN, WTO and UNCTAD 303
8.5 Relevant Concepts 305
8.5.1 Ne Bis in Idem 305
8.5.2 Convergence 308
8.5.3 Problems in the Application of the Leniency Rules 309
8.5.4 State Owned Enterprises (SOEs) 311
8.5.4.1 Commission Decisions to Date Dealing with SOEs from Third Countries 312
8.5.4.2 An Instructive Example 313
9 Epilogue: A Brief Overview of the Development of EU Competition Law 315
9.1 Introduction 315
9.2 The Early and Formative Years 1958-1989 316
9.2.1 Introduction 316
9.2.2 Regulation nr 17/62 317
9.2.3 Developing the Policy 317
9.2.4 Extraterritorial Jurisdiction 318
9.2.5 Excluded Sectors 319
9.3 1989-2004: A Period of Consolidation 319
9.3.1 Merger Control 319
9.3.2 Simplification of the Block Exemptions 320
9.3.3 Liberalisation 320
9.4 Accession of the New Member States and the Enactment of Regulation 1/2003 on 1 May 2004 322
9.4.1 Accession 322
9.4.2 Regulation 1/2003 322
9.4.3 Pursuing High-profile Infringements 323
9.4.4 Sector Inquiries 324
9.4.5 Commitment Decisions and Settlements 325
9.4.6 Merger Control 325
9.4.7 Article 102 TFEU 326
9.4.8 Evaluation of Regulation 1/2003 326
9.5 Since 1 December 2009 We Have Articles 101 and 102 TFEU, Arbitration and Human Rights 327
9.5.1 Changes in the Lisbon Treaty 327
9.5.2 Arbitration 328
9.5.3 Human Rights 328
9.6 Conclusions 330
Index 331
