Cert Ip - Eu Competition Law Cases

Front 1

Wood pulp

Back 1

• Art 101 can apply to undertakings having their location outside the EU, and to situations where unlawful conduct might have been initiated outside the EU
  
• Parallel conduct cannot be regarded as proof of concerted practice (e.g. to fix prices) unless this is the only plausible explanation for such conduct
  
• Market data not used by Commission to argue collusion since. Obtaining evidence of correspondence between the parties is now the Commission's main strategy.

Hint 1

• Undertakings from outside EU
  
• Parallel conduct and collusion
  
• Commissions change in strategy in proving collusion
  

Front 2

Akzo v Commission (dominance)

Back 2

• 50% market share is conclusive evidence of dominance.
  
• Prices below average variable costs would be considered abusive
  
• Prices set higher than average variable costs but below average total costs, might be considered abusive if other factors suggested a predatory intent.
  

Hint 2

• Market share/ dominance
  
• Price level and abuse
  

Front 3

Cartes Bancaires

Back 3

• Anti competitive by object should be interpreted narrowly in Art 101.
  
• The concept of restriction of competition byobject can only be applied to those types of coordination which reveal a degree of harm to competition sufficientthat there is no need to examine their effects
• When examiningconduct in a two-sided market it isnecessary to consider the relevant measures in the context of both sides of themarket.
  

Hint 3

• Interpretation of anti-competitive 'by object'
  
• Examining conduct in two-sided markets
  

Front 4

Chemidus Wavin v. TERI

Back 4

Under English law, VOID clauses severable ifremaining agreement accurately reflects agreement originally reached

What’s left is a matter for national law to decide on validity of ­ e.g. in a licensing agreement, should be plenty of stuff left

Hint 4

• What happens after void provisions removed by Art. 101
  
• Minimum royalty payments
  

Front 5

Commercial Solvents

Back 5

• Abuse of a dominant position on the market in raw materials may have the effect of restricting competition in the market on which the final articles are sold.These effects must be taken into consideration.
  
• An undertaking in a dominant position regarding the production and supply of raw materials cannot, by deciding itself to start manufacturing the final articles, eliminate the competition of its former customers. Such conduct is contrary to the Treaty of Rome 1957 Art.3(F), 85 and 86.
  

Hint 5

• Abuses of dominance by producers/ suppliers of raw material
  

Front 6

Consten & Grundig

Back 6

• Vertical agreements can fall within Art 101.
  
• Aneffect on either inter-brand or intra-brand competition is sufficient toinvoke Art 101
  
• Theprimary purpose of requirement for an 'effect trade between member states' was to determine jurisdiction
  
• Includes cross border activity such as establishment of a business which had as its object the restriction of competition irrespective of its effects
  
• verticalrestraints which obstruct the integration of national markets are likely to be condemned.
  

• Improper use of trade mark rights can infringe Art. 101

Hint 6

• Vertical agreements
  
• Inter/ Intra brand competition
  
• Restriction of competition by object
  
• obstruct of the integration of national markets
  
• Improper TM use
  

Front 7

Courage v Crehan

Back 7

• Anyindividual can claim compensation for … harm suffered where there is a causalrelationship between that harm and an agreement or practice prohibited under Art. 101.
  
• Even if the individual is party to the agreement.
  

Hint 7

Who can claim for compensation when Art 101 is breached?

Front 8

Hilti v Commission

Back 8

Factors for Assessing Dominance

• resources,
  
• size
  
• commercial superiority
  
• technical superiority
  
• IPR
  
• R&D strength

Tying & bundling - market definition

Even if there is clearconnection between the products, they may legitimately be viewed as separatemarkets.

Tying and bundling - abuse

Attempt to restrict the competition for consumables by tying or bundling is an abuse.

Hint 8

• Factors for Assessing Dominance
  
• Tying & bundling - market definition
  
• Tying and bundling - abuse
  

Front 9

Irish Beef

Back 9

• Companies are to beadvised that an economic crisis does not preclude their agreements from falling within the scope of Art 101.
  
• Certainforms of collusion are, by their very nature, injurious to the properfunctioning of competition
  
• Any limitation of capacity by agreement, even if it concerns excess capacity, is very likely to beconsidered anti-competitive by object.
  
• Therefore the actual effects of such an agreement don't have to be proven.

Hint 9

• Economic crises
  
• Limitations of capacity (object/effect)
  

Front 10

Maize Seed (Nungesser)

Back 10

• OPEN Exclusive IP licenses (i.e those that don't affect parallel imports by third parties) not prohibited by Art 101
• An exclusive IPR license granted in respect of a certain member-State, in conjunction with an agreement appointing the licensee sole distributor for that territory, has the effect of ensuring absolute territorial protection for the licensee by preventing parallel imports (and therefore prohibited by Art 101).

Hint 10

Exclusive licences/ Sole distributorships/

Parallel imports

Front 11

Oscar Bronner

Back 11

• OB held a very large share of the daily newspaper market in a Member State and operated the only nationwide newspaper home-delivery scheme in that Member State Publisher of a rival newspaper, which was unable to set up and operate its own home-delivery scheme in economically reasonable conditions complained he was refused access to the scheme.
  
• OB allowed to refuse access to that scheme for appropriate remuneration without being considered to be abusing a dominant position within the meaning of Art 102.
  

Hint 11

Refusal of larger undertakings to share distribution schemes & Art 102.

Front 12

Purple Parking v Heathrow

Back 12

Heathrow abused its dominant position by the compulsory relocation of the Claimants' ‘meet and greet' (or ‘valet parking') businesses from the forecourts at Terminals 1 and 3 to the short stay car parks, whilst allowing Heathrow's own valet parking operations to remain in their existing trading locations.

Hint 12

Abuse of domanance

Front 13

Sealink/B&I Holyhead

Back 13

Owner of an essential facility may have to provide non-discriminatory access to a competitor to avoid abuse of dominance.

Hint 13

Essential facilities - Art 102

Front 14

United Brands (market definition)

Back 14

Product market – Demand substitutability:

• Are products reasonably interchangeable by consumers with other kinds?
  
• “Avery large number of consumers having a constant need for bananas are notnoticeably or even appreciably enticed away" and “consequently the bananamarket is a market that is sufficiently distinct from the other fresh fruitmarket”.
  

Geographic market:

• Therelevant geographic market is “an area where the objective conditions ofcompetition applying to the product in question [are] the same for all traders”
  
• Itis “an area which is sufficiently homogeneous to be considered in its entirety”
  
• Whetheror not a dominant position extends to a substantial part of the internal marketdepends on specific market for product in question, not just on absolutegeographic area.
• Unioncan support several substantial markets in same product provided conditions ofcompetition are different
  

Front 15

United Brands (Abuse of Dominance)

Back 15

Dominant Position Definition:

“aposition of economic strength which enables the undertaking to preventeffective competition on the relevant market by giving it the power to behaveto an appreciable extent independently of its competitors, customers andultimately its consumers.”

Assessment of Dominance:

Inassessing dominance, the tribunal should consider the undertakings relativestrength in the relevant product, geographical and temporal markets.

Examples of Abuse

■ requiringdistributors not to sell green bananas (to prevent arbitrage)

■ chargingdistributors different prices without any objective justification [breach ofA102(c)]

■ imposingexcessive prices on some distributors - up to 138% of others - the ECJoverruled the Commission on this point, citing a lack of sufficient evidence ofUB’s costs to support the alleged abuse

■ refusingto supply distributors which had promoted rival brands

Front 16

Volk v Vervaecke

Back 16

• Small exclusive dealing arrangement may escape prohibition under Art 101 if no appreciable effect competition
  
• requires there to be an appreciable effect on trade and competition
  

Hint 16

Small dealings

Front 17

Volvo v Veng

Back 17

• A refusal to licence design rights for spare parts, even in return for reasonable royalties, was not an abuse per se, but might become an abuse under certain circumstances
  
• The right to prevent third parties from manufacturing,or selling or importing, products incorporating the design without the consent of the proprietor constitutes the very subject matter of the proprietor’s exclusive rights
  
• Refusal to license may be abuse of dominance if:
  

i) the proprietor arbitrarily refuses to supply spare parts to repairers,

ii) prices are fixed at excessive levels,

iii) or a decision is made not to make parts for a certain model a while many cars of that model were in circulation,

Hint 17

Spare parts

Refusal to license design rights

Abusive behaviours

Front 18

Windsurfing International v Commission

Back 18

The following clauses in patent licensing agreements are incompatible with Art 101 in so far as they restrict competition:

• quality controls to be exercised by the licensor in respect of a product not covered by the patent,
  
• an obligation arbitrarily placed on the licensee only to sell the patented product in conjunction with a product outside the scope of the patent,
  
• a method of calculating royalties inducing the licensee to refuse to sell separately a product not covered by the patent,
  
• an obligation on the licensee to affix a notice of the patent to a product not covered by the patent,
  
• a no-challenge clause with regard to the licensor’ s trade-marks and patents, and
• a clause prohibiting the licensee from manufacturing the patented product in a country where it has no patent protection.

Only if the agreement as a whole is capable of affecting trade is it necessary to examine which are the clauses of the agreement which have as their object or effect a restriction or distortion of competition

Hint 18

Prohibited clauses in a patent licensing agreement

Front 19

Albany International

Back 19

Undertakings

agreements made in the context of collective negotiations between employers and employees in pursuit of recognised social policy objectives are not caught by Art 101(1).

Hint 19

Undertakings:

collective negotiations between employers and employees

Front 20

Continental Can

Back 20

• List of abuses in Art 102 is not exhuastive
• Acquisitionof shares in a competing undertaking, which had the effect of increasing thepower of an already dominant position, was considered an abuse.
• Merger objection overturned by CJEU because market share was not properly formulated by the the Commission.
  
• Glass jars with lids compete with metal cans and even plastic containers, so finding of dominance on the market not sustained.

Hint 20

• List of abuses in Art 102
  
• Mergers and Art 102
  
• Importance of correctly calculating market share
  

Front 21

Der Grune Punkt

Back 21

• A dominant undertaking in the national-used-packaging-collection market required its customers to use its logo on packaging eligible for collection under its scheme
  
• The imposition of a royalty fee based on the amount of packaging in circulation bearing the logo rather than the amount of packaging actually recovered under the scheme was an abuse of its dominant position contrary to Art 102
  

Front 22

Devenish v Sanofi [2008]

Back 22

Compensatorydamages will be awarded, not exemplary or punitive, or accounts of profits.

Hint 22

Type of damages awarded nationally

Front 23

Energie Baden-Wurttemberg AG (EnBW) (Gas Insulated Switchgear Cartel)

Back 23

• ECJ held that the European Commission was entitled to refuse Energie Baden-Wurttemberg AG (EnBW) full access to the Commission's file relating to the gas insulated switchgear cartel.
  
• Granting access to the documents would jeopardize the protection of inspections and investigations and of sensitive commercial interests of the parties to the proceedings
  
• There was no overriding public interest in granting access to the requested documents.
  

Hint 23

Granting of access to documents held by the Commission

Front 24

European Night Services v Commission

Back 24

• Relates to horizontal agreements whose pro-competitive effects may outweigh the anti-competitive effects.
  
• The parties agreed to a price-fixing agreement in regard to the terminal dues which they charged eachother when delivering international mail. First task is to assess thecompetitive conditions in which the agreements operate. It may be the case that a horizontalagreement may not fall within Art. 101 because it had no deleterious effect oncompetition. However, where certainrestrictions (such as price fixing) are present it must be assumed that Art.101 applies, and it would then become necessary to to analyse carefully thecompetitive conditions in order to see if the requirements for the applicationof Art. 101(3) were met.
  

Hint 24

Pro v anti-competitive effects (Art 101(3))

Front 25

France Telecom

Back 25

• There were significant differences in use, technical features, performance and price as between high-speed and low-speed internet access.
• This meant that there was an insufficient degree of substitutability between the two services
• The Commission had correctly defined the relevant market as that of high-speed internet access for residential customers in France.
  
• Where a company providing internet access services had more than 8x the market share of its main competitor and other advantages it occupied a dominant position in the market
• It had taken part in predatory pricing contrary to Art 102 by aiming its pricing at its competitors

Hint 25

Factors in determining the product market

Dominance

Predatory pricing

Front 26

Garden Cottage v Milk Marketing Board

Back 26

Lord Diplock: therights conferred by Article 101 are without further enactment to be given legaleffect in the United Kingdom and enforced accordingly.

Hint 26

Applicability of Art 101 in the UK

Front 27

Hofner & Elser v Macrotron

Back 27

The concept of an undertakingcomprises every entity engaged in economic activity, regardless of the legal status of the entity, and the way in which it is financed. , including the Federal Employment Office

Hint 27

Definition of undertaking

Front 28

IMS Health v NDC Health

Back 28

A refusal togrant a copyright license by a dominant undertaking may not, in itself, beabuse.

The following 3 conditions must allbe met for abuse to occur:

1) the refusal prevented theemergence of a new product for which there was demand

2) refusal was unjustified

3) refusal would excludecompetition on a secondary market.

Hint 28

Refusal to grant a copyright license by a dominant undertaking

Front 29

Intel fines

Back 29

Imposition of Euro 1.06 billion foranticompetitive rebates and payments to distributors to delay launch of rivalproducts

Hint 29

Fines

Front 30

‘Magill’/ Radio Telefis Eireann v Commission

Back 30

• Leading case related to abusiveuse of IP
  
• Broadcasters refused to license copyrighted TV listings more than 2 days in advance
• Commission found that therefusal of the broadcasters was an abuse under Art 102.
  
• ECJ upheld that broadcasters did enjoy a defacto monopoly which had been abused, as there was no justification forrefusal and this action excluded competition from the market.
  

Hint 30

Refusal to license copyright/ abuse of dominance

Front 31

Metro Grossmarkte v Commission

Back 31

TBC

Front 32

Microsoft cases esp [2007]

Back 32

Microsoft held a dominantposition on the OS market

Accused of

(i) tying WindowsMedia Player to Windows 2000 OS; and

(ii) non-disclosure of interoperabilityinformation.

For tying to be unlawful:

1. the tying andtied products should be separate;

2. the undertakingimposing the tie is dominant in the market for the tying product;

3. customers aredenied the chance to obtain the tying product without the tied product; and

4. competition isforeclosed.

(ii) The CFI held that the 3conditions outlined in IMS Health (see above) for finding abuse had been met,and there was no objective justification for the refusal to supplyinteroperability information.

Hint 32

Abuse of dominance

Four factors for tying to be unlawful

Front 33

Moosehead v Whitbread

Back 33

TM must be ancillary to tech know how not vice versa

Hint 33

TM licensing

Front 34

SAT Fluggesellschaft v Eurocontrol

Back 34

Were Eurocontrol an Undertaking?

• Fundedby levies on users.
  
• Acted as asupra-national public body with clear social not commercial purpose.
  
• The collection of route charges was inseparable from its other activities.
  

Held not to be an undertaking

Hint 34

Undertakings and public bodies

Front 35

TetraPak I [1988] v Commission

Back 35

Tetra abused its dominant position by the acquisition of the exclusive licence which had the effect of strengthening its already dominant position, further weakening existing competition and rendering even more difficult the entry of any new competition

Hint 35

Abuse of dominant position -exclusionary

Front 36

Tetrapak II

Back 36

The Commission found that T was abusing its dominant position in the aseptic market in breach Art 102 by tying in sales of non-aseptic filling machines to carton sales and setting predatory prices for cartons and non-aseptic machines.

Hint 36

Abuse of dominant position -exploitatative

Front 37

Viho Europe v Commission

Back 37

A parent company and 100% owned subsidiary form part of a single economic entity, if the subsidiaries do not enjoy true autonomy.

Upshot is that agreements may fall outside of Art 101(1)

Front 38

Akzo Nobel v Commission (Undertakings)

Back 38

Rebuttable presumption of decisive influence where parent has a majority/sole shareholding.

BUT even if 100% owned, it is necessary that parent company can AND IN FACT DOES exercise decisive influence over subsidiary.

Upshot is that parent company can be liable for actions of subsidiary

Front 39

MOTOE

Back 39

Undertakings

The classification of activities, whether economic or not, should be carried separately for each activity.

E.g. greek motocross association was an undertaking when arranging motocross competition events but not when assessing safety.

Front 40

Reuters/ BASF

Back 40

Can be an individual, such as a sole inventor

Front 41

Pavlov

Back 41

Any offering of goods and services on a market is typically considered to be an economic activity

Front 42

Wouters

Back 42

Professionals such as members of a Bar are undertakings. They therefore belong to an association of undertakings.

Art 101 doesn't concern

(i) spheres outside of economic activity nor

(ii) the exercise of powers of a public authority.

Front 43

Erauw­ Jacquery v LaHesbigonne (1988)

Back 43

Prohibition on the sale or export of basic seeds not withinArticle 101 since considerable investment had been made in developing the basic seed.

Court had to strike balance between the scale of research and investment into the technology and the restriction of competition. ­

• Export ban in relation to basic seeds do not infringecompetition law. ­
  
• Plant breeder is entitled to reserve the propagation of basic seeds to institutions approved by him and an export ban is objectively justified in order to protect his right. ­
  
• The provision on a minimum price had its object and effect the restriction of competition IF agreement had an effect on trade between member states to an appreciable degree.