The prohibition of cartels - Elements of a cartel
12 important questions on The prohibition of cartels - Elements of a cartel
What are the five elements of a cartel art. 101 TFEU?
- Form of collusion; agreement between undertakings, decisions by associations of undertakings and concerted praticed
- between at least two unteratking
- which may affect trade between MS
- prevention, restriction or distortion of competition
- appreciable effect
What is the term agreement in element of cartel?
- Wide interpretation by the Court
- agreements decisive
- legal bindingness not required
- causation by force or threat fits as well
What does the term decision by association of undertakings as element of cartel mean?
- In principal lawful
- with or without legal capacity
- organized in form of private or public law
- decision is overall will of Members of association
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What does concerted practice as element of cartel mean?
- Collusion that falls short of an agreement
- all exchange of information to reduce insecurity as regards the market behavior of competitiors
- coordinated behavior by undertakings
What does term undertaking mean as element of cartel?
- Autonomous determination
- functional assessment economic unit in terms of its activity (offering goods or services on certain market)
- irrelevant: legal form, ownership, financing, profit
- excluded: state bodies to exercise public authority
ECJ case C-41/90, judgement of 23 April 1991, font-styleHöfner and Elserfont-style. Question and ECJ decision.
German Federal Office for Employment as undertaking in terms of EU competition law?
ECJ:
- “every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed”
- employment service as economic activity
- employment services regularly provided by bodies of public law BUT not require
- in particular as regards placement of top managers
What does affecting trade between MS as elements of a cartel mean?
- Mere capability of having an effect
- inter-state clause normally fulfilled where untertaking from different MS participate in cartel
- also domestic cartels where
- relation to import and export
- participation of subsidiaries in other MS
- impeding market access for potential competitors from other MS
What does restraint of competition as element of a cartel mean?
- Unteraking has its object or effect the prevention, restriction or distortion of competition
- object directed to restraint of competition, effect irrelevant
- retraining effect: requirement met when no proof of intention or actually no intention.
ECJ case C-234/89, judgement of 28 Feb 1991, Delimitis. What were the facts of the case?
- Henninger Bräu leases a restaurant to Mr Delimitis
- Mr Delimitis obliged to exclusively purchase beer and non-alcoholic beverages from Henninger Bräu or its subsidiaries (minimum supply)
- termination of contract: Henninger offsets against deposit -> outstanding lease and damages, for Delimitis has not met minimum supply
- Delimitis claims nullity of agreement
ECJ case C-234/89, judgement of 28 Feb 1991, Delimitis. What was the decision of the ECJ?
Two steps assess restraining effect:
- difficult for potential competitors to access market, having regard to the economic and legal context of the agreement at issue
- significant contribution of the concrete agreement to the sealing-off effect (foreclosure) brought about by the totality of those agreements in their economic and legal context
depends on position of parties to the agreement and its duration
What does opening of the market as element of a cartel mean?
- Restriction to freedom to act may be tolerated where aim is to protect investments of sales/licence partner
- create conditions for investment
- restriction that are necessaryy for functioning of cooperation are allowed
- non-competition clause in case of company takeover
What does appreciability as elements of a cartel mean?
- Of restraint to competition as an unwritten element
- mainly quantitative terms
- horizontal agreements: if aggregate market share hel by parties to agreements does not exceed 10%
- vertical agreements: if market share held by each of the parties to agreement does not exceed 15%
- de minimis rule does not apply to by object restraints
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