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Implementing EU competition rules: application of Articles 101 and 102 of the TFEU

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Implementing EU competition rules: application of Articles 101 and 102 of the TFEU

In the interest of both consumers and businesses, the European Union (EU) has rules to outlaw cartels that fix prices or carve up markets between competitors. The EU also seeks to prevent firms from abusing their dominant position in a market, for example by charging unfair prices or limiting production.

ACT

Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.

SUMMARY

In the interest of both consumers and businesses, the European Union (EU) has rules to outlaw cartels that fix prices or carve up markets between competitors. The EU also seeks to prevent firms from abusing their dominant position in a market, for example by charging unfair prices or limiting production.

WHAT DOES THE REGULATION DO?

It implements the EU competition rules laid down by Article 101 (concerted practices that restrict competition) and Article 102 (abuse of dominant position) of the Treaty on the Functioning of the European Union (TFEU) (formerly Articles 81 and 82 of the treaty establishing the European Community (EC Treaty). It introduced rules that changed, above all, the enforcement aspects of EU competition policy.

It allows for competition rules previously applied by the European Commission to be enforced on a decentralised basis by EU countries’ competition authorities. It thus enhanced the role of national antitrust authorities and courts in implementing EU competition law. This allows the Commission to focus its resources on enforcing the most serious competition infringements with a cross-border dimension.

KEY POINTS

Article 101 (TFEU) procedures - antitrust

Cases to investigate anti-competitive agreements (e.g. cartels) are triggered by:

a complaint (e.g. from a competitor);

the initiative of the competition authority (national authority or European Commission);

an application under a leniency programme (where a participant in a cartel may avoid a fine or have it reduced if it provides information on the cartel).

Where the European Commission launches an investigation, it has wide-ranging powers. These include the right to request information from companies but also to enter companies’ premises, seize their records and interrogate their representatives.

If, on the basis of its initial investigations, the Commission decides to pursue an in-depth investigation, it sets out a statement of objections (SO) which it sends to the companies in question.

Companies under investigation may access the Commission’s file and respond to the SO. They may also request a hearing. If, after this stage, the Commission is still convinced there is an infringement, it may issue an infringement decision which may include the imposition of fines on the parties.

The Commission may instead decide to adopt a commitment decision where no fines are imposed. Here, the parties make an undertaking to address the Commission’s competition concerns, normally for a given period. If they breach this commitment, they may be fined.

Parties may appeal Commission decisions at the General Court.

Under Directive 2014/104/EU, victims of cartels or antitrust violations may be compensated for damages.

Article 102 (TFEU) procedures - abuse of dominance

A national competition authority or the Commission may open an investigation on its own initiative or following a complaint.

The key first step in such cases is to assess whether the firm involved is ‘dominant’. This involves defining its market both in terms of the product(s) it supplies and the geographic area in which they are sold. As a general rule, if the market share is under 40 %, it is unlikely to be dominant.

Other factors are also taken into account such as whether there are barriers preventing new entrants to the market or the degree to which the firm under investigation is involved at different levels of the supply chain (known as ‘vertical integration’).

The next step is to find out whether this dominant position is being abused due to practices such as predatory pricing (prices that undercut competitors), insisting that the firm is the exclusive supplier, etc.

The competition authorities have the same investigation powers as for Article 101 procedures. Aspects such as rights of defence, the system of SOs, commitment decisions, fines and compensation are also identical.

Lastly, a European competition network consisting of the national competition authorities and the Commission allows them to exchange information, including confidential information, to help them enforce violations of the competition rules.

FROM WHEN DOES THE REGULATION APPLY?

From 24 January 2003.

For more information, see the antitrust pages on the European Commission’s website.

REFERENCES

Act

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EC) No 1/2003

24.1.2003

-

OJ L 1 of 4.1.2003, pp. 1-25

Amending act(s)

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EC) No 411/2004

9.3.2004

-

OJ L 68 of 6.3.2004, pp. 1-2

Regulation (EC) No 1419/2006

18.10.2006

-

OJ L 269 of 28.9.2006, pp. 1-3

Regulation (EC) No 169/2009

25.3.2009

-

OJ L 61 of 5.3.2009, pp. 1-5

Regulation (EC) No 246/2009

14.4.2009

-

OJ L 79 of 25.3.2009, pp. 1-4

Regulation (EC) No 487/2009

1.7.2009

-

OJ L 148 of 11.6.2009, pp. 1-4

Successive amendments and corrections to Regulation (EC) No 1/2003 have been incorporated into the basic text. This consolidated version is for reference only.

RELATED ACTS

Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (Official Journal L 123 of 27.4.2004, pp. 18-24). See consolidated version.

Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union Text with EEA relevance (Official Journal L 349 of 5.12.2014, pp. 1-19).

Last updated: 31.07.2015

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