LPC NOTES
[EU COMPETITION RULES]
(2019-2020)
, LPC NOTES ON EU COMPETITION RULES
LPC Notes ON EU Competition Rules......................................................................................2
1. Introduction................................................................................................................ 3
2. Cartels..................................................................................................................... 10
3. Commercial cooperation generally....................................................................................12
4. Horizontal cooperation.................................................................................................14
5. Vertical cooperation.................................................................................................... 17
6. Intellectual property licensing.........................................................................................18
7. Abuse of dominance..................................................................................................... 19
8. Merger control........................................................................................................... 22
9. State aid control......................................................................................................... 23
, 1. Introduction
1.1 This publication provides a general overview of the competition rules applicable to
companies carrying on business in Europe or whose business conduct may have effects in
Europe.
It identifies the broad areas where there is scope for investigations or legal proceedings under
the competition rules.1
1.2 The Treaty on the Functioning of the European Union (TFEU) provides for a single internal market
with free movement of goods and services throughout the European Union (EU). To achieve this, it
includes rules to ensure that competition within the EU is not restricted or distorted inter alia by
cartels or anti-competitive agreements, abuses of market power, certain mergers and acquisitions
or unfair State aid. These European competition rules have the force of law throughout the
European Economic Area (EEA). They are enforced by the European Commission and, in certain
circumstances, by the Member States’ national competition authorities (NCAs). The countries in the
EEA each also have their own domestic competition rules that tend to be modelled on the EU rules.2
The general antitrust rules
1.3 The EU’s general antitrust rules are set out at Articles 101 and 102 TFEU. Article 101(1) prohibits
any agreement or concerted practice – formal or informal, written or unwritten – that is made between
two or more “undertakings” (independent businesses) that may affect trade between Member States and
that has the object or effect of preventing, restricting or distorting competition. It catches:
• secret price-fixing or market-sharing cartels (considered in Chapter 2 of this publication). These
are viewed as serious “hardcore” infringements (per se violations of the antitrust rules, to use US
parlance), which will almost always be condemned (and will not meet the exemption criteria of
Article 101(3)); and
• other agreements between businesses that have the object or effect of restricting competition,
for example, by including exclusive dealing provisions or territorial restrictions. Depending
on the surrounding circumstances (and provided they are properly drafted and implemented)
many business agreements of this type may nevertheless be compatible with the competition
rules – either because they fall outside the scope of the Article 101(1) prohibition or because
they meet the exemption criteria of Article 101(3) (see Chapter 3 of this publication for general
observations, Chapters 4, 5 and 6 for more specific observations on “horizontal” agreements,
“vertical” agreements and intellectual property licensing and Chapter 8 for observations on
strategic alliances and joint ventures).
1.4 Article 102 makes it illegal for dominant companies to abuse their market power in a way that may
affect trade between Member States (considered in Chapter 7 of this publication). Although these
special rules on unilateral market behaviour and conduct only apply to undertakings enjoying a
dominant position on a relevant market, the market can be defined narrowly for these purposes.
1
For more detailed guidance on how the competition rules are applied, see the various Slaughter and May publications referred to elsewhere in this
publication.
2
The current 28 EU Member States are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia,
Spain, Sweden and the United Kingdom. By virtue of the 1992 EEA Agreement, the EU competition rules also extend to three other countries:
Iceland, Liechtenstein and Norway (sometimes referred to as the EFTA contracting states). Together, the EU Member States and EFTA
contracting states make up the EEA.
/ An overview of the EU competition rules 1
[EU COMPETITION RULES]
(2019-2020)
, LPC NOTES ON EU COMPETITION RULES
LPC Notes ON EU Competition Rules......................................................................................2
1. Introduction................................................................................................................ 3
2. Cartels..................................................................................................................... 10
3. Commercial cooperation generally....................................................................................12
4. Horizontal cooperation.................................................................................................14
5. Vertical cooperation.................................................................................................... 17
6. Intellectual property licensing.........................................................................................18
7. Abuse of dominance..................................................................................................... 19
8. Merger control........................................................................................................... 22
9. State aid control......................................................................................................... 23
, 1. Introduction
1.1 This publication provides a general overview of the competition rules applicable to
companies carrying on business in Europe or whose business conduct may have effects in
Europe.
It identifies the broad areas where there is scope for investigations or legal proceedings under
the competition rules.1
1.2 The Treaty on the Functioning of the European Union (TFEU) provides for a single internal market
with free movement of goods and services throughout the European Union (EU). To achieve this, it
includes rules to ensure that competition within the EU is not restricted or distorted inter alia by
cartels or anti-competitive agreements, abuses of market power, certain mergers and acquisitions
or unfair State aid. These European competition rules have the force of law throughout the
European Economic Area (EEA). They are enforced by the European Commission and, in certain
circumstances, by the Member States’ national competition authorities (NCAs). The countries in the
EEA each also have their own domestic competition rules that tend to be modelled on the EU rules.2
The general antitrust rules
1.3 The EU’s general antitrust rules are set out at Articles 101 and 102 TFEU. Article 101(1) prohibits
any agreement or concerted practice – formal or informal, written or unwritten – that is made between
two or more “undertakings” (independent businesses) that may affect trade between Member States and
that has the object or effect of preventing, restricting or distorting competition. It catches:
• secret price-fixing or market-sharing cartels (considered in Chapter 2 of this publication). These
are viewed as serious “hardcore” infringements (per se violations of the antitrust rules, to use US
parlance), which will almost always be condemned (and will not meet the exemption criteria of
Article 101(3)); and
• other agreements between businesses that have the object or effect of restricting competition,
for example, by including exclusive dealing provisions or territorial restrictions. Depending
on the surrounding circumstances (and provided they are properly drafted and implemented)
many business agreements of this type may nevertheless be compatible with the competition
rules – either because they fall outside the scope of the Article 101(1) prohibition or because
they meet the exemption criteria of Article 101(3) (see Chapter 3 of this publication for general
observations, Chapters 4, 5 and 6 for more specific observations on “horizontal” agreements,
“vertical” agreements and intellectual property licensing and Chapter 8 for observations on
strategic alliances and joint ventures).
1.4 Article 102 makes it illegal for dominant companies to abuse their market power in a way that may
affect trade between Member States (considered in Chapter 7 of this publication). Although these
special rules on unilateral market behaviour and conduct only apply to undertakings enjoying a
dominant position on a relevant market, the market can be defined narrowly for these purposes.
1
For more detailed guidance on how the competition rules are applied, see the various Slaughter and May publications referred to elsewhere in this
publication.
2
The current 28 EU Member States are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia,
Spain, Sweden and the United Kingdom. By virtue of the 1992 EEA Agreement, the EU competition rules also extend to three other countries:
Iceland, Liechtenstein and Norway (sometimes referred to as the EFTA contracting states). Together, the EU Member States and EFTA
contracting states make up the EEA.
/ An overview of the EU competition rules 1
