Article 101: Anticompetitive Agreements
Article 101 TFEU:
Prohibits anti-competitive agreements: ‘agreements, association decisions or concerted practices, between undertakings,
which has the object or effect of preventing, restricting or distorting competition in the market, and may affect trade between
member states.’
Examples (Article 101 (1) (a)-(e)): fixing prices, limiting or controlling production, sharing of markets or supply sources,
applying dissimilar conditions to equivalent transactions, and forcing parties to take on additional obligations in contracts
(not an exhaustive list)
1) Is there an agreement between undertaking?
Agreement between undertakings
• Covers all types of commercial agreements:
◦ Usually in writing
◦ Can also be verbal and not binding e.g. gentleman’s agreement (Quinine Cartel)
◦ Must be two undertakings colluding or one acting anti-competitively with the other knowing, does not cover
unilateral behaviour by a single undertaking
◦ Includes horizontal (same level of production) and vertical (between levels of production) -> *make sure to clarify
what horizontal/vertical means
‣ Constant v Grundig: a vertical agreement between manufacturer and supplier containing an exclusive
distribution clause, a clause that prevented manufacturer from supplying customers directly and a ban on
parallel imports and exports (sales to people in other countries) was in breach of Art. 101 -> core note was for
exclusive distributorships to be legal they must not create absolute territorial protection
• Concerted practices: deliberate coordination of behaviour with another undertaking that goes further than merely
parallel conduct
◦ Dyestuffs case: price increases were announced in advance by an undertaking and then followed simultaneously
by others, therefore concerted practice -> test: substituted practical cooperation for the risks of competition.
◦ Woodpulp case: the woodpulp case was a oligopoly (small number of dominant companies) and therefore co-
ordinated pricing strategies could be explained by factors other than concerted practices
◦ THEREFORE: parallel conduct is an indicator of concerted practices, but must always distinguish the market
type because oligopolies will require more evidence than parallel pricing to prove concerted practices
• Undertakings includes:
◦ Non-profit organisations
◦ Public bodies
◦ Associations of undertakings e.g. UEFA
◦ Wide definition: any entity engaged in ‘any economic activity’ regardless of legal status or how financed (Hofner &
Elser)
2) Does the agreement infringe on competition law?
A) Is its object or effect the prevention, restriction or B) May affect trade between Member States?
distortion of competition within the market?
• Test: whether the agreement may have an influence,
• If object is established then there is no need to prove direct or indirect, actual or potential, on the pattern of
effect (Expedia Inc case) trade between MS (STM v MU)
• Object (objective test) = features of agreements which • Solely internal situations are not covered by Art. 101 =
by nature in breach of Art. 101: national issue
◦ Market devisions (e.g. bans on parallel exports or ◦ Exception: can be solely in one MS if that agreement
imports) prevents entry into the market by other EU
◦ Vertical export bans companies (Stremsel case)
◦ Price fixing • Agreements outside the EU which coordinate prices at
• STM v MU: which goods are sold into the EU count (Woodpulp)
◦ Exclusive distributorships will not breach the • Consider whether agreement in question is part of a
requirement if parallel imports are still allowed network of agreements = together may effect trade
◦ To establish effect the present market must be (Brasserie de Haecht v Wilkin)
compared to a market without the agreement in
place *if object or effect is established this is usually also
‣ Position and importance of undertakings + established, given agreement is of a sufficiently large scale
nature of the market should be considered
Article 101 TFEU:
Prohibits anti-competitive agreements: ‘agreements, association decisions or concerted practices, between undertakings,
which has the object or effect of preventing, restricting or distorting competition in the market, and may affect trade between
member states.’
Examples (Article 101 (1) (a)-(e)): fixing prices, limiting or controlling production, sharing of markets or supply sources,
applying dissimilar conditions to equivalent transactions, and forcing parties to take on additional obligations in contracts
(not an exhaustive list)
1) Is there an agreement between undertaking?
Agreement between undertakings
• Covers all types of commercial agreements:
◦ Usually in writing
◦ Can also be verbal and not binding e.g. gentleman’s agreement (Quinine Cartel)
◦ Must be two undertakings colluding or one acting anti-competitively with the other knowing, does not cover
unilateral behaviour by a single undertaking
◦ Includes horizontal (same level of production) and vertical (between levels of production) -> *make sure to clarify
what horizontal/vertical means
‣ Constant v Grundig: a vertical agreement between manufacturer and supplier containing an exclusive
distribution clause, a clause that prevented manufacturer from supplying customers directly and a ban on
parallel imports and exports (sales to people in other countries) was in breach of Art. 101 -> core note was for
exclusive distributorships to be legal they must not create absolute territorial protection
• Concerted practices: deliberate coordination of behaviour with another undertaking that goes further than merely
parallel conduct
◦ Dyestuffs case: price increases were announced in advance by an undertaking and then followed simultaneously
by others, therefore concerted practice -> test: substituted practical cooperation for the risks of competition.
◦ Woodpulp case: the woodpulp case was a oligopoly (small number of dominant companies) and therefore co-
ordinated pricing strategies could be explained by factors other than concerted practices
◦ THEREFORE: parallel conduct is an indicator of concerted practices, but must always distinguish the market
type because oligopolies will require more evidence than parallel pricing to prove concerted practices
• Undertakings includes:
◦ Non-profit organisations
◦ Public bodies
◦ Associations of undertakings e.g. UEFA
◦ Wide definition: any entity engaged in ‘any economic activity’ regardless of legal status or how financed (Hofner &
Elser)
2) Does the agreement infringe on competition law?
A) Is its object or effect the prevention, restriction or B) May affect trade between Member States?
distortion of competition within the market?
• Test: whether the agreement may have an influence,
• If object is established then there is no need to prove direct or indirect, actual or potential, on the pattern of
effect (Expedia Inc case) trade between MS (STM v MU)
• Object (objective test) = features of agreements which • Solely internal situations are not covered by Art. 101 =
by nature in breach of Art. 101: national issue
◦ Market devisions (e.g. bans on parallel exports or ◦ Exception: can be solely in one MS if that agreement
imports) prevents entry into the market by other EU
◦ Vertical export bans companies (Stremsel case)
◦ Price fixing • Agreements outside the EU which coordinate prices at
• STM v MU: which goods are sold into the EU count (Woodpulp)
◦ Exclusive distributorships will not breach the • Consider whether agreement in question is part of a
requirement if parallel imports are still allowed network of agreements = together may effect trade
◦ To establish effect the present market must be (Brasserie de Haecht v Wilkin)
compared to a market without the agreement in
place *if object or effect is established this is usually also
‣ Position and importance of undertakings + established, given agreement is of a sufficiently large scale
nature of the market should be considered
