Term
| Why is Article 101(3) important? |
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Definition
| Some agreements may have anti and pro competitive elements. If overall the pro competitive element is stronger than the anti competitive element, 101(3) may provide an exemption |
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Term
| Before Regulation 1/2003 (the modernisation regulation), how were exemptions from Art101(1) dealt with? |
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Definition
| The Commission was exclusively responsible for granting 101(3) exemptions. |
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Term
| What role did the EU courts play pre- regulation 1/2003? |
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Definition
| The courts technically didn't have the power to grant exemptions, instead, they could only review/determine whether agreements infringed Art 101(1). HOWEVER, by using the American concept of 'Rule of Reason', the courts were in effect able to grant exemptions... |
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Term
| How did the EU courts grant 101(1) exemptions pre-regulation 1/2003 |
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Definition
| Using the Rule of Reason approach. Although the technically couldn't grant exemptions. They would consider the purpose of 101(1), and from that they would determine whether an agreement = anti/pro competitive. Though technically not an exemption, the courts didn't engage with 101(3), however they could determine whether = breach/non-breach of purpose of 101(1). |
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Term
| How did the EU courts apply the Rule of Reason approach in the case of STM? |
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Definition
STM
Case concerned a contract granting exclusive rights to sell heavy machinery in France.
Court held that a term in a contract conferring exclusivity on a distributor mi9ght not infringe art 101(1) here it seemed to be really necessary for the penetration of a new area by an undertaking... therefore, agreement's object/effect did not = restriction of competition.
Instead, as it allowed a new market to be broken in to, and if the agreement wasn't allowed, it may stutter the birth/growth of that market in France
Pro-cometitive elements were found to outweigh any anti-competitive elements. |
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Term
| Which two cases are examples of the EU courts applying the Rule of Reason approach? |
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Definition
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Term
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Definition
EXAMPLE OF EU COURTS USING RULE OF REASON APPROACH
Pronuptia had a franchise agreement with a wedding dress company
German court asked the ECJ whether the franchise agreement infringed Art101(1)
Court held that franchising = a business method which promotes competition as it helps create small businesses + increases consumer choice.
Court recognised that without certain anti-competitive clauses in the contract, the franchisor would probably not be willing to enter in to such an agreement. |
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Term
| In what ways does regulation 1/2003 substantially alter the way in which Articles 101(1) and 101(3) operate? |
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Definition
1)individual exemptions are no longer available / required
2) Undertakings must themselves decide whether they are in breach of Art 101(1)
3) Undertakings must themselves decide whether they fall within Art 101(3)
4) If the decision of the Undertaking's is challenged (by a competitor / Commission / NCA), the Commission / NCA / courts may grant an exemption under 101(3) |
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Term
| What is the current position w.r.t agreements which contain pro-anti- competitive elements? |
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Definition
| It is unclear how the courts will deal with them... they will either apply the Rule of Reason approach, or they will use their newly acquired (1/2003) powers under 101(3) |
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Term
| What is the lecturer's prediction w.r.t to which method will be used where one undertaking has alleged that the agreement of another undertaking infringes 101(1) |
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Definition
| The Rule of Reason approach - as the burden of proof lies on the complainant |
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Term
| What is the lecturer's prediction w.r.t which method will be used there the Commission / an NCA alleges an undertaking's agreement infringes 101(1) |
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Definition
| The 101(3) approach - as the burden of proof lies on the undertaking |
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