Which of the Following Will Be Regarded As a Concerted Practice Within the Meaning of Article

Chapter 27

ARTICLE 101 TFEU

Question 1

Which of the following will be regarded as a concerted practice within the meaning of Article 101 TFEU?

a. The conclusion of a franchising contract which has appreciable anti-competitive effect on competition within the internal market

b. The adoption of a recommendation by a trade association stating that if any of its members fails to adopt target prices recommended by the association, such member will be expelled from the association. This being in circumstances where the expelled member will, as a consequence, be unable to sell its products within the national territory.

c. The participation of managing directors of competing undertakings in a meeting during which the intended pricing policy and other issues relating to the production and distribution of the relevant products are discussed.

a. This is an incorrect answer. A franchising contract which has an appreciable anti-competitive effect on competition within the internal market is not a concerted practice. It is an example of an agreement prohibited under Article 101 TFEU. In Joined Cases 56 and 58/64 ÉtablissementsConstenS.à.R.L. and Grundig-Verkaufs-GmbH, the ECJ held that vertical agreements, (i.e. agreements entered into by two or more undertakings which operate at different levels of the production/distribution chain and thus do not compete with each other) are also within the scope of Article 101 TFEU.

b. This is an incorrect answer. A recommendation which is binding on members of an association will amount to a decision of an association prohibited under Article 101 TFEU. In Case 8/72 Vereeniging van Cementhandellaren, the ECJ held that even a non-binding recommendation would amount to a decision in so far as its acceptance by members of the relevant association actually influenced their conduct on the market.

c. This is the correct answer.There is a presumption that when an undertaking participates in a meeting during which its competitor discloses its future policy regarding the relevant market, that undertaking takes account of such information for the purpose of determining its conduct on the market. In Cimenteriesthe General Court held that “a concerted practice implies, besides undertakings' concerting together, conduct on the market pursuant to those collusive practices, and a relationship of cause and effect between the two”

Question 2

One of the following courses of conduct on the part of the dealer is likely to be in breach of Article 101 TFEU. Which is it?

a. A dealer, subsequent to an order issued to him by a manufacturer not to sell to customers in Member States where the prices charged to customers for the relevant product are high as compared to prices in the place where he is established, neither takes any steps which indicate that he intends to comply with the order nor does anything which indicates his intention to ignore it.

b A dealer, subsequent to an order issued to him by a manufacturer not to sell to customers in Member States where the prices charged to customers for the relevant product are high as compared to prices in the place where he is established, continues selling the relevant products in those Member States.

c. A dealer, subsequent to an order issued to him by a manufacturer not to sell to customers in Member States where the prices charged to customers for the relevant product are high as compared to prices in the place where he is established, complies with the order.

a. This is an incorrect answer. In Case T-41/96 Bayer AG, the General Court stated that unilateral behaviour of an undertaking would be considered as being an agreement only if a concurrence of wills of at least two parties could be established. The mere existence of a dealership agreement and a measure imposed unilaterally does not suffice. The Commission must establish to the requisite legal standard that such a measure has been expressly or implicitly acquiesced by the other party. When a dealer neither takes any steps which indicate that he intends to comply with the order nor does anything which indicates his intention to ignore it, he does not expressly or tacitly acquiesce to the new policy of the manufacturer.

b. This is an incorrect answer. When a dealer acts contrary to the order of a manufacturer he expressly refuses to acquiesce the new policy of the manufacturer.

c. This is the correct answer. When a dealer stops selling the relevant product he complies with the order of a manufacture. Such conduct constitutes proof of express acquiescence of the new policy adopted by the manufacturer.

Question 3

Which of the following clauses will be regarded under Regulation 330/2010 as a hardcore restriction on competition within the internal market?

a. A clause fixing a minimum resale price for the relevant product

b. A clause fixing a maximum resale price for the relevant product

c. A clause recommending a resale price for the relevant product.

a. This is the correct answer. A clause fixing a minimum resale price for the relevant product is prohibited under Article 4 (a) of Regulation 330/2010.

b. This is an incorrect answer. A clause fixing a maximum resale price for the relevant product is lawful provided, it does not, in practice, amount to a fixed, or a minimum, resale price.

c. This is an incorrect answer. A clause recommending a resale price for the relevant product is lawful provided, it does not, in practice, amount to a fixed, or a minimum, resale price.