Competition between companies, governments and states within and across the global trading areas1 has become a vital part in this new world of less political and economical boundaries. Competition law therefore has to regulate the market powers of those who participate in the global exchange of goods and services. “There are now at least 80 systems of competition law in the world, in all continents and in all types of economies; many others are in contemplation.[...]”2. It has a substantial impact upon the outline of agreements.
With Articles 81 and 82 of the EEC Treaty EU jurisprudence and the legislative bodies of the Member States (MMS) have a basis to work on this topic of immense importance. Ignoring the competition rules not seldom lead to large fines being levied by the European Commission (in July 1991 Tetra Pak was fined because of competition law infringement with a record sum of ₤52mn)3. The aim of this essay is to briefly outline the scope of EU´s competition policy and laws and to give an insight into both the Agreements of Minor Importance (“de Minimis”) and the impact of Competition Law on the topic of parallel (grey) imports. The latter is examined on a case study given.
The basis of this essay consists of secondary literature taken from books, treaties, articles, notices or webpages. A full bibliography can be found at the end of the main part.
Table of Contents
1. Introduction
2. Competition Law – A Brief Outline
2.1. The Treaty Articles 81 (85) and 82 (86)
2.2. Agreements of Minor Importance – The de Minimis principle
2.2.1. The “New Notice” C 368/13
2.2.2. The Impact on the Effectiveness of Competition Policy Intervention
3. Weltbummel AG and Bouncing Balls Ltd
3.1. The Case – Their Action
3.2. The Legal Assessment
3.3. The Outcome – Worst Case Scenario
4. Conclusion
Objectives and Thematic Focus
This assignment examines the scope and application of European Union competition law, focusing specifically on the interpretation of Articles 81 and 82 of the EC Treaty. The central research question explores how "Agreements of Minor Importance" (de Minimis principle) function within the market and investigates the legal repercussions of anti-competitive practices, such as parallel import restrictions, through a detailed case study analysis of Weltbummel AG and Bouncing Balls Ltd.
- Theoretical overview of EU competition policy and Treaty articles 81 and 82.
- Analysis of the "de Minimis" principle and the impact of the 2001 "New Notice" (C 368/13).
- Evaluation of restrictive practices concerning parallel trade and territorial protection.
- Case study application regarding illegal concerted practices and price-fixing.
- Assessment of potential legal outcomes and regulatory sanctions for non-compliance.
Excerpt from the Book
3.1. The Case – Their Action
BBL uses Weltbummel as exclusive agent to distribute and market their products. On the basis on the available information it is to consider that BBL and Weltbummel actively erected barriers against parallel imports of their products within (and outside) the Community.
BBL has with its exclusive distributors introduced and set up series of mechanisms aimed at implementing barriers against parallel import. Those mechanisms consisted of systematic monitoring of the movements of BBL´s goods including color coding, printing serial numbers and the investigation of instances of parallel imports. This was done in the purpose of tracing back the origin of the products which was found in internal documents either. In addition, the reporting and investigating of parallel imports in oder to identify them and cut off suppliers is a result of concerted practice between BBL and its distributor and reinforces the ban on parallel exports which was done in concert (and not as unilateral action) with its competitiors and was part of a distribution or sales agreement. Those barriers had as their direct object the restriction of trade between MMS.
The effect of hindering others in exercising parallel trade is apparently to maintain price differentials between MMS. Furthermore, the notification of parallel imports and the notification of their competitors´ prices aimed at the goal of hamonising prices within a territory with the intention of doing it with any other competitor if this was necessary.
They furthermore set up a distribution system for total territorial protection and for aiming at excluding parallel trade. This was stated in an unwritten condition of sale prohibiting the distributor from exporting or supplying to any company likely to export.
Summary of Chapters
1. Introduction: This chapter introduces the global relevance of competition law and defines the essay's goal to explore EU competition policy, specifically de Minimis agreements and parallel imports.
2. Competition Law – A Brief Outline: This chapter provides a legal foundation by discussing Articles 81 and 82 and analyzing the de Minimis principle, including the regulatory shifts introduced by the New Notice C 368/13.
3. Weltbummel AG and Bouncing Balls Ltd: This chapter applies theoretical concepts to a practical case study, identifying illegal restrictive practices and assessing potential legal outcomes for the involved companies.
4. Conclusion: This chapter summarizes the findings, reiterating that competitive markets are essential for welfare and that unauthorized barriers to trade result in inevitable intervention by authorities.
Keywords
EU Competition Law, Article 81, Article 82, de Minimis, Parallel Imports, Territorial Protection, European Commission, Concerted Practice, Antitrust, Market Share, Trade Restrictions, EC Treaty, Economic Welfare, Compliance, Undertaking.
Frequently Asked Questions
What is the fundamental focus of this assignment?
The assignment fundamentally addresses the regulatory framework of EU competition law, specifically how the European Commission manages market behavior to ensure fair competition within the Common Market.
Which key areas are examined in the theoretical section?
The core themes include the prohibition of anti-competitive agreements under Article 81, the control of dominant firms under Article 82, and the implementation of the de Minimis principle.
What is the primary objective of the research?
The objective is to outline the scope of EU competition policy while analyzing how specific regulatory notices provide guidance on when agreements might fall outside the scope of Article 81 due to insignificant market impact.
Which methodology is employed in this study?
The work utilizes a methodology of secondary literature analysis—reviewing treaties, official Commission notices, and relevant case law—combined with a practical case study application to assess real-world legal breaches.
What does the main body cover?
The main body covers the legal definitions and thresholds of competition law, followed by a critical case study of Weltbummel AG and Bouncing Balls Ltd, focusing on their restrictive distribution practices.
Which keywords best characterize this research?
Key terms include Competition Law, Article 81, de Minimis, Parallel Imports, Concerted Practice, and Territorial Protection.
How does the "New Notice" C 368/13 specifically impact competition assessment?
The New Notice raises quantitative market share thresholds (10% for horizontal and 15% for vertical agreements) to clarify which agreements do not appreciably restrict competition, thereby reducing the compliance burden for firms.
What are the legal implications for the parties in the Weltbummel case?
The parties face potential fines for infringing Article 81, as their concerted efforts to monitor imports and fix prices are classified as hardcore restrictions that are strictly prohibited under EU law.
- Quote paper
- Thorben Schenk (Author), 2004, EU Competition Law and Policy, Munich, GRIN Verlag, https://www.grin.com/document/28469
