Today’s highly competitive environment is characterised by an internationalisation of business activities. More and more small and medium enterprises take the first step and operate globally beyond national boundaries. Huge companies aim to concentrate activities due to high cost pressures etc. Mergers and Acquisition of “Global Players” become more and more important. In such an environment, a sophisticated competition law is indispensable.
Competition law ensures that economic operators do not “prevent, distort or restrict competition” by running their businesses. Moreover, it inhibits monopolists in abusing their dominant market position in order to protect potential competitors and / or customers. According to Craig / de Burca, competition law has three objectives. It should (1) increase the efficiency, (2) protect consumers and smaller companies and (3) continue the creation of a single European market.
Chapter 2 of this assignment addresses Question 1 and deals with Treaty Articles which are used to stop undertakings hindering parallel trade. Moreover, examples of the application and interpretation of the provisions by the European Court of Justice (ECJ) are given. Chapter 3 answers Question 2 and deals with a case of two companies which are investigated for infringements by the European Commission. At the end, a possible decision of the Commission is anticipated.
Table of Contents
1 Introduction
2 Competition Law
2.1 Definition of parallel imports
2.2 Relevant EC Law
2.2.1 The Treaty Articles
2.2.2 The ‘de Minimis’ Principle
2.3 Interpretation and application of Treaty Articles
3 Weltbummel AG and Bouncy Ball Ltd.
3.1 The Case
3.2 Application of Article 81 to the case Weltbummel / BBL
3.3 The possible outcome
4 Conclusion
Objectives and Research Focus
This assignment examines the legal framework regarding competition policy within the European Community, specifically focusing on the regulation of parallel trade. The primary objective is to analyze how Treaty Articles, particularly Article 81, are applied to prevent undertakings from restricting competition and maintaining isolated national markets.
- The definition and economic impact of parallel imports.
- The scope and application of EC Treaty Articles 28, 30, 81, and 82.
- The interpretation of competition law by the European Court of Justice (ECJ).
- A detailed case study involving Bouncy Ball Ltd. and Weltbummel AG concerning infringements of competition law.
- The role of block exemptions and the 'de Minimis' principle in distribution agreements.
Excerpt from the Book
3.1 The Case
The English undertaking Bouncy Ball Ltd (BBL) manufactures and markets racket ball balls, handball balls and general “playballs”. The products are distributed within the EEA and outside the EEA by Weltbummel A.G., a German undertaking which acts as an exclusive agent.
BBL uses several mechanisms in order to monitor the movements of their products within the common market. Examples of these mechanisms are colour coding of packaging and serial number on the packaging. BBL wants to be informed about the prices of their competitors products. Further, the agents have to notify BBL if there are products available within their assigned territory which have not been put on the market by the agent. In such cases, BBL traces the origin of those products and withholds supplies from the undertaking which has distributed the goods outside its territory without the knowledge of BBL.
Summary of Chapters
1 Introduction: This chapter outlines the increasing internationalization of business and the essential role of competition law in protecting market efficiency and the single European market.
2 Competition Law: This section provides the theoretical background, defining parallel imports and detailing the relevant EC Treaty Articles (28, 30, 81, 82) and the 'de Minimis' principle.
3 Weltbummel AG and Bouncy Ball Ltd.: This chapter applies the legal theory to a specific corporate case, analyzing alleged infringements regarding monitoring mechanisms, price fixing, and distribution agreements.
4 Conclusion: The final section summarizes that unrestricted competition and the prevention of barriers to parallel trade are fundamental pillars for prosperity within the common market.
Keywords
Competition Law, Parallel Trade, European Community, Article 81, Exclusive Distribution Agreement, Bouncy Ball Ltd, Weltbummel AG, European Commission, European Court of Justice, Treaty Articles, Market Isolation, Price Fixing, Block Exemption, Competition Policy, Member States
Frequently Asked Questions
What is the core subject of this assignment?
The assignment explores European Community Business Law, with a specific focus on competition policy and the legal challenges surrounding parallel trade.
What are the central themes of the work?
The central themes include the interpretation of Treaty Articles by the ECJ, the prevention of market distortion through trade restrictions, and the regulatory oversight of distribution agreements.
What is the primary research goal?
The goal is to determine how EU competition law, specifically Article 81, restricts anti-competitive practices like export bans and price fixing in order to facilitate a unified European market.
Which scientific methods are applied?
The author utilizes a combination of literature review, legal analysis of Treaty Articles, and the application of established case law to a hypothetical commercial scenario.
What content is covered in the main body?
The main body defines parallel imports, details the legal provisions prohibiting trade barriers, and provides a case analysis of Bouncy Ball Ltd.’s distribution strategies and their compatibility with EC law.
Which keywords characterize this document?
Key terms include Parallel Trade, Article 81, Competition Policy, European Court of Justice, and Exclusive Distribution Agreement.
How does the author evaluate the monitoring mechanisms used by BBL?
The author identifies that BBL’s use of serial numbers and color-coded packaging constitutes an anti-competitive practice aimed at identifying and preventing parallel imports, which infringes on Article 81.
Why are block exemptions not applicable to the case of BBL and Weltbummel?
The author argues that the agreements contain "hardcore" restrictions, such as territorial protection and export bans, which disqualify them from the exemptions provided by the Block Exemption Regulation.
- Citation du texte
- Matthias Meier (Auteur), 2006, Competition Policy and Parallel Trade, Munich, GRIN Verlag, https://www.grin.com/document/52381
