FAULL & NIKPAY

THE EU LAW OF

COMPETITION

THIRD EDITION

Edited by

JONATHAN FAULL Director General, European Commission

Visiting Professor, College ofEurope, Bruges, and Kings College, London Emeritus Professor, Vrije Universiteit Brüssel

ALI NIKPAY

Partner, Gibson Dunn & Crutcher LLP Former Senior Director, UK Office ofFair Trading

Visiting Lecturer at University of Oxford

Assistant Editor

DEIRDRE TAYLOR

OfCounsel, Gibson Dunn & Crutcher LLP

OXFORD UNIVERSITY PRESS

CONTENTS—SUMMARY

List ofAbbreviations lxxv Tables of Court of Justice and the General Court ofthe European Union Cases lxxvii Tables of European Commission Decisions cxxxviii Table of National and Other Cases clxxv Table ofEU/ECTreaties clxxix Tables ofEU/EC Legislation clxxxiii Tables ofEU/EC Notices, Guidelines and Other Informal Texts ccxi Table of National Legislation ccxxxi Table of International Treaties ccxxxiii

I GENERAL PRINCIPLES

1. The Economies of Competition 3 Luc Peeperkorn and Vincent Verouden

2. The Enforcement System under Regulation 1/2003 91 Eddy De Smijter andAilsa Sinclair

3. Article 101 183 Jonathan Faidl, Lars Kjßlbye, Henning Leupold, andAliNikpay

4. Article 102 329 Miguel de la Mano, Renato Nazzini, and Hans Zenger

5. Mergers 539 Claes Bengtsson, Josep Maria Carpi Badia, andMassimiliano Kadar

6. Article 106—Exclusive or Special Rights and Other Anti-Competitive State Measures 809 Jose Luis Buendia Sierra

II SPECIFIC PRACTICES

7. Horizontal Cooperation Agreements 883 Matthew Bennett, Francisco Enrique Gonzalez Diaz, Henning Leupold, Anna Vernet, and Donncadh Woods

8. Cartels 1023 Antoine Colombani, Jindrich Kloub, andEwoud Sakkers

9. Vertical Agreements 1363 Andrei Gurin and Luc Peeperkorn

Contents—Summary

10. Intellectual Property 1443 Kevin Coates, Lars Kjolbye, and Luc Peeperkorn

III SPECIAL SECTORS

11. Financial Services 1513 Nicholas Banasevic, Stephen Ryan, and Rita Wezenbeek

12. Energy 1581 Celine Gauer and Lars Kjolbye

13. Communications (Telecoms and Internet) 1647 David Gabathuler andEduardo Martinez Rivero

14. Media 1709 KrzysztofKuik and Anthony Dautes

15. Transport 1779 Hubert de Broca, Marta Mielecka Riga, andAnatoly Subocs

16. Pharma 1869 Elarald Mische, Elena Kamilarova, and Dominik Schnichels

IV STATE AID

17. State Aid 1923 Tim Maxian Rusche, Ciaire Micheau, Henri Piffaut, andKoen Van de Casteele

Index 2033

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CONTENTS

List ofAbbreviations Tables of Court of Justice and the General Court ofthe European Union Cases Tables of European Commission Decisions Table of National and Other Cases Table ofEU/EC Treaties Tables ofEU/EC Legislation Tables ofEU/EC Notices, Guidelines and Other Informal Texts Table of National Legislation Table of International Treaties

I GENERAL PRINCIPLES

1. Hie Economics of Competition Luc Peeperkorn and Vincent Verouden A. Introduction B. Structure, Conduct, Performance

(1) Early Developments (2) The Harvard School (3) The Chicago School (4) More Recent Developments

C. Stalle Weifare Analysis of Market Power (1) Introduction (2) Basic Microeconomic Concepts

(a) Consumer Surplus (b) Production Costs (c) Short-Run Production Costs (d) Profit Maximization (e) Long-Run Production Costs (f) Economies of Scale and Minimum Efficient Scale (g) Entry Barriers (h) Contestability

(3) Perfect Competition (a) The Model (b) The Outcome

(4) Monopoly (a) The Model (b) The Outcome

(5) Oligopoly (a) Introduction (b) Game Theory (c) The Scope for Collusion Illustrated with the Prisoner's Dilemma

D. Dynamic Weifare Analysis of Market Power (1) Innovation and Weifare

lxxv lxxvii

cxxxviii clxxv

clxxix clxxxiii

ccxi ccxxxi

ccxxxiii

1.01 1.06 1.06 1.09 1.12 1.16 1.21 1.21 1.27 1.28 1.29 1.31 1.36 1.41 1.43 1.50 1.56 1.58 1.58 1.62 1.65 1.65 1.68 1.78 1.78 1.83 1.93

1.120 1.120

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(2) Different Views 1.122 (3) Some Empirical Results 1.125 (4) The 'New Economy' 1.127 (5) Some Concluding Remarks 1.133

E. Market Definition 1.134 (1) Product Market Definition 1.139

(a) Demand-Side Substitution 1.141 (b) The SSNIP Test 1.147 (c) Elasticity Concepts and the Diversion Ratio 1.153 (d) Supply-Side Substitution 1.160

(2) The Relevant Geographie Market 1.169 (a) Demand-Side Substitution 1.170 (b) Supply-Side Substitution 1.172

(3) Specific Issues in the Context of Market Definition 1.175 (a) Chains of Substitution 1.176 (b) Price Discrimination 1.178 (c) Captive Production 1.181

(4) Further Considerations 1.184 (a) Market Definition in Practice 1.184 (b) Defining the Market: Not an End in Itself 1.188

F. Market Power and Dominance 1.190 (1) Market Power 1.192

(a) Concept 1.192 (b) Identification of (Static) Market Power 1.202

(2) Dominance 1.211 (a) Single Dominance 1.212 (b) Collective Dominance 1.219

(3) Enhancing Market Power 1.225 (a) Merger with a Competitor: Unilateral vs Coordinated Effects 1.227 (b) Exclusionary Strategies 1.240

G. Empirical Methods for Market Definition and the Assessment of Market Power 1.249 (1) Analysis ofPrices and Price Movements 1.253

(a) Price Correlation Analysis 1.254 (b) Extension: Stationarity/Co-Integration 1.263

(2) Analysis of Price Elasticities of Demand 1.265 (3) Critical Loss Analysis 1.289 (4) UPP 1.295 (5) Event Analysis 1.302 (6) Assessment Methods Relating Price to Market Structure 1.306

(a) Price Concentration Analysis 1.307 (b) Direct Evaluation of Competitive Constraints 1.313

(7) Analysis of Bidding Data 1.314 (8) Merger Simulation 1.325

2. The Enforcement System under Regulation 1/2003 Eddy De Smijter andAilsa Sinclair A. Direct Application ofArticles 101 and 102 2.01

(1) Introduction 2.01

xiv

(2) The Aims and Results of the System Change 2.04 (a) Increased Application of Articles 101 and 102 at Member State Level 2.05 (b) The Commission's Focus on Enforcement 2.09

(3) Seif-assessment and Legal Certainty 2.12 (4) The Direct Effect of Articles 101 and 102 2.20 (5) Bürden and Standard of Proof 2.25

B. The Relationship Between EU Competition Law and National Competition Law 2.30 (1) Introduction 2.30 (2) Article 3(1): The Obligation toApply Articles 101 and 102 2.33

(a) ScopeofArticle3(1) 2.34 (b) Primary Functions of Article 3(1) 2.40

(3) The Convergence Rule of Article 3(2) 2.45 (4) The Legal Consequences oflnfringing Article 3(1) and (2) 2.52 (5) Article 3 and the Primacy Rule 2.55 (6) Exceptions to Article 3 2.58

(a) National Competition Laws 2.59 (b) National Laws Implementing EU Law Directives 2.66 (c) Member State Measures Covered byArticle 106 2.68 (d) National Merger Control Laws 2.70 (e) Criminal Sanctions on Natural Persons 2.72

C. Powers and Decisions of National Competition Authorities 2.77 (1) Introduction 2.77 (2) The NCA 2.78 (3) The Decisions of an NCA 2.83

(a) Scope of Article 5 2.84 (b) The Decisions Listed in Article 5 2.88

(4) Triggering a Decision by an NCA 2.91 (a) The NCA Acts on its Own Initiative or on a Complaint 2.91 (b) National Notification Systems 2.93

D. Commission Powers and Decisions 2.96 (1) Introduction 2.96 (2) Article 7: Finding and Termination of Infringements 2.99

(a) The Power to Find Infringements 2.100 (b) The Power to Impose Remedies 2.103

(i) General Principles 2.104 (ii) Structural and Behavioural Remedies 2.107 (iii) Break-ups 2.110

(c) Complaints 2.114 (3) Article 8: Interim Measures 2.116 (4) Article 9: Commitments 2.118

(a) Introduction 2.118 (b) The Nature of Article 9 Decisions 2.121 (c) The Purpose of Article 9 Decisions 2.126 (d) The Procedure forAdopting Article 9 Decisions 2.129 (e) Adoption of the Decision and Reopening of the Proceedings 2.135 (f) The Scope for Legal Challenge 2.143

(5) Article 10: Finding of Inapplicability 2.145 (a) Introduction 2.145 (b) The Nature and Purpose of Article 10 Decisions 2.146

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(c) The Legal Effects of Article 10 Decisions 2.150 (i) The Relationship Between Articles 9 and 10 2.152

E. Cooperation Between Enforcers 2.154 (1) Introduction 2.154 (2) Cooperation within the ECN 2.155

(a) The Sharing of Work Amongst the Competition Authorities 2.156 (b) An NCA's Request to Another NCA to Carry Out an Investigation 2.160 (c) Exchange of Information and Its Use in Evidence 2.163

(i) Exchange of Information within the ECN 2.165 (i) Empowering ECNMembers to Exchange Information 2.165

2.167

Applicant 2.170 (ii) The Use of the Exchanged Information in Evidence 2.173

(%) A'o« Bffwcf»rÄcZf Lzw Provisions Prohibiting NCAsfrom Divulging Confidential

2.174 (ii) A Wider Umbrellafor the Protection ofConfidential Information 2.176

(iii) The Use in Evidence of the Information Exchanged within the ECN 2.177 (i) The General Principles of EU Law 2.179 (%) Ca« 0»/y Zk L&a/ z»

Application ofEU Competition Rules 2.182 (%) Gz« Ow/y z«

Respect ofthe SubjectMatterfor Which it was Collected 2.185

«ff fo o» Arronj 2.187 (v) Experience with Article 12 2.191

(d) The Obligation of Professional Secrecy and the Need to Disclose Information 2.192 (i) Which Information is Covered by Professional Secrecy? 2.194

0 Cowragr jffreg' 2.194

Confidential Information 2.197 (iii) Business Secrets 2.198 (iv) Other Confidential Information 2.201

(ii) The Disclosure of Information Acquired or Exchanged Pursuant to Regulation 1/2003 2.202 fA/fffMdT)! fo .Proz/f

Article 101 or 102 2.205 (iii) Disclosurc in granting acccss to the file 2.207

(i) Access to the File for the Addressee ofa Statement of Objections 2.207 (ii) Access to Information by Other Parties with Legitimate Intere.

in Particular Complainants 2.209 (3) Coherent Application within the ECN 2.210

(a) Introduction 2.210 (b) Information under Article 11(3) 2.213 (c) The Procedure in Article 11 (4) 2.214

(i) The Scope of the Article 11 (4) Procedure 2.216 (ii) The Article 11 (4) Process and its Objective 2.222 (iii) The Legal Consequences of Failure to Comply with Article 11 (4) 2.225

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(d) Article 11 (6): The Commission's Power to Withdrawa Case 2.229 (i) The Legal Nature of Article 11(6) 2.231 (ii) The Authorities Covered by Article 11(6) 2.234 (iii) Circumstances in Which Withdrawal may be Envisaged 2.238 (iv) The Procedure for ApplyingArticle 11(6) 2.248

(4) Coherent Application by National Courts 2.251 (a) The Competence of National Courts to Apply EU

Competition Rules 2.251 (b) The Coherent Application ofEU Competition Rules by

National Courts 2.254 (i) Commission Initiatives towards Coherent Application of EU

Competition Rules 2.258 (i) The Commission's Policy Notices and Guidelines 2.259 (ii) Co-Financing the Training of NationalJudges in EU

Competition Rules 2.261 (iii) ADatabase on NationalJudgments 2.263

(ii) Consistency in the Gase of Parallel or Consecu tive Application of EU Competition Rules 2.264

(c) Cooperation Between the Commission and the National Courts 2.270 (i) The Opportunity for the National Courts to ask the Commission

for Information or for its Opinion 2.274 (i) The Opportunity to Ask the Commission for Information 2.275 (ii) The Opportunity to Ask the Commission for Its Opinion 2.284

(ii) The Submission of Observation: 2.285

3. Article 101 Jonathan Faull, Lars Kj0lbye, Henning Leupold, and Ali Nikpay A. Introduction 3.01 B. Scope of Article 101 3.02

(1) Scope 3.02 (2) Goal and Steel 3.04 (3) Defence 3.05 (4) Environment and Culture 3.12 (5) Sport 3.16

C. Article 101(1) 3.23 (1) Undertakings 3.27

(a) Definition 3.27 (b) Professions 3.34 (c) Public Bodies Exception 3.39 (d) The Single Economic Unit Doctrine (No Intra-Enterprise Conspiracy

in EU Law) 3.49 (i) A Subsidiary Wholly-Owned, or Almost Wholly-Owned, By

Its Patent 3.53 (ii) A Patent Holding a Majority Shareholding in a Subsidiary But Less

than 100 Per Cent 3.59 (iii) Parent Liability in the Context of Joint Control 3.62 (iv) Companies with Non-Controlling Stakes in Another Company 3.67

(e) Successor Undertakings 3.68 (2) Agreements 3.74

(a) General Definition 3.74

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(b) Requires At Least Two Undertakings 3.75 (c) Form Irrelevant 3.76 (d) Notion of Agreement'and Limitation of Freedom ofAction 3.84 (e) Single Continuous Infringement Doctrine 3.87 (f) Tacit Acquiescence in Vertical Cases 3.101

(i) Volkswagen II 3.104 (ii) What Does Tacit Acquiescence Require? 3.109 (iii) Care Should be Taken in Applying the Bayer/Volkswagen II

Approach 3.114 (g) Formal Termination May Not be Sufficient 3.118 (h) Judicial Settlement 3.121

(3) Decisions by Associations of Undertakings 3.122 (4) Concerted Practices 3.126

(a) Definition 3.126 (b) Can a Concerted Practice be Inferred from Circumstantial

Evidence Alone? 3.140 (c) Vertical Concerted Practices 3.143

(i) 'Hub and Spoke'Concerted Practices 3.147 (5) Distinction Between Agreements and Concerted Practices 3.150 (6) State Compulsion 3.155 (7) The Notion of Restriction of Competition under EU Competition Law 3.160 (8) Restriction by Object 3.184

(a) Concept of Restriction by Object 3.184 (b) Restriction by Object and Appreciability 3.209

(i) The 'X*re-Expedia'Cz.se Law 3.210 (ii) The Commission's Approach to Appreciability in Object Cases 3.215 (iii) The Expedia Judgment 3.217

(9) Restriction by Effect 3.219 (a) The Commission's Traditional Approach 3.223 (b) Modifications by the EU Courts 3.230 (c) Restrictions of Rivalry Must Be Assessed in Their Market Context 3.231 (d) Ancillary Restraints Doctrine 3.235

(i) Commercial Ancillarity 3.236 (ii) Public Interest Ancillarity 3.243 (iii) The Narrow Scope of the Ancillary Restraints Doctrine 3.248

(i) Directly Related and Subordinate 3.251 (»j Abc«#»}' 3.253 (iii) Objective Necessityfor the Implementation ofthe

Main Operation 3.254 (iv) Proportionality 3.266

(iv) Concluding Remark: Ancillary Restraints Doctrine 3.269 (e) Exclusivity Necessary for Supply 3.271

(i) Exclusivity Must be Objectively Necessary 3.273 (ii) It is Unclear Whether this Doctrine Applies to Agreements

Between Competitors 3.274 (iii) Doctrine Only Likely to Apply in Clear-Cut Cases 3.279 (iv) Does the Approach Apply to 'Object' Cases? 3.288 (v) Difference Between Exclusivity Necessary for Supply and Ancillary

Restraints Doctrines 3.289 (f) Appreciability 3.294

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(g) Cumulative Effects Doctrine 3.298 (h) The Purpose of the Market Analysis 3.303

(i) No Rule ofReason under Article 101(1) 3.303 (ii) G0ttrup-Klim 3.311 (iii) Wouters 3.314 (iv) Metroland II 3.320 (v) 02 3.324

(i) Does 02 Signal a Change in Direction? 3.327 (vi) Explicit Rejection of the Rule ofReason under Article 101(1) by

the General Court 3.337 (i) Extentof Market Analysis 3.338 (j) Restrictive Clauses Are Not a Necessary Condition for the Application

of Article 101(1) 3.344 (k) The Commission's Policy as set out in the Article 101(3) Guidelines 3.347

(i) Step 1: The Counterfactual 3.350 (ii) Step 2: Assessment of the Likely Effect of the Agreement 3.359

(1) The Current State of Affairs: Developments in the Commission's Policy and the EU Courts' Case Law Subsequent to the Article 101(3) Guidelines 3.366 (i) Horizontal Cooperation Guidelines 3.375 (ii) Block Exemption Regulations 3.380 (iii) De Minimis Notice 3.381

D. Jurisdiction 3.385 (1) General 3.385 (2) The Concept of Trade Between Member States 3.388 (3) The Link Between Trade and the Agreement or Practice 3.392 (4) The Notion of'MayAffect' 3.395

(a) Introduction 3.395 (b) A Sufhcient Degree ofProbability 3.397 (c) An Influence on the Pattern of Trade 3.404

(i) Direct or Indirect, Actual or Potential 3.406 (5) Appreciability 3.413

(a) General Principles 3.413 (b) Quantification 3.416

(6) Assessment ofVarious Types of Agreement and Practices 3.427 (a) Introduction 3.427 (b) Agreements and Practices Concerning Imports and Exports and

Agreements and Practices Implemented in Several Member States 3.428 (c) Agreements and Practices Confined to the Whole or Part of a

Member State 3.429 (d) Agreements and Practices Covering Part of a Member State 3.432 (e) Agreements and Practices Involving Third Countries 3.435

E. Article 101(2) 3.442 E The Article 101(3) Exception 3.445

(1) Introduction 3.445 (2) The Relationship Between Article 101(1) and Article 101(3) 3.452 (3) General Principles for the Application of Article 101(3) 3.455

(a) Introduction 3.455 (b) The Nature of the Benefits that Can Be Taken into Account 3.458

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(c) The Relevant Market as the Proper Framework for Applying Article 101(3) 3.461

(d) The Temporal Application of Article 101(3) 3.464 (e) Block Exemptions 3.467

(4) The Four Conditions of Article 101(3) 3.472 (a) Introduction 3.472 (b) The First Test of Article 101(3): Efficiency Gains 3.473

(i) Examples of Relevant Types of Efficiencies 3.480 (ii) The Substantiation of Efficiency Claims 3.483

(c) The Second Test of Article 101(3): Indispensability 3.489 (d) The Third Test of Article 101 (3): AFair Share for Consumers 3.495 (e) The Fourth Test of Article 101(3): No Elimination of Competition in

Respect of a Substantial Part of the Products in Question 3.506

4. Article 102 Miguel de la Mano, Renato Nazzini, and Hans Zenger A. The System ofEnforcement of Article 102 4.01

(1) Introduction 4.01 (a) Elements of Article 102 4.01 (b) Relationship Between Article 101 and Article 102 4.08 (c) Purpose of Article 102: Protection of Competition or Protection of

Competitors? 4.10 (d) Role of Efficiencies in Article 102 Assessment 4.14

(2) Categorization of Abuses: Exploitative vs Exclusionary 4.16 (a) Prohibition of Customer Exploitation 4.17 (b) Prohibition of Exclusionary Practices 4.23

(3) Consequences of Infringement of Article 102 4.29 (a) Introduction 4.29 (b) Guiding Principles 4.31 (c) Types ofSanctions and Remedies in Article 102 Cases 4.35

(i) Fines 4.35 (ii) Cease and Desist Orders 4.45 (iii) Behavioural Remedies 4.46 (iv) Structural Remedies 4.48 (v) Which Remedy is Most Appropriate? 4.51

(d) Procedural Issues 4.52 (4) Commitment Decisions (Article 9 of Regulation 1/2003) 4.53

(a) Basic Principles 4.54 (b) Importance of Commitment Decisions in Article 102 Cases 4.57 (c) Concerns Regarding the Use of Commitment Decisions in

Article 102 Cases 4.61 (5) Judicial Review of Article 102 Decisions 4.68

(a) Review ofFacts and Law 4.71 (b) Review of'Complex Economic Matters' 4.76

B. The Article 102 Enforcement Priorities Guidance 4.83 (1) The Emergence of the Effects-Based Approach 4.83

(a) Traditional Approach under EU Law 4.83 (b) Form-vs Effects-Based Approach 4.86 (c) Pros and Cons of an Effects-Based Approach 4.89 (d) The Recent Adoption by the EU Courts of a More Explicitly Effects-

Based Approach 4.92 xx

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(2) The Commission's Review of Article 102 Policy 4.93 (a) Purpose of the Review 4.93 (b) The StaffDiscussion Paper 4.95

(3) The Article 102 Enforcement Priorities Guidance 4.98 (a) Adoption of Guidance as opposed to Guidelines 4.98 (b) Economics-Based Approach to Enforcement 4.99 (c) Impact of the Guidance on Future Cases 4.103 (d) Overview of the Guidance 4.106 (e) Brief Summary of the Approach to Abuse 4.108

(i) Anti-Competitive Foreclosure 4.112 (ii) Assessment of the Effect on Consumers 4.114 (iii) ObjectiveJustificationsandEfEciencies 4.119

C. Dominance 4.122 (1) Concept of Single Dominance 4.123

(a) Legal Definition of Single Dominance 4.123 (b) Concerns Regarding the Elements of the Definition of Dominance 4.124 (c) Approach Taken in the Guidance to the Test Elements 4.127 (d) Assessment of Market Power 4.130 (e) How Does the Guidance Approach Fit with the Legal Approach 4.133

(2) Factors Relevant to Single Dominance 4.139 (a) Economic Measurement of Market Power 4.140 (b) Factors Under the Case Law and the Commission's Guidance 4.143

(i) The Position of the Undertaking Concerned and Its Competitors 4.144 (i) Market Definition 4.145 (ii) Market Shares 4.149 (iii) Profitability of the Undertaking 4.169 (iv) Conduct of the Undertaking 4.172 (v) The Position of Competitors 4.175

(ii) Barriers to Entry and Expansion 4.180 (i) Regulatory Barriers to Entry 4.186 (») Capacity Constraints 4.191 (iii) Economies of Scale and Scope 4.192 (iv) Network Effects 4.197 (v) Switching Costs 4.201 (vi) Vertical Integration and Exclusive or PreferentialAccess to

Inputs or Customers 4.202 (vii) FinancialStrength 4.205 (viii) Spare or Excess Capacity 4.207 (ix) Other Factors 4.211

(iii) Countervailing Buyer Power 4.216 (3) Concept of Collective Dominance 4.218

(a) Definition of Collective Dominance 4.218 (b) Non-Oligopolistic Collective Dominance 4.221 (c) Vertical Non-Oligopolistic Collective Dominance 4.229 (d) Oligopolistic Collective Dominance 4.231

(4) Abuse of a Collective Dominant Position 4.241 (a) Joint Abuses 4.242 (b) Single Abuses 4.243

(5) Dominance and Abuse in Neighbouring Markets 4.244 (6) Dominance in New Economy Markets 4.248

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D. Concept ofAbuse 4.252 (1) General Concept of Abuse 4.252 (2) Definition of Abuse Under the EU Courts' Case Law 4.254 (3) The Test for Abuse 4.261

(a) Exploitative and Discriminatory Abuses 4.262 (b) Exclusionary Abuses 4.263

(i) Potential Tests Based on Economic Principles 4.265 (ii) Approach Taken in the Commission's Guidance 4.266

(i) Anti-CompetitiveForeclosure: General 4.268 (ii) Testfor Foreclosure in Pricing Cases 4.270 (iii) When is Foreclosure Enough to be Anti-Competitive? 4.275 (iv) Likely Harm to Consumers 4.280

(4) The Special Responsibility of the Dominant Undertaking 4.283 (5) Objectivejustification 4.290

(a) General 4.290 (b) Objective Necessity 4.291 (c) Efficiency Defence 4.292

E. Predatory Pricing 4.298 (1) What äs Predatory Pricing? 4.298

(a) Definition 4.298 (b) Economic Theories of Predatory Pricing 4.299 (c) Distinguishing Predatory Pricing From Normal Competition 4.300

(2) Predation Under EU Law: The AKZOTest 4.302 (a) Whether and How to Assess the Intent of the Dominant Firm 4.306 (b) What is the Appropriate Cost-Based Benchmark? 4.309 (c) Is a Below Cost Test Appropriate? 4.315

(i) Above-Cost Price Cuts as Part of a Wider Exclusionary Strategy 4.321 (ii) Above-Cost Price Cuts by a Quasi-Monopolist Liable to Exclude

its Only Competitor 4.324 (iii) Above-Cost Price Cuts Restricting Free Trade 4.326

(d) Difficulties With Relying on Price-Cost Tests 4.328 (i) Below Cost Pricing May Not Bea Necessary Condition 4.329 (ii) Below Cost Pricing May Not Be a Sufficient Condition 4.331 (iii) Below Cost Pricing May Be Pro-Competitive 4.333 (iv) Below-Cost Pricing Tests Create Measurement Difficulties 4.335

(e) The Post Danmark Test 4.341 (f) The Role ofRecoupment? 4.343

(3) The Predation Test in the Article 102 Enforcement Priorities Guidance 4.348 (a) Profit Sacrifice 4.351 (b) Exclusion of an Equally Efficient Competitor 4.363 (c) Consumer Harm and Recoupment 4.367

(i) Entry is Unlikely After the Prey is Excluded or Disciplined 4.372 (ii) Re-Entry is Unlikely 4.376 (iii) Assessment of the Competitive Constraint Exercised by the

Excluded Rival 4.378 (iv) Dominance Is Not Evidenceof Recoupment 4.379

(d) Objectivejustification 4.384 (i) Market-Expanding Efficiencies 4.389 (ii) To Facilitate Learning and Awareness of a Product

Among Consumers 4.392 (iii) To Improve the Firms Positioning as a Low-Price Company 4.393

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(e) Meeting Competition Defence 4.395 (f) Other Loss-Minimizing Strategies 4.396

F. Exclusive Dealing: Exclusivity Obligations and Loyal ty Rebates 4.397 (1) Case Law and Commission Decisional Practice 4.397

(a) Definition and Types of Exclusivity 4.397 (i) Legal and De Facto Exclusivity 4.398 (ii) Requirements Contracts 4.401 (iii) English Clause: 4.402 (iv) Imposition of Exclusive Obligations on Suppliers 4.405 (v) Exclusivity Imposed by Distributors 4.406

(b) The Abuse Test in Exclusivity Cases 4.407 (c) Objective Justification 4.411 (d) Definition and Types of Conditional Rebates 4.413 (e) Abuse Test in Rebates Cases 4.416

(i) Rebates That Are Presumptively Lawful (Quantity Rebates) 4.416 (ii) Rebates That Are Nakedly Exclusionary 4.417 (iii) Fidelity Rebates 4.418 (iv) IndividualizedTarget Rebates 4.421 (v) Standardized Rebates 4.426

(2) Policy and Effects-Based Approach 4.429 (a) Commission's Approach Under the Article 102 Enforcement Priorities

Guidance 4.429 (b) The Logic of the Commission's Approach Towards Loyal ty Rebates and

Exclusive Dealing 4.435 (i) Economic Reasoning for Use ofRebate Schemes 4.437 (ii) Possible Anti-Competitive Harm From Use ofRebate Schemes 4.443

(c) Identifying Anti-Competitive Foreclosure Under the Article 102 Enforcement Priorities Guidance 4.446 (i) Step 1: The As-Efficient Competitor Test 4.447 (ii) Step 2: Assessment of Anti-Competitive Foreclosure 4.450 (iii) Countervailing Efficiencies and Objective Justification 4.454

(d) The Limits of the Article 102 Enforcement Priorities Guidance Approach 4.460

(e) The Commission's Application of the New Approach 4.468 G. Tying and Bundling 4.474

(1) Introduction 4.474 (a) Definition ofTying and Bundling 4.474 (b) Relationship with Article 101 4.477

(2) Legal Analysis and Case Law on Tying 4.478 (a) A Dominant Position on the Tying Market 4.480 (b) The Two-ProductTest 4.482 (c) Coercion 4.488 (d) Anti-Competitive Effect 4.492

(i) The Requirement to Prove Foreclosure of As-Efficient Competitors 4.492 (e) Objective Justification 4.502

(i) Reduction in Transaction Costs 4.503 (ii) Preservation of Goodwill, Quality Assurance, and Ensuring

Compliance with Safety Requirements 4.510 (iii) Dynamic Efficiency 4.511 (iv) Standardization 4.514

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(3) Case Law on Mixed Bundling 4.519 (4) Policy and Effects-Based Approach 4.522

(a) The Article 102 Enforcement Priorities Guidance Approach Towards Tying and Bundling 4.522

(b) NoPresumption of Anti-Competitive Harm 4.529 (c) Anti-Competitive Tying and Bundling 4.538 (d) Price Discrimination and Multi-Product Rebates 4.553

H. Refusal to Supply 4.558 (1) Concept ofAbusive Refusal to Supply 4.558 (2) Basic Elements 4.561

(a) Competitive Advantage on Downstream Market 4.561 (b) Enforcement of Other Abuse 4.563 (c) Constructive Refusal to Supply 4.565 (d) De novo Refus als vs Withdrawal of Supply 4.567

(3) Types of Refusal to Supply 4.569 (a) Refusal to Supply a Physical Product or Service 4.570 (b) Refusal to Provide Access to an Essential Facility 4.571 (c) Refusal to License IP Rights 4.572 (d) Refusal to Supply Information Needed for Interoperability 4.575

(4) Potential Anti-Competitive Effects ofRefusals to Supply 4.577 (5) The Case Law on Refusal to Supply 4.581

(a) General Framework 4.581 (b) Indispensability 4.585 (c) The Foreclosure Effect 4.594 (d) Raising Rivals'Costs as Exclusionary Effect? 4.599 (e) The Foreclosure Effect and the 'Essential Facilities' Doctrine in

Commission Practice 4.602 (f) Consumer Harm 4.606 (g) Interoperability Cases Since Microsoft 4.609 (h) Refusal to Supply an Existing Customer 4.610 (i) Defences (Objective Necessityand Objectivejustification) 4.613

(6) The Approach Under the Commission's Guidance 4.620 (a) General Approach 4.620 (b) Necessary Conditions 4.624

(i) Objective Necessity 4.628 (ii) Elimination of Effective Competition 4.630 (iii) Consumer Harm (and Incentives Balancing Test) 4.631

(iv) Objective Justifications (Efficiencies) 4.634 (7) Refusal to Supply and Patents 4.636

I. Margin Squeeze 4.638 (1) Concept of a Margin Squeeze Abuse 4.638 (2) Legal Analysis of Margin Squeeze 4.642

(a) The Early Case Law 4.642 (b) Elements of the Abuse 4.646

(i) Margin Squeeze is a Stand-Alone Abuse 4.651 (ii) The Need to Demonstrate an Anti-Competitive Effect 4.652 (iii) Factors Relevant to Assessing Potential Anti-Competitive Effect 4.657 (iv) The 'As-Efficient Competitor' Test 4.660 (v) Basis for Calculating Potential Effects 4.662 (vi) Objectivejustification 4.664 (vii) Relevance of Level of Dominance 4.665

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(3) Economic Assessment 4.667 (a) General 4.667 (b) The Cost Benchmark 4.671 (c) Profitability Analysis 4.674 (d) Assessment of the Spread 4.679 (e) Specific Considerations in Start-Up Phases 4.682

(4) Interplay Between Margin Squeeze and Refusal to Deal: Indispensability 4.683 (5) Interplay Between Margin Squeeze and Regulatory Obligations 4.693

J. Specific Abusive Practices in Relation to IP Rights 4.694 (1) Introduction 4.694

(a) ComplementaryAims oflP Rights and Antitrust 4.694 (b) Appropriateness of Antitrust Intervention in the IP Rights Arena 4.696 (c) Potential Competition Concerns Arising out of IP Rights 4.702

(2) Supply of Misleading Information to Extend Patent Wlidity 4.707 (a) Nature of the Abuse 4.713 (b) Intent Not Determinative 4.716 (c) Evidence of Actual Effects 4.720

(3) Withdrawal of Marketing Authorization to Restrict Entry of Generics 4.722 (4) Patent Filing Strategies 4.729

(a) Early Cases on Strategie Use of Patents 4.729 (b) Defensive Patent Strategies: Blocking Patents 4.731 (c) Other Strategie Behaviour 4.736

(5) Patent Settlements With Reverse Payments (Pay for Delay) 4.738 (a) Overview: Potential Benefits and Harms From Patent Settlements 4.738 (b) Commission Practice 4.740

(6) Patent Hold-Up in the Context of Standard Setting 4.746 (a) Context: Standard Setting and Patent Hold-Up Possibilities 4.746 (b) PatentAmbush 4.751

(i) Definition 4.751 (ii) Anti-Competitive Effects of Patent Ambush 4.752 (iii) Conditions for Abuse: The Rambus Decision 4.753

(c) FRAND Hold-Up 4.763 (i) Definition of FRAND Hold-Up: The Qualcomm Case 4.763 (ii) Particular Issues Surrounding Article 102 Enforcement in

F RAN DLicensing 4.765 ('.) FRAND is Not a Static or Pre-Defined Concept 4.765 (ii) What Constitutes Fair'and'Reasonable'? 4.771 (iii) Wbat Constitutes 'Non-Discriminatory'? 4.781

(iii) Importance of FRAND 4.784 (7) Anti-Competitive Litigation in Relation to Standard Essential Patents 4.787 (8) Issues Applicable Across IP Rights Cases 4.797

(a) Assessing Dominance in Pharmaceutical IP Rights Cases 4.797 (i) Inferring Dominance from Level ofRents 4.799 (ii) Dominance Relative to a Competitive Counterfactual Post-Loss of

Exclusivity 4.805 (b) Anti-Competitive Foreclosure and Objective Justification in IP Rights

Cases 4.806 (c) Applicability of Article 102 to 'Standard' Strategies/Tactics Available

Under IP Rights 4.810 (d) Intervention under Article 102 vs Enforcement of IP Law 4.814

xxv

K. Exploitative Abuses 4.821 (1) Concept ofExcessive Pricing 4.821 (2) The Test for Excessive Pricing Under EU Case Law 4.827

(a) The United Brands Test 4.827 (b) Difficulties in the Application of the United Brands Test: Port of

Heisingborg 4.833 (c) Alternative Approaches under the Case Law 4.836

(3) Imposing Other Unfair Terms 4.844 (4) Economic Approach to Excessive Pricing 4.850

(a) Circumstances Suitable for Intervention 4.850 (i) To Restore Dynamic Competition 4.856 (ii) Exploitative Prices as a Result of Exclusionary Conduct 4.858 (iii) Exploitation of Dominance Resulting ftom

Non-Competitive Forces 4.862 (b) Determining Whether Prices are Abusive 4.863

(!) The Price-Cost Difference is Excessive 4.864 (ii) Unfair Price in Itself or Compared to Others 4.867

(i) Discrimination-Based Benchmarks 4.875 (ii) Direct Price-Cost Comparisons 4.879

(5) Unfairly Low Prices Extracted by Dominant Buyers 4.882 (6) Limiting Production, Markets, or Technical Development 4.884

L. Price Discrimination 4.889 (1) Concept of Price Discrimination 4.889 (2) Competition Concerns Regarding Price Discrimination 4.891 (3) Case Law and Commission Practice on Article 102(c) Discriminatory

Pricing Abuses 4.896 (a) Discrimination Based on Nationality 4.897 (b) Geographica! Price Discrimination 4.899 (c) Market-Distorting Price Discrimination 4.907

(i) Definition 4.907 (ii) Equivalent Transactions 4.908 (iii) Dissimilar Conditions 4.911 (iv) Competitive Disadvantage 4.915

(4) Policy and Effects-Based Approach 4.935 (a) The Commission's Current Enforcement Approach 4.935

5. Mergers Claes Bengtsson, Josep Maria Carpi Badia, andMassimiliano Kadar A. Introduction 5.01

(1) Origins and Evolution of EU Merger Control 5.01 (a) Introduction of an EU Merger Control System 5.01 (b) The First Decade of Application of EU Merger Control 5.03 (c) The Judgments in Airtours, Tetra Laval, and Schneider 5.07 (d) The 2004 Reform 5.09 (e) Evolution of EU Merger Control Following the 2004 Reform 5.11

(2) Core Principles of EU Merger Control 5.15 (a) Compulsory Ex Ante Notification 5.15 (b) One-Stop Shop 5.17 (c) One-Tier Administrative Procedure Subject tojudicial Review 5.20 (d) Enforcement Objectives 5.22

(3) Statistics on Enforcement Over Time 5.24 xxvi

B. Jurisdiction 5.31 (1) Overview 5.31

(a) Two-LimbedTest to Determine Jurisdiction 5.32 (i) The Concept of a'Concentration' 5.33 (ii) The Requirement of an 'EU Dimension' 5.35

(b) Regulator/ Framework: The Merger Regulation and the Jurisdictional Notice 5.36

(c) Discussions with the Commission on Jurisdiction in Individual Cases 5.38 (2) The Concept of a Concentration: Merger 5.43 (3) The Concept of a Concentration: Acquisition of Control 5.48

(a) Overview 5.48 (b) Control 5.49

(i) Who Acquires Control? 5.52 (ii) How Can Control Be Acquired? 5.57 (iii) The Object of Control 5.62 (iv) The Lasting Nature of the Change in Control 5.67 (v) Internal Restructurings and Concentrations Involving

State-Owned Undertakings 5.73 (c) The Acquisition of Sole Control 5.78

(i) De Jure Sole Control 5.79 (ii) De Facto Sole Control 5.80

(d) The Acquisition of Joint Control 5.87 (i) Equal Voting Rights 5.89 (ii) Veto Rights 5.90 (iii) Joint Exercise ofVoting Rights 5.93

(e) Changes in the Structure and/or Quality of Control 5.95 (f) Non-Controlling Minority Shareholdings (Structural Links) 5.100 (g) Exceptions Under Article 3(5) of the Merger Regulation 5-106

(4) JointVentures 5.111 (a) Introduction 5.111 (b) Concept of Joint Venture 5.114 (c) Relevant Jurisdictional Test 5.120

(i) Creation of a Joint Venture 5.121 (ii) Joint Acquisitions of an Undertaking or Business 5.122 (iii) Other Operations Involving Joint Ventures 5.127

(d) The Requirement of Full-Functionality 5.128 (i) Overview 5.128 (ii) Sufficient Resources to Operate Independently on the Market 5.131 (iii) Relations Between the Joint Venture and its Parent Companies 5.132 (iv) Operating on a Lasting Basis 5.137

(5) Interrelated and Staggered Operations 5.139 (a) InterdependentTransactions 5.141 (b) Consecutive Transactions Between the Same Parties

(Staggered Transactions) 5.149 (6) Ancillary Restraints 5.152 (7) The Requirement of an EU Dimension 5.153

(a) The Purpose of Turnover Thresholds 5.154 (b) The Principal Threshold under Article 1 (2) of the Merger Regulation 5.157 (c) The Alternative Threshold under Article 1 (3) of the Merger Regulation 5.160 (d) Appraisal of the Operation of the Turnover Thresholds 5.163

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(8) The Calculation of Relevant Turnover 5.168 (a) Step 1 .Tdentifying the Undertakings Concerned 5.169

(i) General Rule 5.171 (ii) Specific Scenarios on the Acquiring Side 5.175 (iii) Specific Scenarios on the Acquired Side 5.180

(b) Step 2: Methodology for the Calculation of Turnover 5.184 (i) Concept of Turnover 5.185 (ii) Attribution ofTurnover Between Undertakings in a Group 5.188 (iii) Treatmentof Internal Turnover 5.196 (iv) Geographie Allocation ofTurnover 5.199

(c) The Relevant Date and Financial Accounts 5.204 C. Interaction with Member States and Third Countries 5.207

(1) Introduction 5.207 (2) Reallocation of Jurisdiction between the Commission and Member

States ('Referrals') 5.208 (a) Purpose of the Referral System 5.208 (b) Use of the Referral System Over Time 5.211 (c) Guiding Principles Applied when Considering Referral Requests 5.216 (d) Operation of the Referral System in Practice 5.222

(i) Referrals from the Commission to One or More NCAs 5.224 (i) Pre-Notification Referrals Requested by the Parties (Article 4(4)) 5.225 (ii) Post-Notification Referrals Requested by an NCA (Article 9) 5.239

(ii) Referrals From One or More NCAs to the Commission 5.255 (i) Pre-Notification Referrals Requested by the Parties

(Article 4(5)) 5.256 (ii) Post-notification Referrals Requested by an NCA (Article22) 5.266

(e) Evaluation and Reform of the Referral System 5.277 (3) Member State Action on Non-Competition Gmunds 5.281

(a) Introduction 5.281 (b) Assessment of Legi timate Interests 5.283

(i) Recognized Interests 5.284 (ii) Non-Recognized Interests 5.290

(4) Concentrations in the Defence Sector 5.294 (5) Cooperation Between the Commission and Member States 5.298

(a) General Cooperation Obligations 5.299 (b) Cooperation Düring Specific Phases of an Investigation 5.303

(i) Düring the Referral Process 5.303 (ii) Düring Phase I 5.304 (iii) Düring Phase II 5.306

(c) Enhancing Cooperation Between Member States Through the ECN 5.309 (6) Merger Control in the EEA Context 5.310

(a) The Scope of the Merger Control System under the EEA 5.310 (b) Allocation of Jurisdiction Between the Commission and the EFTA

Surveillance Authority 5.312 (c) Cooperation Between the Commission and the EFTA

Surveillance Authority . 5.316 (7) International Cooperation in Merger Control 5.318

(a) Framework for International Cooperation 5.318 (b) Practica! Aspects of International Cooperation in Merger Cases 5.322 (c) Statistics on International Cooperation 5.328

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D. Merger Control Procedure 5.331 (1) Introduction 5.331 (2) Principal Features of the Procedural Framework 5.332

(a) Underlying Rationale: Proportionale, Effective Control 5.332 (b) Rinding Procedural Deadlines 5.338 (c) The Instruments of the Procedural Framework 5.341 (d) The DifFerent Actors in EU Merger Proceedings 5.342

(i) The Notifying Parties and Other Involved Parties 5.343 (ii) The Commission 5.348 (iii) Third Parties 5.356 (iv) Member State NCAs 5.357 (v) Non-EU Agencies 5.358 (vi) The EU Courts 5-359

(3) The Main Steps and Timetable for EU Merger Control Proceedings 5.360 (4) The Pre-Notification Phase 5-362

(a) Introduction 5.362 (b) Timingof Pre-Notification Contacts 5.366 (c) Initial Contact and Request for a Case Team 5.368 (d) Confidentiality 5.371 (e) Discussions on Jurisdiction 5.373 (f) Discussions on Substance, Procedure, andTiming 5.375 (g) Review ofDraft(s) Form CO and Requests for Waivers 5.379 (h) Submission of Internal Documents 5.381 (i) Fact Finding: Contacts with Third Parties 5.384 (j) Green Light for Notification 5.385

(5) Notification of a Concentration 5.388 (a) Introduction 5.388 (b) Obligation to Notify and Standstill Obligation 5-389

(i) Automatic Exceptions: Public Bids and Series of Transactions inSecurities 5.391

(ii) Ad Hoc Derogation; at the Request of the Parties 5.392 (iii) PreventingEarlyImplementation 5.396

(c) Consequences ofFailure to Notify 5.398 (d) Timing of Notification 5.399 (e) Notifying Parties 5.403 (f) Submission of Form CO 5.404 (g) Incompleteness 5.412 (h) Publication of the Fact of the Notification 5.415

(6) Phase I 5.417 (a) Introduction 5.417 (b) Timetable and Deadlines 5.418 (c) Fact-Finding 5.422 (d) Where Competition Concerns are Identified 5.427 (e) Decision 5.430 (f) Notification and Publication 5.431

(i) Notification To The Parties 5-431 (ii) Publication 5.433

(7) Phase II: In-Depth Investigation 5.437 (a) Introduction 5.437 (b) Procedural Safeguards in Phase II 5.439 (c) Timetable and Deadlines 5.440

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(d) Initial Stage: Review of Key Documents, Reply to the Article 6(l)(c) Decision and State of Play Meeting 5.445

(e) In-Depth Investigation 5.447 (f) Where the Competition Concerns are Dispelled 5-450 (g) Where Competition Concerns Remain 5-451 (h) The Statement of Objections 5.452

(i) Purpose and Content 5.452 (ii) Timing 5.454 (iii) Scope of the SO 5.455 (iv) Other Parties 5.457

(i) Access to File 5.459 (i) Purpose 5.459 (ii) Timing 5.461 (iii) Scope 5.462

(i) Internal Documents 5.463 (ii) Business Secrets and Confidential Information 5.466

(iv) Protection of Business Secrets and Confidential Information 5.469 (v) Use of the Information/Access to Documents 5.476

(j) Reply to the SO and Oral Flearing 5.478 (i) Reply to the SO 5-478 (ii) Oral Hearing 5-480

(i) Attendees 5.480 (ii) Preparation 5.481 (iii) Conduct of the Hearing 5.482 (iv) Post-HearingReport 5.486

(k) The Post-SO/Oral Hearing Stage 5.487 (i) Final State of Play Meetings 5.487 (ii) Peer Review Panel 5.489 (iii) Advisory Committee 5.494

(1) Decision 5.499 (m) Notification and Publication 5.503 (n) Post-Decision Remedies Process 5.505

(8) The Simplified Procedure 5.506 (a) Overview and Rationale 5.506 (b) The Commission's Discretion in Applying the Simplified Procedure 5.509 (c) Use of the Simplified Procedure in Practice 5.510 (d) Impact of the Simplified Procedure on Deadlines 5.511 (e) The Scope of the Simplified Procedure: Categories of Suitable Cases 5.512

(i) Five Categories of Suitable Cases 5.512 (ii) Exclusions 5.520

(f) Procedural Aspects 5.521 (g) Decision 5-527

(9) Abandonment of a Concentration, Withdrawal and Re-submission of a Notification, Change of an Authorized Transaction 5.529 (a) Abandonment 5.529 (b) Withdrawal of a Notification 5.530 (c) Change in the Transaction Structure 5.531

(10) Particular Procedures 5-532 (a) Interim Measures 5.534

(i) General 5.534 (ii) Conditions Necessary for the Imposition of Interim Measures 5.536

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(iii) Scope of Interim Measures 5.538 (iv) Process 5.541

(b) Revocation of a Clearance Decision 5.542 (c) Inspections and Requests for Information by Decision 5.544 (d) Imposition ofFines and Periodic Penalties 5.548

(i) Fines 5.548 (ii) Periodic Penalty Payments 5.554

E. Substantive Assessment 5.556 (1) Main Elements of the Assessment under Article 2 of the

Merger Regulation 5.556 (a) A concentration' 5.557 (b) 'whichwould' 5.559 (c) 'impedeeffectivecompetition 5.562

(i) Intermediäre and Ultimate Consumers 5.564 (ii) Concept of Consumer Weifare 5.565

(d) 'significantly' 5.568 (e) 'in the common market or in a substantial part of it,' 5-577 (f) 'in particular as a result of the creation or strengthening of a dominant

position.' 5-581 (2) Definition of the Relevant Market 5.587

(a) Relevant Product Market 5.591 (i) Demand-Side Substitution 5.593 (ii) Supply-Side Substitution 5.595

(b) Relevant Geographie Market 5.602 (i) Defining the Geographie Market on the Basis of Location of

Customers or Producers 5.607 (c) The SSNIPTest and Critical Loss Analysis 5.612 (d) Price Discrimination Markets 5.618 (e) Factors Relevant to Market Definition and Types of Evidence

ReliedOn 5.626 (i) Views on Functionality 5.630 (ii) Commercial Strategies and Marketing Material 5.635 (iii) Analysis of Price Levels 5.638 (iv) Analysis of Price Correlation 5.645 (v) Event Analysis 5.654

(f) Market Definition for Merger Cases and Antitrust Cases are Similar but Distinct 5.657

(g) Market Definition in an Effects-Based Analysis 5.661 (3) Analysis of the Effects of a Concentration 5.666

(a) The Move to a More Effects-Based Approach 5.667 (b) Gravitation Towards Unilateral Horizontal Effects 5.669 (c) Increasingly ComplexAssessments 5.675

(4) Horizontal Mergers 5.680 (a) Non-Coordinated Effects (Unilateral Effects) 5.680

(i) Market Share Thresholds 5.680 dre (Ac rzf? 5.682

5.684 ßwi) 5.687

(ii) Intervention Thresholds: Removal of a Significant Competitive Constraint 5.691

(iii) Assessment of Effect: Additional Factors 5.700

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(iv) Differentiated Product Markets: Closeness of Competition 5.703 (i) Views of the Market Partieipants 5.709 (ii) Internal Documents 5.714 (iii) Bidding Data 5.715 (iv) Switching Data 5.720 (v) Price Analysis 5.722 (vi) Cross-Price Elasticities 5.724 (vii) Modelling the Market 5.726

(v) Homogeneous Product Markets: Capacity 5-730 (vi) Multi-Sourcing 5-736 (vii) Ability to Hinder Expansion 5-738 (viii) Mergerwith a Potential Competitor 5.746 (ix) Buyer Power Created by the Merger 5.755

(b) Coordinated Effects 5.764 (i) Concept and History 5.764

(i) Collective Dominance Under the 1989Merger Regulation 5.767 (ii) The Airtours Benchmark 5.769 (iii) 'The SONY/BMG Jurisprudence 5.771

(ii) Analytical Framework 5.776 (i) The Airtours Criteria 5.777 (ii) The Approach Under the Horizontal Merger Guidelines 5.778

(iii) Creating Coordination or Strengthening Existing Coordination 5.782 (?) 5.783

5-787 (iv) The Criteria for Coordination 5.791

Environment) 5.792 (ii) Monitoi'ingDeviations 5.793 (iii) Adequate DeterrentMechanisms 5.800 (iv) Reactions of Outsiders 5.805

(5) Non-Horizontal Assessment 5.810 (a) Non-Coordinated Effects (Unilateral Effects) 5.810

(i) Theories of Harm 5.813 (i) Example oflnputForeclosure: UTC/Goodrich 5.817 (ii) Example ofCustomer Foreclosure: Mobile Wallet Platform 5.821 (iii) Example of ConglomerateEffects: Intel/McAfee 5-826

(ii) Who is Entitled to Protection From the Potential Effects of Non-Horizontal Mergers? 5.830

(iii) Framework for Analysing Foreclosure 5.836 (i) Ability to Foreclose 5-839 (ii) Incentive 5.847 (iii) Effect 5.852

(iv) The Diminished Role of Dominance in Non-Horizontal Cases 5.860

(b) Coordinated Effects 5.867 (i) Reaching Terms of Coordination 5.868 (ii) Monitoring Deviations 5.869 (iii) Deterrent Mechanisms 5.870 (iv) Reactions From Outsiders 5.871

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(6) CountervailingFactors 5.874 (a) Buyer Power 5.877

(i) The Exercise of Buyer Power 5.883 (i) Immediately Switch Supplier 5.884 (ii) Vertically Integrate Upstream 5.886 (iii) SponsorEntry 5.889 (iv) Refuse to Buy Other Products 5.890

(ii) Buyer Power Must Benefit All Customers 5.893 (b) Entry 5.898

(i) Types of Entry Barrier 5.900 (ii) Link Between Entry Barriers and Market Definition 5.902 (iii) Conditions for Entry to be Sufficient Countervailing Factor 5.904

(i) Entry Must Be Likely 5.905 (ii) Entry Must Be Timely 5.916 (iii) Entry Must Be Sufficient 5-918

(c) Efficiencies 5-921 (i) Historie Treatment of Efficiencies: The'Efficiency Qffence'? 5.924 (ii) Recent Practice 5.931 (iii) Criteria for an Efficiency Defence 5.942

(i) Efficiencies Must Benefit Consumers 5.942 (ii) Efficiencies Must Be Merger-Specific 5.952 (iii) Efficiencies Must BeVerifiable 5.956

(d) Failing Firm Defence 5.961 (i) Conditions Necessary for Failing Firm Defence 5 - 963

(i) Exit Due to Financial Difficulties 5.968 (ii) No LessAnti-Competitive Solution 5.969 (iii) Exit From tbeMarket 5.971

(ii) Failing Division 5.973 (iii) Parties Must Provide the Evidence 5.976

F. Remedies 5.980 (1) Overview 5.980 (2) General Principles 5.984

(a) Roles ofNotifying Parties and Commission 5.984 (b) Attachment to Decision as Conditions or Obligations 5.988 (c) Distinction Between Remedies, 'Take-Note' Commitment, and

Facts Taken Into Account 5.991 (i) Take-Note Commitments 5.992 (ii) Facts Taken Into Account 5.994 (iii) Potential Remedy for Breach 5.996

(3) Conditions That Remedies Must Meet 5.997 (a) Remedies Must Eliminate the Competition Concerns 5-998 (b) Remedies Must Be Proportionate 5-1000 (c) Remedies Must Be Capable ofEffective Implementation 5.1005

(i) Timely Implementation 5.1006 (ii) Lasting and Workable Solution 5.1010 (iii) Capable ofAdequate Monitoring 5.1012

(d) Remedies Must Not Lead to New Competition Concerns 5.1014 (4) Remedies in Phase I and Phase II 5.1015

(a) Phase I Remedies 5.1016 (i) Substantive Requirements 5.1016 (ii) Formal Requirements 5.1018

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(iii) Timing 5.1022 (iv) Assessment Process 5.1024 (v) Modifications 5.1029 (vi) Outcome 5.1032

(b) Phase II Remedies 5.1034 (i) Substantive Requirements 5.1034 (ii) Formal Requirements 5.1037 (iii) Time Limits 5.1038 (iv) Assessment Process 5.1042 (v) Modifications 5.1043 (vi) Outcome 5.1045

(5) Types of Remedies 5.1047 (a) Typology andTerminology 5-1047 (b) Acceptability of the Various Categories 5.1050 (c) Divestiture ofa Business 5.1055

(i) Overview 5.1055 (ii) Purpose 5.1058 (iii) Divestiture of a Viable and Competitive Stand-AIone Business 5.1060 (iv) Carve-Out Divestitures 5.1067 (v) Alternative to Carve-Outs 5.1071 (vi) Alternative Divestitures: Crown Jewels 5.1072 (vii) Suitable Purchaser 5.1075

(i) Standard Requirements 5.1076 (ii) When a Suitable Purchaser Must Be Identified 5.1078

(d) Removal of Links with Competitors 5.1083 (e) Access Remedies 5.1086 (f) Commitments to Enter Into, Modify, or Terminale Long-Term

Agreements 5.1091 (g) Conduct Remedies in Conglomerate Cases 5.1095 (h) Other Conduct Remedies 5.1096

(6) Implementation and Modification of Remedies Post-Decision 5.1098 (a) Implementation of Remedies 5.1098

(i) Timing 5.1098 (ii) Obligations of the Parties in the Interim Period 5.1100 (iii) Hold-Separate Manager 5.1102 (iv) Monitoring Trustee 5 • 1104 (v) Proposal for a Suitable Purchaser 5.1107 (vi) Divestiture Trustee 5.1108

(b) Modification of Remedies Post-Decision 5.1111 (i) Extension of First Divestiture Period 5.1112 (ii) Other Modifications Requested by the Parties 5.1114 (iii) Other Modifications Requested by the Commission 5.1116

(c) Breach of Remedies 5.1117 (i) Breach of Obligations 5.1118 (ii) Breach of Conditions 5.1120 (iii) Fines 5.1123

G. Judicial Review 5.1125 (1) Introduction 5.1125 (2) Types of Acts That Can Be Reviewed 5.1129 (3) Legal Standing in Actions for Annulment 5.1137

(a) Member States, Parliament, and Council 5.1138

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(b) Natural and Legal Persons 5.1139 (i) The Notifying Parties 5.1144 (ii) Other Parties to the Concentration 5.1145 (iii) Third Parties 5.1146

(4) Gmunds for Challenge 5.1151 (a) Lack of Competence 5.1152 (b) Infringement of an Essential Procedural Requirement 5.1153 (c) Infringement of the Treaties or of An y Rule of Law Relating to

Their Application 5.1162 (d) MisuseofPowers 5.1163

(5) Procedure 5.1164 (a) General 5.1164 (b) Interim Measures 5.1170 (c) Expedited Procedure 5.1175 (d) Appeals from the General Court to the Court of Justice 5.1178

(6) The Scope of Review 5.1182 (a) Introduction 5.1182 (b) Bürden of Proof 5.1184 (c) Standard of Proof 5.1188 (d) Standard of Review: The Margin of Appreciation 5.1190 (e) Füll Jurisdiction Over Fines and Periodic Penalty Payments 5.1195

(7) Consequences of Annulment 5.1197 (a) Introduction 5.1197 (b) The New Examination 5.1200

(8) Actions for Damages 5.1203 (a) Introduction 5.1203 (b) Unlawful Conduct 5.1205 (c) Harm 5.1209 (d) Causal Link 5.1210

6. Article 106—Exclusive or Special Rights and Other Anti-Competitive State Measures Jose Luis Buendia Sierra A. Introduction 6.01

(i) Competition Law Normally Deals Only With the Behaviour of Undertakings 6.01

(ii) State Defence Doctrine 6.02 (iii) State Liability Under Competition Law 6.03

B. Application ofArticles 4(3) and 3(3) TEUand Articles 101 and 102TFEU to Anti-Competitive State Measures 6.04

(i) Initial Position (Broad Interpretation) 6.04 (ii) Court Narrows Interpretation 6.05 (iii) Impact of the Lisbon Treaty 6.06 (iv) Application ofArticles 106, 107, and 108 to Anti-Competitive

State Measures 6.08 C. Article 106(1): State Measures in Respect of Public or

Privileged Undertakings 6.09 (1) Addressees and Regulatory Content 6.09 (2) State Measures 6.10 (3) Related to Public or Privileged Undertakings 6.15

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(a) 'Economic Activity' 6.16 (i) Article 106(1) Applies to State Regulation of Economic Activities 6.16 (ii) Definition of'Economic Activity' 6.17 (iii) Criteria Used By the Court of Justice 6.18 (iv) 'Public' Undertaking 6.26 (v) Definition of Public Undertaking 6.27 (vi) A Separate Legal Entity is Not Necessary 6.28 (vii) Public Undertakings After Privatization 6.29 (viii) 'Privileged' Undertakings 6.30

(b) Exclusive Rights 6.31 (i) Notion of'Exclusive Right' 6.31 (ii) Exclusive Right and Dominant Position are Different Things 6.33 (iii) Exclusive Rights are Created by State Measures 6.34 (iv) Need for a Discretionary Decision by the State 6.35 (v) Special Rights 6.37

(c) The Connection Between the Measure and the Undertaking 6.42 (i) Types of Connection Required by Article 106(1) 6.42 (ii) State Measures Which Benefit the Undertaking 6.44 (iii) State Measures Which Use the Undertaking as an Instrument 6.45 (iv) State Measures Granting an Exclusive Right 6.46 (v) The Dual Role of Exclusive Rights Within Article 106(1) 6.48 (vi) General Measures Do Not Fall Under Article 106(1) 6.49

(4) Contrary to Another Provision of the TFEU 6.50 (5) Article 106(1) in Combination with the Competition Rules Addressed to

Undertakings 6.53 (a) Article 106(1) in Combination with Article 102 6.54

(i) Dominant Position 6.55 (ii) State Measures Leading to Actual Abusive Behaviour of the

Undertakings 6.56 (iii) Different Types of Abuse 6.57 (iv) Only the State is Responsible for State-Imposed Abuses 6.59 (v) Both the State and the Undertaking are Liable for State-Induced

Abuses 6.60 (vi) State Inacdvity 6.61

(b) State Measures Affecting the Structure of Competition and Leading to Potential Abusive Behaviour of Undertakings 6.62 (i) No Requirement for Actual Abuse 6.62 (ii) The Granting of Regulatory Powers to an Undertaking 6.63 (iii) The 'Bundling' of Regulatory and Commercial Activities 6.64 (iv) The Granting of an Exclusive Right 6.65 (v) The Demand Limitation Doctrine 6.66 (vi) The Conflictoflnterest Doctrine 6.67 (vii) Presumption of Causal Link 6.69 (viii) Effects Similar to Those of Abusive Behaviour 6.70 (ix) The Doctrine of the Extension of a Dominant Position 6.71 (x) The Automatic Abuse Doctrine 6.77 (xi) The La Crespelle Case 6.82 (xü) More Recent Cases 6.83 (xiii) The Current Status Quo 6.86 (xiv) Effect on Intra-EU Trade 6.91

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(c) Article 106(1) in Combination with Article 101 6.93 (6) Article 106(1) in Combination with the Treaty Rules Addressed to the

Member States 6.98 (a) The Double Function of Article 106(1) 6.98

(i) Article 106(1) as a 'Reminder' of Prohibitions 6.99 (ii) 'Lifting theVeil' 6.100

(b) Article 106( 1) in Combination with the Rules on Free Movement of Goods: Articles 34 and 37 6.104 (i) The General Regime: Measures of Equivalent Effect and Article 34 6.106 (ii) The Special Regime: State Monopolies and Article 37 6.110 (iii) 'State monopolies of a commercial character' 6.111 (iv) Obligations Contained in Article 37 6.112 (v) Obligations Düring the Transitional Period 6.113 (vi) Obligations After the Transitional Period 6.117 (vii) The Borderline Between the General and Special Regimes 6.124

(c) Article 106(1) in Combination with the Rules on Freedom to Provide Services and on Establishment: Articles 49 and 56 6.126 (i) Article 106(1) in Combination with Article 56 6.127 (ii) Article 106(1) in Combination withArucle49 6.129 (iii) Obligation to Select the Operator of a Public Service Concession

Through a Competitive Tender 6.133 (iv) Need for a Cross-Border Element 6.134

(7) Direct Effect 6.135 D. Article 106(2): Services of General Economic lotetest and Other

Public Interest Objectives 6.136 (1) The Undertakings to which Article 106(2) Relates 6.138

(i) Undertakings 6.139 (ii) Undertakings Entrusted With the Operation of Services of General

Economic Interest 6.141 (iii) Services of General Economic Interest 6.144 (iv) Entrustment 6.155 (v) Revenue-Producing Monopolies 6.162

(2) Article 106(2) as an Exception Applicable to the Behaviour of Undertakings and to State Measures 6.163

(3) Conditions for the Application of Article 106(2) 6.167 (i) The Necessity of the Measure 6.168 (ii) The Proportionality Principle 6.169 (iii) The Old Approach: A Strict Interpretation of the

Proportionality Test 6.175 (iv) The Need for a More Flexible Interpretation 6.176 (v) Universal Service asa Justification for Exclusive Rights 6.178 (vi) The Corbeau Case 6.184 (vii) The Almelo Case 6.188 (viii) Other Cases 6.193 (ix) Case law of the General Court 6.198 (x) Need for an Economic Analysis 6.207 (xi) The Dynamic Character of Proportionality 6.208 (xii) Different Approaches Depending on the Sector 6.209 (xiii) The Strict Approach and the Flexible Approach 6.210

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(xiv) Universal Services and Other Services of General Economic Interest 6.212

(xv) Examples of Measures Considered Non-Proportional 6.213 (xvi) The Interest of the EU 6.214

(4) Invocation of Article 106(2) and Bürden of Proof 6.216 (5) Relationship between Article 106(2) and Other Exceptions 6.218

(i) 'Mandatory Requirements' Within the Framework of Article 106(2) 6.218

(ii) Article 101(3) 6.221 (6) Relationship between Article 106(2) and Article 14 6.222

E. Article 106(3): Procedura! Rules Applying to Anti-Competitive State Measures 6.228 (1) Article 106(3) Decisions 6.229

(i) General Issues 6.229 (ii) Analogy With Other Procedures 6.230 (iii) Discretionary Character of the Procedure Under Article 106(3) 6.231 (iv) Lodging of Complaints and Ex Officio Cases 6.236 (v) Dismissal of Complaints 6.237

(a) The Infringement Procedure 6.242 (i) Interim Measures 6.242 (ii) Letter of Formal Notice 6.243 (iii) The Rights of the Member State and of the Undertaking that

Benefits from the Measure 6.244 (iv) End of the Procedure Without a Formal Decision 6.245 (v) The Formal Decision and Its Effects 6.246 (vi) Binding Effects 6.248 (vii) Action for Annulment Against an Article 106(3) Decision 6.249 (viii) Action for Failure to Implement an Article 106(3) Decision 6.250

(2) Article 106(3) Directives 6.252 (i) Preventive Functions of Article 106(3) Directives 6.252 (ii) Article 106(3) Directives as Instruments for Detecting Future

Infringements 6.256 (iii) Article 106(3) Directives as Instruments for 'Specifying' the

Provisions of the Treaty 6.257 (3) Legal Regime of Article 106(3) Directives 6.260

(i) The Exclusive Competence of the Commission 6.260 (ii) Limits to the Commission's Competence 6.261 (iii) Article 106(3) Directives Cannot Deal With the Autonomous

Behaviour of Undertakings 6.262 (iv) Formal Limits to the Commission's Power under

Article 106(3) 6.263 (v) Binding Effects 6.265 (vi) Lack of Direct Effect 6.266 (vii) Relationship Between Directives Under Article 106(3) and

Harmonizing Directives 6.267 (viii) Article 106(3) Overlaps With Other Treaty Provisions 6.268 (ix) Article 106(3) Overlaps with Article 14 6.269 (x) The Dissuasive Role of Article 106(3) 6.271

xxxviii

II SPECIFIC PRACTICES

7. Horizontal Cooperation Agreements Matthew Bennett, Francisco Enrique Gonzalez Diaz, Henning Leupold, Anna Vernet, andDonncadh Woods A. Introduction 7.01

(1) Definition of Horizontal Agreements and Practices 7.01 (2) Background to Horizontal Agreements and Practices 7.02

B. Assessment of Horizontal Cooperation Agreements under Article 101 7.07 (1) Purpose and Scope 7.07 (2) Framework of Analysis 7.18

C. Joint Ventures Involving Joint Control 7.29 (1) Definition and Constitution ofa Joint Venture 7.29

(a) Definition 7.29 (b) Constitution ofa Joint Venture 7.30

(2) Distinction Between Cooperative and Concentrative Joint Ventures 7.37 (3) The Rationale Behind the Difference in Treatment Between Full-Function

Concentrative and Full-Function Cooperative Joint Ventures 7.39 (4) The Application of Article 101(1) by the Commission to Cooperative

Joint Ventures Prior to the Entry into Force of the 1997 Amendment to the First Merger Regulation 7.51

(5) The Notion and Role of Potential Competition in Assessing the Validity of Joint Ventures under Article 101 7.66

(6) Conditions Leading to the Incentive to Coordinate (Spillover Effects) 7.78 (a) Introduction 7.78 (b) Spillovers on the Same Market As That of the Joint Venture 7.85 (c) Spillovers on to Other Markets 7.92

(i) Spillovers on to Downstream Markets 7.93 (ii) Spillovers on to Adjacent Product Markets 7.95 (iii) Spillovers on to Adjacent Geographie Markets 7.98

(d) Network Effects 7.99 (7) Direct Contractual Restrictions Between Patents 7.103 (8) Intra-Group Agreements and Joint Ventures 7.105 (9) Spillovers under the Merger Regulation 7.123

D. Research and Development Agreements 7.143 (1) Overview 7.143 (2) Horizontal Cooperation Guidelines 7.145

(a) Relevant Markets 7.145 (b) Calculation of Market Shares 7.149 (c) Competitive Assessment under Article 101(1) 7.154 (d) Competitive Assessment under Article 101(3) 7.158 (e) Time of Assessment 7.159

(3) TheRkDBER 7.162 (a) Background and Overview 7.162 (b) Key Concepts of the R&D BER 7.168

(i) Article 1 of the R&D BER: Definition: 7.169 (ii) Article 2 of the R&D BER: Scope of Application 7.185 (iii) Article 3 of the R&D BER: Positive Exemption Criteria 7.188

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Contents

(iv) Article 4 of the R&D BER: Market Share Threshold and Duration ofExemption 7.197

(v) Article 5 of the R&D BER: Hardcore Restrictions 7.206 (vi) Article 6 of the R&D BER: Excluded Restrictions 7.222 (vii) Article 7 of the R&D BER: Application of the Market Share

Threshold 7.227 E. Production Agreements 7.235

(1) Introduction 7.235 (2) Horizontal Cooperation Guidelines 7.238

(a) Main Changes Compared to the 2001 Text 7.238 (b) Scope 7.239 (c) Relevant Markets 7.242

(3) Competitive Assessment under Article 101(1) 7.244 (a) Main Competition Concerns 7.244 (b) Restrictions of Competition by Object 7.246 (c) Restrictions of Competition by Effect 7.248 (d) Safe Harbour 7.264

(4) Competitive Assessment under Article 101(3) 7.266 (5) The Specialisation BER 7.269

(a) Background and Overview 7.269 (b) Key Concepts of the Specialisation BER 7.276

(i) Article 1: Definitions 7.277 (i) Specialization Agreement: Article l(l)(a) 7.278 (ii) Unilateral Specialization Agreement: Article l(I)(b) 1.113 (iii) ReciprocalSpecialization Agreement: Article 1(1)(c) 7.281 (iv) Agreements on Joint Production: Article l(l)(d) 7.282 (v) Agreement: Article 1(1) (e) 7.283 (vi) Product:Article l(l)(f) 7.284 (vii) Production: Article l(l)(g) 7.285 (viii) The Preparation of Services: Article 1(1)(h) 7.286 (ix) Relevant Market: Article l(l)(i) 7.287 (x) Specialization Product: Article 1(1)(j) 7.288 (xi) Downstream Products: Article l(l)(k) 7.289 (xii) Competing Undertaking: Article l(l)(l); Actual

Competitor: Article 1(1)(m); and Potential Competitor: Article /(%) 7.290

(xiii) Exclusive Supply Obligation: Article l(l)(o) 7.292 (xiv) ExclusivePurchase Obligation: Article 1(1)(p) 7.293 (xv) Joint: Article l(l)(q) 7.294 (xvi) Distribution: Article 1(1)(r) 7.295 (xvii) Undertaking, Parties, and Connected Parties: Article 1(2) 7.296

(ii) Article 2: The Exemption—Scope of Application 7.298 (i) Assignment or LicensingoflP Rights 7.301

(iii) Article 3: Market Share Threshold 7.303 (i) The Different Market Share Thresholds 7.304

(iv) Article 4: Hardcore Restrictions 7.308 (i) Price-Related Restrictions: Article 4(a) 7.310 (ii) Limitation of Output or Sales: Article 4(b) 7.311 (iii) The Allocation ofMarkets and Customers: Article 4(c) 7.315

(v) Article 5: Application ofthe Market Share Thresholds 7.316

xl

ff) 7.317 (vi) Article 6: Transitional Period 7.321 (vii) Article 7: Period ofWidity 7.322

F. Joint Selling Agreements 7.323 (1) Introduction 7.323

(a) Definition 7.323 (b) Potential or Actual Competitors 7.325 (c) Consortia 7.327 (d) Main Competition Issues 7.328

(2) Application of Article 101(1) to Joint Selling Agreements 7.329 (a) Restrictions of Competition By Object 7.329 (b) Restrictions of Competition By Effect 7.330 (c) Safe Harbour 7.333

(3) Factors Addressed in Commission Decision: and the Guidelines 7-335 (a) Market Structure; Oligopolistic Markets 7.336 (b) Market Entry 7.341 (c) Price Restrictions 7.342 (d) Output Restrictions 7.344 (e) Exclusivity Clauses 7.347 (f) Collusion 7.352

(4) Application of Article 101(3) to Joint Selling Agreements 7.354 (a) EfEciencies 7.354 (b) Specific Circumstances Allowing for an Exemption of Price Fixing 7.359

G. Joint PurchasingAgreements 7.362 (1) Introduction 7.362

(a) Definition 7.362 (b) Relevant Markets 7.364 (c) Potential or Actual Competitors 7.367 (d) Main Competition Issues 7.369 (e) Buying Power 7.371

(2) Application of Article 101(1) to Joint Purchasing Agreements 7.375 (a) Restrictions of Competition By Object 7.375 (b) Restrictions of Competition By Effect 7.377 (c) Safe Harbour 7.378 (d) Collusive Outcome 7.382

(3) Factors Addressed in Commission's Guidelines and Decisions 7.384 (a) The Existence ofDownstream Market Power 7.385 (b) The Existence ofUpstream Market Power 7.391 (c) Measurement ofBuyer Power 7.393 (d) SMEs 7.398 (e) Countervailing Power ofStrong Suppliers 7.399 (f) Exclusive Purchasing Obligations 7.400

(4) Application of Article 101(3) to Joint Purchasing Agreements 7.404 H. Information Exchange Agreements 7.407

(1) Introduction 7.407 (2) Main Competition Issues 7.412

(a) Information Exchanges May Facilitate Coordination 7.413 (b) Information Exchanges ThatExclude Competitors 7.422 (c) Competition Issues Absent Coordination or Exclusionary Concerns 7.424

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Contents

(3) Potential Benefits 7.427 (a) Enhanced Consumer Transparency 7.429 (b) Enhanced Allocative Efficiencies 7.432 (c) Reduction in Asymmetrie Information Problems 7.435 (d) Benchmarking 7.437

(4) Criteria for Assessment 7.438 (a) Restrictions of Competition By Object 7.439 (b) Meaning ofFuture Intentions 7.442 (c) Frequency as a Determinative Criteria for Object Assessment 7.445 (d) Cartel Agreements vs Exchange of Information Agreements 7.446 (e) Concerted Practices 7.448

(5) Assessment ofLikelyor Actual Effects 7.455 (a) Characteristics of Relevant Market 7.457

(i) Degree of Concentration 7.458 (ii) Stability ofSupply and Demand 7.464 (iii) Symmetrie Costs and Market Structures 7.466 (iv) Frequency ofFirms'Interactions 7.468 (v) Barriers to Entry 7.469

(b) Characteristics of Information Exchanged 7.471 (i) Coverage of Relevant Market 7.471 (ii) Strategie Significance of Information 7.474 (iii) Public vs Non-Public Information 7.478 (iv) Exchanges Made Publicly vs Exchanges Made Non-Publicly 7.482 (v) Degree of Aggregation 7.484 (vi) AgeofData 7.491 (vii) Frequency of Exchange 7.497

I. Standardization Agreements 7.498 (1) Introduction 7.498 (2) Recent Investigations in the Area of Standard-Setting Agreements 7-501 (3) Agreements on Standards under the 2010 Horizontal

Cooperation Guidelines 7-510 (a) Definition 7-510 (b) Relevant Markets 7.511 (c) Theories of Harm 7.512 (d) When Could There Be a Restriction By Object? 7.516 (e) The Safe Harbour Principles 7. 517 (f) FRAND Benchmarks 7.526 (g) Effects-Based Assessment 7.528 (h) Article 101(3): Efficiencies 7.534

]. Standard Terms 7.538 (1) Introduction 7.538 (2) Standard Terms under the 2010 Horizontal Cooperation Guidelines 7.539

(a) Relevant Markets 7.540 (b) Theories of Harm 7.541 (c) Restriction By Object 7.542 (d) Effects-Based Assessment 7.543 (e) Efficiency Gains 7.548 (f) Indispensability 7 549 (g) Pass-On to Consumers 7.550 (h) No Elimination of Competition 7 551

xlii

8. Cartels A&*6, dM^-EKWw^Az/b&frr

Introduction 8.01 (1) Definition 8.01 (2) The Per Se Prohibition of Cartels in EU Competition Law 8.03 (3) Harm Caused by Cartels 8.05 Typology of Cartel Arrangements and Common Features of Collusion 8.07 (1) Typology of Cartel Arrangements 8.07

(a) Direct or Indirect Fixing of Purchase or Selling Prices or Any Other Trading Conditions 00

o

00

(i) Uniform Prices and Price Formulae 8.09 (ii) Minimum Prices 8.11 (iii) 'Target' Prices 8.12 (iv) Recommended Prices 8.13 (v) Discussion of Prices for Individual Customers/Customer Lists 8.14 (vi) Agreement on Part of the Price or on Price Supplements 8.15 (vii) Maximum Rebates 8.16 (viii) Agreements on Other Trade Conditions 8.17 (ix) Agreement on the Purchase Price of Raw Materials 8.18 (x) Coordinated Price Increase 'Campaigns' 8.19

(b) Limitation or Control of Production, Markets, Technical Development, or Investment 8.22 (i) Production or Sales Quotas 8.23 (ii) Other Types ofjoint Limitation or Control of Production 8.24 (iii) The Control or Limitation of Commercial Investment 8.25 (iv) Collusive Product Specialization 8.26 (v) Channelling Output/Grant of Reciprocal Selling Rights and Joint

Sales Arrangements 8.27 (vi) Standard Setting 8.28 (vii) Other Practices Limiting Production orTechnological Development 8.29

(c) Sharing of Markets, Customers, or Sources of Supply 8.30 (i) Allocation of Market Shares 8.31 (ii) Allocation ofTerritories or Distribution Channels 8.32 (iii) Allocation of Customers and Other Customer-Specific Practices 8.33 (iv) BidRigging 8.36 (v) Sharing Sources of Supply 8.37

(d) Coordinated Boycotts, Bans on Imports, Concerted Refusal to Deal 8.38 (i) Keeping Competitors Away From the Cartels Market 8.39 (ii) Placing Certain Competitors at a Competitive Disadvantage 8.40 (iii) Boycott ofReluctant Undertakings 8.41

(e) Exchange of Commercially Sensitive Information/Unilateral Signalling/ Hub-and-Spoke Cartels 8.42 (i) Exchange of Information 8.42 (ii) Focusing on the 'Object' 8.43 (iii) The 2010 Horizontal Cooperation Guidelines 8.44 (iv) Collusion With Only an Indirect Effect on Prices Also Prohibited 8.45 (v) Form of Collusion is Immaterial if Object is Established 8.46 (vi) Information Exchanges Illicit Based on Evidence of 'Effect'? 8.47 (vii) Conclusion as to Information Exchange 8.48

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Contents

(viii) Unilateral Signalling 8.49 (ix) 'Hub-and-Spoke'Cartels 8.50

(f) The Problem of 'Tacit Collusion' 8.51 (i) The Theory of Tacit Collusion 8.51 (ii) Does Tacit Collusion Amount to Cartel Behaviour? 8.52 (iii) Conclusion on Tacit Collusion 8.55

(g) Assessment of Cartels under Article 101(3) 8.56 (2) Common Features of Collusion 8.57

(a) Factors Conducive to the Establishment of Cartels 8.58 (i) Oligopolistic Markets 8.59 (ii) Collusive Business Values and Established Communication

Channels 8.60 (iii) ExogenousTriggering Events 8.62 (iv) The Determining Role ofInstigators 8.63

(b) Organizational Aspects of Cartels 8.64 (i) Regulär Meetings 8.65

(i) From Informal Contacts to Highly InstitutionalizedSchemes 8.66 (ii) Multiple WorkingLevels 8.67 (iii) Pre-Meetings'and Ad Hoc Meetings' 8.68

(ii) The Role of Trade Associations and Fiduciary Companies and Their Liability 8.70

(i) Liability of Trade Associations in Earlier Cases 8.71 (ii) Towards a Discretionary Approach in Trade Association Liability 8.72 (iii) Addressing the Role Played by Certain Fiduciary Companies in

Facilitating Collusion: Earlier Cases 8.73 (iv) Towards a Systematic Sanctioning of Facilitating Companies as

Co-Perpetrators 8.74 (iii) Concealment Measures 8.75

(i) Covering the Cartel's Tracks 8.76 (ii) Paperless Policy 8.77 (iii) Storing CartelDocuments in Private Homes 8.78 (iv) Using Code Names 8,79 (v) Other Measures 8.80

(c) Running the Business of Collusion 8.81 (i) Managing the Elimination of Competition 8.82

(i) Getting Other Market Operators on Board 8.82 (ii) Achieving Comparability ofthe Products 8.83 (iii) Collection ofData and Circulation ofDetailed Implementation

Documents 8.84 (iv) 'Coordinators'and MarketLeaders' 8.85

(ii) Enforcing Cartel Arrangements between the Participants 8.87 (i) MonitoringSchem.es 8.88 (ii) Penalties and Compensation Measures 8.89 (iii) Threats, BoycottsandCoordinatedAttackson Competitors 8.90

(iii) The Instability of Collusive Schemes 8.91 (i) Claims for Higher Quotas 8.92 (ii) MutualSuspicion ofCheating 8.93 (iii) Leniency Programmes as an Additional Factor of Instability 8.94

C. Investigating Hardcore Cartels 8.95 (1) The Initiation of a Case: Information Sources 8.95

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Contents

(a) Market Monitoring and Information From Other Investigations 8.96 (i) Sector Inquiries 8.99

(b) Information Received From Other Authorities 8.100 (i) Pre-Investigation Exchanges of Information within the European

Competition Network 8.100 (ii) Exchange of Information with Third Counoy Authorities 8.101

(c) Compiaints (Formal and Informal) 8.103 (d) Informants/Whistleblowers 8.104 (e) Applications under the Leniency Notice 8.105

(2) Leniency: Inducing Insiders to Break Rank 8.106 (a) Rationale and Origins of the EU Leniency Policy 8.106

(i) The Problem ofDetecting and Deterring Cartel Behaviour 8.106 (ii) Difficulties in Detecting and Proving Cartels 8.107 (iii) The Rationale for a Leniency Policy: The Prisoner's Dilemma 8.108 (iv) Introduction and Development of the Commission's

Leniency Policy 8.109 (v) Temporal Scope of the Notices 8.110 (vi) Structure 8.111

(b) The 2002 and 2006 Leniency Notices and the Reasons for Revision of the 1996 Policy 8.112 (i) Content and Application of the 1996 Leniency Notice 8.112

(i) Basic Principles 8.112 (ii) Section B: 75-100 Per Cent Reduction (TotalExemption) in

the Fine 8.113 (iii) Section C: 50-75Per Cent Reduction in the Fine 8.114 (iv) Section D: Reductions of 10—50 Per Cent of the Fine 8.115 (v) Retraction ofNon-Contestation 8.119 (vi) ProceduralAspects (Section E) 8.120

(ii) Issues Regarding the Eifectiveness of the 1996 Leniency Notice 8.121 (iii) The 2002 Leniency Notice and its 2006 Revision 8.122

(i) Principles Governing the 2002 Revision ofthe 1996 Leniency Notice 8.122

(ii) Changes Introducedin the2006Leniency Notice 8.129 (iii) Content and Implementation of the 2002 and2006Leniency

Notices 8.131 (iv) Criteria for immunity under the 2002 and 2006

Leniency Notices 8.133 (i) Substantive Tests 8.133 (ii) The Scope ofthe Leniency Policy: Are Stand-Alone Concerted

Practices Covered? 8.139 (iii) Only One Immunity Per Cartel 8.140 (iv) Other Conditions Which Must Be Satisfied in Order to Qualify

for Immunity 8.141 (v) Procedural Aspects 8.150

(v) Reduction in the Fine under the 2002 and 2006 Leniency Notices 8.175 (i) Substantive Tests 8.176 (ii) Available Bands of Reduction and Relevant Criteria 8.181 (iii) Procedural Aspects 8.184 (iv) Non-Contestation ofFacts is Not Rewarded Under the 2006

and2002 Leniency Notices 8.195 (%) ' 7«f.' 8.196

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Contents

(vi) Judicial Review of the Commission's Leniency Policy Under the 2002 and 2006 Notices 8.210

the 2002 Leniency Notice 8.211 (ii) Legality of the Leniency Notice 8.212 (iii) The Commission's Discretion in the Assessment of Leniency

Applications 8.213 (iv) Limits to the Commission's Discretion: Manifest Error 8.214 (v) Leniency andEqualTreatment 8.215 (vi) Cooperation Under the Leniency Notice Must Be Dijferentiated

from Cooperation as an Attenuating Circumstance' 8.216 (vii) Protection of Information Submitted Under the 2002 and 2006

Leniency Notices and Incentives for Applications 8.217 (i) A SensitiveAspect of the Commission's leniency Policy 8.217 (ii) Identity oflmmunity Applicants 8.218 (iii) Limitations in the Conditions of Access to Corporate Statements 8.220 (iv) Consequences ofViolation ofthe Limitation Imposed in Respect

of Access to the File 8.221 (v) Leniency and Public Access to Documents 8.222 (vi) Can Leniency Documents be Protectedfrom Public Access? 8.224 (vii) Communication of Leniency Documents to Other Enforcement

Authorities 8.225 (viii) Disclosure of Leniency Documents in Civil Litigation 8.226

(c) Leniency and Settlements 8.229 (i) Leniency and Settlements are Complementary in Nature 8.230 (ii) The Reductions Granted Under Each Policy are Cumulative 8.231 (iii) Interactions Between Leniency and Settlements 8.232

(d) Leniency within the ECN 8.233 (i) Advantages of the New System and Measures Taken to Tackle

Potential Risks 8.234 (ii) Leniency Applications and Article 11 of Regulation 1/2003 8.237 (iii) Leniency Applications and Article 12 of Regulation 1/2003 8.238 (iv) Guarantees to be Provided by the Receiving Authority 8.239 (v) Guarantees Regarding Information Relating to Individuais 8.240 (vi) Binding Nature of the Policy Set Out in the Network Notice 8.241 (vii) Leniency Applications and Transmission of Information to

National Courts 8.242 (viii) Where (Best) to File a Leniency Application within the ECN 8.243 (ix) Favouring Convergence: The ECN Model Leniency

Programme 8246 (x) A Significant Tool of Convergence: The 'Summary Application

Syst«™ 8247 D. The Commission's Powers of Investigation: Information Requests,

Interviews, Inspections g 248 (1) Preliminary Observations 8 248

(a) Documented Evidence as the Principal Basis for Commission Cartel Decisions 8 251

(b) Applicability to the Transport Sector 8 252 (c) Relevanceof Interpretation Under Regulation 17 8.253 (d) Outline for Discussion 8 254

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Contents

(2) General Aspects of the Commission's Fact-Finding Powers 8.255 (a) Principles of Law and Fundamental Rights Applicable to Commission

Investigations 8.255 (i) The Applicability of General Principles of Law and Fundamental

Rights 8.255 (ii) General Principles and Fundamental Rights Particularly Relevant

to Cartel Investigations 8.256 (b) The Rights of Defence 8.257

(i) The Privilege Against Supplying Self-Incriminating Information 8.258 (i) An EU Competition Law Version ofthe Right to Remain Silent' 8.258 (ii) Compatibility ofthe Right Against Selflncrimination as

Established in Orkem with the ECEIR and its Case Law 8.262 (iii) Precise Scope ofthe Privilege Against Self-Incrimination: The

Elements of'Compulsioriand Ädmission' 8.263 (iv) Pre-Existing Documents and FactualInformation Must

Be Supplied 8.265 (ii) Legal Professional Privilege 8.269

(i) The Right to the Protection ofLawyer-Client Correspondence 8.269 (ii) Scope ofLPP under EU Law 8.271 (Iii) Summaries ofExternal Advice Prepared by In-House Counsel

May Be Protected 8.275 (iv) The Commission ls NotPermitted to Reada Documentfor

Which Legal Privilege is Claimed 8.276 (v) Procedure for Claiming Legal Privilege 8.278 (vi) 'Cursory Look'andEnvelope Procedure in Inspections 8.279 (vii) Role ofthe Hearing Officer 8.282

/WwVfgü' 8.283 (iii) The Right to Legal Assistance 8.284 (iv) The Right to be Informed on the Subject Matter and Purpose of

the Investigation 8.285 (v) No Right to be Heard Prior to Investigative Measures 8.286

(c) Other General Features of the Commission's Investigative Powers 8.287 (i) Application of the Principle of Proportionality:

Practical Implications 8.287 (i) The Investigative Actio n Must Be Proportionate to the

GoalPursued 8.287 (ii) 'Necessity' 8.288 (iii) 'The Principle of Proportionality and the Quantity of

8.289 (ii) The Content and Form of Information/Business Records That

May Be Requested 8.290 (i) Content 8.291 (ii) Form 8.292

(iii) The Undertakings From Which Information May Be Sought: Suspected Cartel Participants As Well As Other Parties 8.293

(iv) The Territorial Scope of the Commission's Investigation Powers 8.294

A&Mfr /«rWKtW w 8.296 j'offrMgwfy 8.297

(v) The Timing of Any Investigative Steps/Application of Limitation Periods 8.300

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Contents

(vi) The Duty of Active Cooperation and its Implication for Requests for Information and Inspections 8.301

(d) Requests for Information: Article 18 8.302 (i) The Use of Requests for Information in Cartel Cases 8.302 (ii) Two Types of Request for Information: 'Simple Requests' and

'Requests by Decision' 8.305 (i) Procedura!. Requirements: The Duty to State the Legal Basis and

Purpose ofthe Request and to Set a TimeLimit 8.306 (ii) Sanctionsfor Late, Incomplete, Incorrect, or Misleading Repkes 8.307 (iii) Incomplete or UntruthfulReplies are Considered to Obstruct the

Investigation 8.310 (iv) Article 18 Requests, the Duty of Cooperation, and Reductions of

Finesfor Voluntary Suhmissions 8.311 (v) Various Other AspectsofRequests for Information 8.312

(e) Interviews (the Power to Take Statements): Article 19 8.316 (i) Rationale 8.316 (ii) Legal Basis 8.318 (iii) Possible Interviewees: Natural and Legal Persons 8.319 (iv) Procedura! Aspects and Rights of the Interviewee 8.321

(f) Inspections of Business Premises: Article 20 8.322 (i) The Difference Between 'Announced' and 'Unannounced'

Inspections 8.327 (ii) General Aspects Common to Inspections by Authorization and

Inspections by Decision 8.330 (i) Commission Inspections and the Principle of the Protection of

the Private Sphere ofthe Undertaking 8.331 (ii) Determining theAddressee of an Inspection Decision: The

Notion of'Undertaking'for the Purpose of Inspections 8.334 (iii) Notification of the Inspection Decision 8.337 (iv) The Commission's On-the-Spot Powers 8.339 (v) 'To enter anypremises, landand means oftransport of

undertakings and associations of undertakings' 8.343 (vi) 'Means of transport of undertakings' 8.346 (vii) 'To examine the books and other records related to the business,

irrespective ofthe medium on which they arestored' 8.347 (viii) 'To take or obtain in any form copies ofor extractsfrom such

books or records' 8.354 (ix) 'To seal any business premises and books. or records for the period

and to the extent necessary for the inspection' 8.358 (x) 'To ask any representative or member ofstaff of the undertaking

or aaofWo« egpJbmwMw (^6%* or rrfkÄng % (Ar of

inspection andto recordtheanswer' 8.362 (iii) Other Practical Aspects Relating to Inspections 8.375

ßj /Wa&rr /wpff&w 8.375 (ii) Activity oflnspectors Düring the Inspection 8.377 (iii) Right to LegalAssistance 8.379 (2%) M ab ^(O &Wf# (or 06#r%ff) an

Inspection by Decision 8 380 (v) Commission Present Düring Normal Business Hours 8.381

xlviii

(vi) Protocols Made Up Düring an Inspection and the Possibilities for Submitting Exculpatory Information 8.382

(wi) 8.383 (viii) Treatment of Business Secrets and Confidential Information 8.384 (*%) 8.385 (x) Post-Inspection Procedure 8.387

(iv) The Adoption of Inspection Decisions under Article 20(4) 8.388

Decisiott 8.388 (ii) Procedural Formalities Relating to the Adoption of Inspection

Decisions 8.394 (v) Additional Substantive and Procedural Aspects of Inspections by

Written Authorization (Announced Inspections) 8.396 (i) Substantive Elements ofthe Authorization 8.397 (ii) Prior Notice To—Not Consultation Of—the Member State

CoMCMTza/ 8.398 (vi) Opportunines to Challenge the Inspection Decision and/or the

Use of the Evidence Collected in Inspections 8.399 (%) ZzfAb AiKAcfyär Azo» fro/M

GoingForward 8.399 (ii) Challengingthe Admissibility and Use of Evidence Collected 8.400

(vii) The Role of the Member States in Commission Inspections under Article 20 8.403 (i) GeneralDuty to Provide Assistance 8.403 (ii) Role in Case of Opposition 8.404 (iii) Review by National Courts is Limited to the Arbitrariness and

Proportionality ofthe Coercive Measures 8.405 (wj Cofrnz/f JWg&ww Gz» fo LWk- A&AÖMd/

Law—Even Against Private Persons 8.406 (viii) Inspections Carried Out by the Competition Authorities of the

Member States on Behalf of the Commission: Article 22(2) 8.407 (z) are

Inspections When Requested 8.409 (ii) Inspections Under Article 22 are Executed Under National Law 8.410 (iii) Commission Ojficials May Participate in the Inspection

Carried OutBy the Member State 8.411 (g) Inspections on Other Premises (Private Homes): Article 21 8.412

(i) Rationale and Use 8.412 (%) 8.413 ßi) 8.414

Premises 8.415 (z^ Ow/y To Bf z» Gw ^Sfrzoz(f Vzo/kfzow' 8.416

(ii) Legal Framework 8.417 ^f^wz'rg^/or a» /»ipfcAo» «»dbr

Article 21 8.417 (iii) Procedural Aspects 8.419

(i) The Commission Decision 8.419 (%) 8.420 (zz'z) 8.421 ß'%) Dfcwz'o» zÄf_/Wzcza/v4MfÄonzaÄo« 8.422

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(v) On-Tke-Spot Powers 8.423 (vi) Assistance by Officials From the NationalAuthorities 8.424 (vii) Sanctionsfor Non-Compliance, Pursuant to National Law 8.425

(iv) Other Aspects 8.426 (i) Right to Legal Assistance 8.426 (ii) A Duty of Active Cooperation for the Addressee? 8.427

(h) European and International Cooperation in Cartel Investigations 8.428 (i) European Cooperation 8.429

ß) T&ffCN 8.429 (ii) Cooperation with the ESA 8.433

(ii) International Cooperation, Multilateral and Bilateral 8.434 (i) Multilateral Cooperation 8.435 (ii) Bilateral Cooperation 8.441

E. Evidence in Cartel Cases 8.445 (1) Introduction 8.445 (2) What Needs to be Proven 8.449

(a) The Concept of Cartel Offence 8.449 (b) The EU Courts' Purposive View of What Consritutes Illegal 'Cartel'

Behaviour 8.450 (c) Agreement vs Concerted Practice 8.451 (d) Cartels are Infringements By Object: No Need to Prove Actual Effects 8.452 (e) No Market Definition Required 8.453 (f) No Need to Demonstrate the Precise Mechanism By Which the

Restrictive Object was Attained 8.454 (g) No Requirement to Prove Subjective Intent 8.455 (h) Complex Infringement 8.456 (i) Single and Continuous Infringement 8.457

(i) Liability for a Single and Continuous Infringement 8.45 8 (ii) Consequences of Lack ofAwareness of the Overall Conduct 8.459 (iii) 'Single' and 'Continuous' 8.460 (iv) The'Single'Nature of an Infringement 8.461 (v) The'Continuous'Nature of an Infringement 8.463 (vi) The'Repeated'Nature of an Infringement 8.464 (vii) Duration of an Undertakings Participation in an Infringement 8.465

(3) The Bürden of Proof 8.466 (a) The Bürden of Proof on the Commission 8.466 (b) 'Shifting' of the Bürden of Proof 8.467

(4) The Standard of Proof 8.469 (a) The EU Courts' Reluctance to Use the Term 'Standard of Proof' 8.469 (b) What Matters is the Balance of Evidence asaWhole 8.470

(5) Admissibility of Evidence 8.471 (a) Evidence Collected or Used in Contravention of General Principles

Fundamental Rights is Not Admissible 8.473 (i) Information Covered by Legal Privilege 8.474 (ii) Self-Incriminating Information 8.475 (iii) Evidence on Which the Undertakings Have Not Been Heard is

Inadmissible 8.476 (b) Documents Obtained in an Inspection That Turned Out to be

Unlawful are Inadmissible 8.477 (c) Documents Which Do Not Fall Within the Scope of an Inspection

Decision are Inadmissible 8.478

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(d) Confidential Information is Admissible as Evidence 8.479 (e) Evidence Provided Orally is Admissible 8.480 (f) Anonymous Evidence Can Be Admissible 8.481 (g) Lack of Cross-Examination ofWitnesses Does Not Render Their

Statements Inadmissible 8.482 (6) Probative Value of Evidence 8.484

(a) Whether, On Its Face, the Evidence Appears Sound and Reliable 8.487 (b) The Time When the Evidence Came Into Being 8.488 (c) The Level of Detail of the Evidence 8.489 (d) The Source of the Information Has Direct Knowledge 8.490 (e) Evidence Which Goes Against the Interests of the Source Providing it

has Greater Probative Value 8.491 (f) Evidence From an Undertaking That Has Resolved to Cooperate With

the Investigation Has High Probative Value 8.493 (g) Evidence Provided Where There is a Risk of Sanction 8.494 (h) Evidence Provided After Mature Refiection is More Credible 8.495 (i) Evidence or Statements Provided by Executives of Companies are of

Greater Probative Value 8.496 (j) Evidence Supplied by One Entity May Be Used Against Another 8.497 (k) Motives of the Witness 8.499 (1) Information Provided by Applicants for Immunity or for a Reduction

of Eines 8.500 (m) Anonymous or Unidentified Sources of Evidence 8.501

(7) Types of Evidence 8.502 (a) Documentary Evidence 8.504 (b) Oral Evidence 8.506

(i) Qualified Obligation to Hear Witnesses 8.506 (ii) Traditional Reliance on Documentary Evidence: Increased Use of

Oral Evidence 8.507 (c) Direct and Indirect (Circumstantial) Evidence 8.509 (d) When is Corroboration Necessary? 8.510 (e) Economic Evidence 8.512

(i) The Use of Economic Evidence as an Exculpatory Factor 8.514 F. Establishing Liability 8.515

(1) The 'Undertaking' as the Infringing En tity 8.515 (2) Attribution of Liability to the Undertaking as aWhole: Underlying Reasons 8.519 (3) Principal Grounds for Liability 8.521

(a) Patent Company Liability: The Concept of the 'Actual Exercise of Decisive Influence' 8.525 (i) The Parent Companys Shareholding in the Subsidiary 8.527

(?) W/W/y CWW f»rvi/wzojf WW/y f&r 8.528

OzwW Zw 700 Ar Cwzf the Parent 8.530

(%) 8.531 (ii) The Articles of Association/Statutes 8.532 (iii) The Parent Entity Being Active on the Same or Adjacent Markets 8.533 (iv) The Use of the Same Commercial Name By the Parent and

Subsidiary 8.534 (v) Instructions From a Parent Company to a Subsidiary 8.535 (vi) Functional Links Through Personnel 8.536

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(vii) The Attitüde of the Patent Company Düring the Administrative Procedure 8.537

(b) Sister Companies 8.538 (4) Liability in Cases ofSuccession 8.539

(a) Cases of Change of Legal Denomination, Resulting in the Dissolution of the Previous Legal Person 8.541

(b) Transfer of a Liable Entity, Which Remains in Existence, To Another Undertaking 8.542

(c) Transfer of Assets/Acdvities to Another Undertaking, the Entity Previously Operating the Business Remaining in Existence 8.543

(d) Transfer of a Legal Entity or of Assets/Activities, the Entity Previously Operating the Business Ceasing to Exist 8.544

(e) Scenarios oflntra-Group Restructuring and Succession 8.545 (5) VoluntaryAcceptance of Liability by the Acquiring Undertaking 8.546 (6) Determination of Liability and the Application of the Leniency Notice 8.547

G. Cartel Fines 8.548 (1) Overview 8.548 (2) The Basic Amount ofthe Fine 8.551

(a) Calculation of the Value of Sales 8.552 (i) General Principles 8.552 (ii) Sales of Products or Services To Which the Infringement Relates 8.554 (iii) Sales in the Relevant Geographie Area Within the EEA 8.557 (iv) Last Füll Year Before the End of the Infringement 8.560

(b) Gravity: The Percentage Applicable to the Value of Sales 8.561 (i) General Principles 8.561 (ii) Nature of the Infringement 8.564 (iii) Geographie Scope 8.567 (iv) Combined Market Share 8.568 (v) Implementation 8.569

(c) Duration of the Infringement 8.570 (i) General Principles 8.570 (ii) Previous Practice 8.572 (iii) Method for Calculating Duration 8.574

(d) Additional Amount 8.578 (i) General Principles 8.578

(e) Conclusionon the Basic Amount 8.581 (3) Individualizing 'Subjective' Responsibility: Aggravating and Mitigating

Circumstances 8.582 (a) Individual Conduct vs Overall Gravity of the Infringement 8.5 83 (b) The Commission is Bound by the Fining Guidelines, But Not By Pr

Decisions g cg^ (c) Method of Calculation When Both Aggravating and Attenuating

Circumstances Apply 8 585 (0 Aggravating Circumstances 8.588

(i) General Principles 8 588 (ii) Repeated Infringements ofthe Same Type by the Same

Undertaking g JCJQ (iii) Refusal to Cooperate With or Obstruction ofthe Commission in

Carrying Out its lnvestigations 8.596 (iv) Role ofLeaderin, orlnstigator ofthe Infringement 8.599

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(v) Steps to Coerce Other Undertakings and/or Retaliatory Measures Against Other Undertakings with a View to Enforcingthe Practices ConstitutingtheInfringement 8.610

(vi) Other Aggravating Circumstances 8.614 (ii) Mitigating Circumstances 8.617

(i) Termination ofthe Infringement As Soon As the Commission Intervenes (Not Applicable to Cartels) 8.618

(ii) Infringement Committedas aResult ofNegligence 8.621 (iii) Substantially LimitedInvolvement in the Infringement 8.622 (iv) Ejfective Cooperation by the Undertaking Outside the Scope of

the Leniency Notice andBeyondIts Legal Obligation To Do So 8.632 (v) Anti-Competitive Conduct Authorized or Encouraged by Public

Authorities or by Legislation 8.638 (vi) Other AcceptedAttenuating Circumstances 8.643 (vii) RejectedArguments 8.649

(4) Specific Increase for Deterrence 8.661 (a) Increase for Undertakings Wirk a Large Turnover 8.662

(i) Concept and Rationale 8.662 (ii) Commission's Practice 8.663

(b) Legality of the Deterrence Multiplying Factor 8.666 (c) Limited Scope of the Duty to State Reasons 8.669 (d) Basis for the Assessment and Level of the Deterrence

Multiplying Factor 8.670 (e) Increase to Exceed the Improper Gains 8.673

(5) Legal Maximum of 10 Per Cent of Annual Group Turnover 8.674 (a) Upper Limit Set By Article 23(2) 8.674 (b) 10 Per Cent of the Total Turnover 8.675 (c) Preceding Business Year 8.676 (d) Application to Each Infringement 8.679 (e) Joint and Several Liability Within the Same Undertaking 8.680 (f) The 10 Per Cent Cap is Calculated Before Leniency 8.681 (g) The 10 Per Cent Cap Applies Only to the Final Amount

(Before Leniency) 8.682 (h) Impact of the Legal Maximum 8.683

(6) Application of the Leniency Notice 8.684 (7) Application of the 10 Per Cent Reduction of the Settlement Notice 8.685 (8) AbilitytoPay 8.686

(a) Inability to Pay Claims Systematically Rejected before 2006 Fining Guidelines 8.687

(b) Application of Inability to Pay Reductionsby the Commission 8.690 (c) Procedure for Inability to Pay Requests 8.691 (d) Commission Analysis of Inability to Pay Claims under the 2006

Fining Guidelines 8.692 (e) Court Review 8.695 (f) Assessment of the Abili ty to Pay Policy 8.696

(9) Other Factors That May Be Taken into Account 8.697 (a) Ad Hoc Adjustments 8.698 (b) Poor Financial Situation and Previous Payment of Fines in Other

Proceedings 8.700 (c) Excessive Duration of Administrative Procedure 8.703

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H. Procedural Aspects of the Adoption of Decisions in Cartel Cases and 'Direct Settlements' 8.704 (1) Main Common Aspects of the Adoption of Cartel Decisions 8.704

(a) The Commission '2011 Best Practices' and Outline of the Procedure Leading to a Decision 8.704 (i) The Adoption of a Cartel Decision Follows a Model That Is

Common For All Commission Decisions 8.704 (ii) General Outline of the Standard Procedure Followed Between the

Fact-Finding Stage and the Final Decision—and the Alternative of the Settlement Procedure 8.705

(iii) The Commission May Halt an Investigation atAny Stage 8.706 (b) Particular Aspects Relating to Access to File in Cartel Cases 8.708 (c) The Statement of Objections and Indications on the Parameters

ofthe Fine 8.709 (d) The Oral Hearing and State of Play Meetings 8.710

(2) Direct Settlements in Cartel Cases 8.712 (a) The Lead Up to the Adoption of the 2008 System of 'Direct

Settlements'in Cartel Cases 8.712 (b) Sequence of the Regulär Procedure and Potential Benefits of the

Settlement Process 8.713 (c) The Main Features of the Settlement System 8.714

(i) Stakes on Both Sides: the Parties and the Commission 8.714 (ii) Not To Be Mistaken for 'Commitment' Decisions 8.715 (iii) Based on a 'Common Understanding' Between the Parties and the

Commission, But Not a Negotiation 8.716 (d) The Settlement Procedure Dissected 8.717

(i) Based on a Füll Investigation 8.717 (ii) Deciding That a Case is Fit for Settlement/ Initial Contact with

the Parties 8.718 (iii) Start of the Settlement Process 8.719 (iv) Three Rounds of Meetings 8.720 (v) Confidentiality of Discussions 8.721 (vi) Formal Settlement Submission, Statement of Objections, Decision 8.722 (vii) Interaction with Leniency 8.723 (viii) Lessons from Settlement Decisions/Hybrid Cases 8.724 (ix) Miscellaneous Aspects 8.725

9. Vertical Agreements Andrei Gurin and Luc Peeperkorn A. Introduction 9.01

(1) Applicability of Article 101 to Vertical Restraints 9.01 (2) Early Application of Article 101 to Vertical Restraints 9.05 (3) Theory of Active/Passive Sales 9.09 (4) System of Block Exemption Regulation: 9.12 (5) Green Paper on Vertical Restraints 9.15 (6) Two Council Regulations Enabling the Adoption of the

Commission's Policy 9.18 (7) A New Type of Block Exemption Regulation and Guidelines 9.28

B. The New Block Exemption Regulation and Guidelines 9.31 (1) Background 9.31

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(2) The DeMinimisNouce 9.38 (3) Agency Agreements 9.40

(a) Introduction 9.40 (b) Agency Agreements in the Vertical Restraints Guidelines 9.44 (c) Agency Agreements and the Internet 9.57

(4) Subcontracting Agreements 9.60 (5) The Underlying Philosophy of the BER and the Vertical Restraints Guidelines 9.61 (6) The Scope of the BER and Guidelines 9.68

(a) Definition of Vertical Agreements 9.68 (b) Vertical Agreements between Competitors 9.72 (c) Vertical Agreements Concluded by Association ofRetailers 9.77 (d) Vertical Agreements Containing IP Rights Provisions 9.81 (e) The Interface Between the BER and Other Block Exemption

Regulations 9.87 (7) Hardcore Restrictions under Article 4 ofthe BER 9.88

(a) Vertical Price Fixing Under Article 4(a) 9.94 (b) Territorial and Customer Sales Restrictions under Article 4(b) 9.112 (c) Selective Distribution Systems and Sales Restrictions under Article 4 9.126 (d) Internet Selling and Sales Restrictions Under Article 4 9.133 (e) The Combination of Selective and Exclusive Distribution 9.139 (f) Aftermarkets 9.145 (g) Individual Assessment of Hardcore Resale Restrictions 9.146

(8) Excluded Restrictions under Article 5 ofthe BER 9.153 (a) Non-Compete Obligations Exceeding Five Years 9.155 (b) Post-Term Non-Compete Obligations 9.160 (c) Boycott Under Selective Distribution 9.162

(9) Transitional Period and ExpiryDate ofthe BER 9.163 (10) Withdrawal of the benefit of the BER 9.164 (11) Disapplication of the BER 9.169 (12) Market Share Thresholds and Market Share Calculation 9.173 (13) The Framework ofAnalysis for Individual Assessment 9.188

(a) Anti-Competitive Effects 9.191 (b) Efficiencies 9.201

C. Analysis of Different Categories ofVertical Restraints 9.214 (1) Single Branding 9.214

(a) Market Position of the Supplier 9.220 (b) Incidence and Duration of the Single-Branding Obligation 9.221 (c) Market Position of Competitors 9.225 (d) Barriers to Entry 9.227 (e) Countervailing Power 9.228 (f) Level ofTrade 9.229 (g) Possible Efficiencies 9.234

(2) Exclusive Distribution 9.235 (a) Supplier's Market Position 9.238 (b) Competitors' Market Position 9.239 (c) Buying Power 9.240 (d) Level ofTrade 9.241 (e) Maturity of the Market 9.242 (f) Combination with Exclusive Sourcing 9.243 (g) Possible Efficiencies 9.244

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(3) Exclusive Customer Allocation 9.245 (4) Selective Distribution 9.248

(a) Qualitative vs Quantitative Selective Distribution 9.249 (b) Quantitative Selective Distribution 9.251 (c) Suppliers Market Position 9.257 (d) Competitors'Market Position 9.258 (e) Barners to Entry 9.260 (f) Buying Power 9.261 (g) Maturity of the Market 9.262 (h) Possible Efficiencies 9.263

(5) Franchising 9.264 (6) Exclusive Supply 9.265

(a) Buyer's Market Share 9.266 (b) Duration of the Agreement 9.269 (c) Competitors'Market Position 9.270 (d) Countervailing Power 9.271 (e) Level of Trade and Nature of the Product 9.272 (f) Possible Efficiencies 9.273

(7) Upfront Access Payments 9.274 (8) Category Management Agreements 9.279 (9) Tying 9.283 (10) Recommended and Maximum Resale Prices 9.291

10. Intellectual Property Kevin Codtes, Lars Kj0lbye, and Luc Peeperkorn A. Introduction 10.01

(1) Overview 10.01 (2) Purpose oflP Rights 10.04 (3) The Relationship between IP Protection and EU Law 10.09

(a) IP Protection and the Free Movement Provisions 10.10 (b) IP Protection and the Competition Rules 10.11

(i) General Approach 10.12 (ii) Block Exemptions 10.14

B. IP Rights and EU Law 10.16 (1) Introduction 10.16 (2) Existence vs Exercise and the Specific Subject Matter of an IP Right 10.19

(a) Existence and Exercise 10.19 (b) Specific Subject Matter 10.21

(3) The Specific Subject Matter oflP Rights 10.22 (a) Patents 10.23 (b) Know-How 10.24 (c) Copyright 10.29 (d) Trademarks 10.32 (e) Plant Breeders'Rights 10.34

(4) Exhaustion of IP Rights 10.36 (a) Exhaustion Requires Consent

(i) Centrafarm v Sterling Drug 10.37 (ii) Consent Does Not Have To Be Explicit 10.39

(b) For a Sale to Exhaust IP Rights It Is Not Necessary for that Sale to be Made in a Jurisdiction Where It Enjoys IP Right Protection 10.40

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(i) Merck v Stephar 10.41 (c) Exhaustion Requires the Consent of the Right Holder Even if the

Goods were Lawfully Put on the Market in Another Member State Without That Consent 10.42 (i) EMI/Patricia 10.43 (ii) Keurkoop/Nancy Kean Gifts 10.44

(d) Exhaustion Requires an Actual Sale 10.45 (e) Exhaustion Depends on the Specific Subject Matter of the Right in

Question 10.46 (i) Warner v Christiansen 10.48

(f) Exhaustion for the Purposes of EU Law Requires Use in tbeEEA 10.51 (g) Exhaustion and Licensing Under the Competition Rules 10.56

(5) Exhaustion Concept in EU IP Legislation 10.58 C. Technology Transfer Agreements 10.59

(1) Introduction 10.59 (2) The Basic Framework and Underlying Philosophy of the TTBER and the

Technology Transfer Guidelines 10.62 (3) The Scope ofthe TTBER and the Technology Transfer Guidelines 10.68

(a) Agreements for the Production of Contract Products 10.69 (b) Technology Transfer Agreements 10.72 (c) The Interface between the TTBER and Other Block Exemptions 10.78

(4) Competitors vs Non-Competitors 10.82 (5) The Hardcore Restrictions 10.92

(a) Price Fixing 10.97 (b) Output Limitations 10.99 (c) Territorial and Customer Sales Restrictions 10.100

(i) Territorial and Customer Sales Restrictions between Competitors 10.101

(ii) Territorial and Customer Sales Restrictions between Non-Competitors 10.108

(d) Restrictions on the Use of Own Technology or to Carry Out R&D 10.112

(6) Excluded Restrictions 10.114 (7) Hie Safe Harbours 10.119 (8) Withdrawal and Disapplication 10.124 (9) Application Outside the Scope of the Block Exemption 10.128

(a) Introduction 10.128 (b) Royalty Obligations 10.133 (c) Exclusive Licences and Sales Restrictions 10.136 (d) Output Restrictions 10.141 (e) Field of Use Restrictions 10.144 (f) Captive Use Restrictions 10.149 (g) Tying and Bundling 10.151 (h) Exclusive Dealing 10.155 (i) Settlements 10.158 (j) Licensing of Future Developments 10.160

(10) Technology Pools 10.161 (a) The Nature of the Pooled Technologies 10.163 (b) Competition Concerns Relating to the Creation of the Pool 10.166 (c) Assessment of Individual Restraints 10.169

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D. Trademark Licences 10.172 (1) Licences and Assignments 10.173

(a) Territorial Protection (b) Prohibition on Competing Products 10.179 (c) No-Challenge Clause: (Ownership) 10.181 (d) No-Challenge Clauses (Validity) 10.182 (e) Prohibition on Sub-Licensing or Assignment 10.184 (f) Quality Control Measures 10.185

(2) Trademark Delimitation Agreements 10.186 (a) Market Partitioning 10.187 (b) Confusion of Marks 10.189

E. Copyright 10.190 (1) EU Directives Relating to Copyright 10.190 (2) Territorial Protection through Exclusive Licences 10.198

(a) Exclusive Territory Does Not Necessarily Infringe Article 101(1) 10.198

(b) Collective Refusals to License 10.202 (c) Specific Subject Matter ofCopyright and Article 101(1) 10.205

(3) Collecting Sociedes 10.207 (a) Artists' Licences to a Collecting Society 10.207 (b) Licensing Agreements Between Collecting Societies 10.209 (c) Licences from Collecting Societies to Manufacturers 10.212

F. Article 102 10.214 (1) Introduction 10.214 (2) IP and Market Definition 10.216 (3) IP and Dominance 10.225 (4) Abuse 10.228

(a) Refusals to License IP Rights 10.230 (i) The IBM Undertaking 10.230 (ii) Volvo/Veng 10.233 (iii) Magill 10.236 (iv) IMS Health 10.246 (v) Microsoft 10.249

(b) Licensing oflP Rights and Article 102 10.256 (c) MisuseofRegulatory Process 10.260 (d) Conclusions on Abuses 10.261

HI SPECIAL SECTORS

11. Financial Services Nicholas Banasevic, Stephen Ryan, and Rita Wezenbeek A. Introduction 11.01

(1) General Remarks on Financial Services 11.02 (2) Developments in the Commission's Approach 11.04 (3) The Post-2007 Financial Crisis and Consequences for Competition in

Financial Sector 11.05 (4) Competition and Regulation in the Financial Sector 11,11 (5) Social Security 11.15

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B. Banking 11.16 (1) Preliminary Remarks 11.16 (2) Payment Systems 11.20

(a) Introduction to Payment Systems 11.20 (b) Regulation, Self-Regulation, and Competition Law Enforcement 11.24 (c) Pricing Issues (Interchange Pees) 11.31 (d) Issues Relating to Access 11.53

(1) SmFMLaAdr 11.54 (ii) Visa International and Visa Europe 11.57 (iii) Groupement des Cartes Bancaires 11.58 (iv) European Payments Council 11.60

(3) Non-Payment Banking Antitrust Cases 11.61 (4) Banking Mergers 11.69

(a) Introduction 11.69 (b) Turnover Calculation for Credit Institutions and Other Financial

Institutions 11.71 (c) The Approach to Market Definition 11.74 (d) Significant Cases 11.80 (e) Nationalization and Recapitalization 11.85 (f) Looking Forward 11.97

C. Capital Markets 11.103 (1) Preliminary Remarks 11.103

(a) Importance of Clearing 11.107 (b) MiFIDII 11.110

(2) Antitrust Cases 11.113 (a) Clearstream 11.113 (b) Recent Enforcement 11.132 (c) Standard & Poor's 11.133 (d) Reuters Instruments Codes (KLO) 11.140 (e) Credit Default Swaps 11,144

(3) Deutsche Börse/NYSE Euronext Merger Case 11.146 (a) Introduction (b) The Parties and the Deal 11.150 (c) Market Definition 11.155 (d) Competitive Assessment 11.164 (e) Claimed Efficiencies 11.170 (f) Remedies 11.175 (g) Conclusion 11.177

D. Insurance 11.178 (1) Introductory/Preliminary Remarks 11.178

(a) Some Characteristics of Insurance 11.178 (b) Market Definition Issues in the Insurance Sector 11.182

(2) The Commissions Antitrust Policy in the Insurance Sector 11.186 (a) Commission Antitrust Case Law on Insurance 11.186 (b) Commission Block Exemption Regulation for the Insurance Sector 11.189 (c) Sector Inquiry in Business Insurance 11.191

(3) Specific Types of Practices in the Insurance Sector 11.193 (a) Agreements on Prices 11.193 (b) Jointly Produced Compilations, Tables, and Studies 11.196 (c) Standard Policy Clauses 11.200

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(d) Co-Insurance and Co-Reinsurance Pools 11.204 (i) Pools in the Block Exemption 11.205 (ii) Commission Decisions and Other Cases on Pools 11.209

(e) Security Devices 11.214 (f) Agreements on Settlement of Claims and on Registers of

Aggravated Risks 11.216 (g) Insurance Distribution 11.218

E. Conclusions 11.220

12. Energy Celine Gauer and Lars Kjelbye A. Introduction 12.01

(1) Liberalization and the Regulatory Framework 12.04 (2) Regulation and Competition Enforcement 12.10 (3) Findings of the Commission's Energy Sector Inquiry 12.12

(a) Market Concentration 12.13 (b) Vertical Foreclosure 12.14 (c) Market Integration 12.15 (d) Downstream Markets 12.17

B. Market Definition 12.18 (1) Product Market 12.19

(a) Gas Markets 12.19 (b) Electricity Markets 12.26

(2) Geographie Market 12.36 (a) Exploration, Production, and Sales of Crude Oil and Gas 12.36 (b) Supply Markets 12.37 (c) Transport Markets 12.43 (d) Flexibility of Markets in Gas 12.46

(3) Conclusion 12.47 C. Obstacles to Market Integration and Discrimination 12.48

(1) Horizontal Market Partitioning 12.49 (2) Curtailment of Networks 12.53 (3) Territorial Restrictions and Destination Clauses in Vertical Agreements 12.57 (4) Conclusion 12.66

D. Vertical Contractual Restraints 12.67 (1) Use Restrictions 12.68 (2) Customer Foreclosure 12 74 (3) Exclusive Distribution and Volume Reduction Clauses 12.82 (4) Conclusion J2 87

E. Horizontal Contractual Restraints 12 88 (1) Non-Compete Clauses 12 89 (2) Joint Investment and Joint Operation of Production Capacity 12.95 (3) Network Effects and Minority Shareholdings 12 110 (4) Joint Purchasing 12 112 (5) Joint Selling 12 116

(a) Pure Joint Selling 12 117 (b) Joint Selling as Part of Supply Chain 12 123

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(6) Exchange of Information 12.129 (7) Conclusion 12.137

F. Network Foreclosure 12.138 (1) Refusal to Supply by Vertically Integrated Undertakings 12.140

(a) Access to Transport Networks is Indispensable 12.141 (b) Refusals to Access Networks in Various Forms 12.143 (c) Elimination of Effective Competition and Objective Justification 12.155

(2) Input Foreclosure 12.157 (a) Long-Term Capacity Reservations; The GDF and E. ON Gas Cases 12.160 (b) Pre-Emptive Capacity Reservation: The ÖEZCase 12.167

(3) Remedies 12.168 (a) The RWE and ENI Cases 12.170 (b) The GDF and E.ONGzs Foreclosure Cases 12.173 (c) ThedEZCaae 12.175

(4) Conclusion 12.179 G. Exploitative Abuses 12.182

(1) Energy Markets are Prone to Exploitative Conduct 12.183 (2) The Commission's Practice 12.188

(a) E.ON Electricity: The German Electricity Wholesale Market Case 12.189

(b) E.ON Electricity: The German Electricity Balancing Case 12.198 (3) Conclusion 12.203

H. State Measures and Article 106 TFEU 12.205 I. Final Remarks 12.216

(1) The Energy Sector: Five Years After the Energy Sector Inquiry 12.218 (2) Competition Policy: The Contribution of Energy Cases 12.225

(a) New Types of Infringements 12.226 (b) First Structural Remedies 12.229 (c) Deterrence vs Swift Impact on the Market 12.234

(3) Conclusion 12.238

13. Communications (Telecoms and Internet) David Gabathuler andEduardo Martinez Rivero A. Introduction 13.01 B. EU Regulatory Framework for Electronic Communications 13.04

(1) Introduction 13.04 (2) Opening the Market to Competition (1990s) 13.07

(a) Progressive Liberalization (Reliance on Article 106 Directives) 13.08 (b) Harmonization Measures 13.13

(3) The Regulatory Framework 13.16 (a) The Regulatory Package 13.20 (b) Functioning of the Regulatory Framework 13.24 (c) Article 7 consultation mechanism 13.31 (d) Article 7 Oversight Extended to Regulatory Remedies 13.35 (e) Functional Separation 13.37 (f) Body of European Regulators for Electronic Communications

(BEREC) 13.40

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(4) Specific Regulatory Measures 13.44 (a) International Mobile Roaming 13.44 (b) Radio Spectrum Policy 13-48

(5) Computing the Telecoms Single Market: Commission's 'Connected Continent' Proposal 13-55

C. Move from Copper Networks to Next Generation Access Networks 13.60 (1) The Emergence of Next Generation Access Networks 13-60 (2) The NGA Recommendation 13-65 (3) The Recommendation on Non-Discrimination and Costing

Methodologie: 13-71 D. Interaction Between Ex Post Competition Enforcement

and Ex Ante Regulation 13-77 (1) The Applicability of the Competition Rules to the Electronic

Communications Sector 13.77 (2) AComplementary Approach 13.92 (3) Resolving Conflicts Between Sector Regulation and Competition

Enforcement 13.107 (4) The Influence of Competition Law Principles on the

Regulatory Framework 13.111 (5) Economic Incentives to Invest 13.117 (6) No Exemption for EmergingMarkets 13.119 (7) Ex Ante Regulation as a Mitigating Circumstance 13.127

E. Commission's Antitrust Enforcement in the Electronic Communications Sector 13.133 (1) Margin Squeeze: An Autonomous Type of Abuse 13.134

(a) Deutsche Telekom (2003) 13.137 (b) Telefonica (2007) 13.141 (c) TeliaSonera (2011) 13.148

(2) Predatory Pricing: Leveraging of Incumbent Power into an Emerging Market 13.153

(3) Refusal to Supply: Competition Enforcement in Addition to Regulatory Intervention 13.162

(4) Market Sharing: Article 101 Violation Extending to More Than One Member State 13.167

F. Mergers in the Electronic Communications Sector 13.171 (1) Introduction 13.171 (2) MobileTelecommunications 13.174

(a) Horizontal Overlap 13.176 (b) Vertical Relationship; 13.192

(3) Fixed-LineTelecommunications 13.195 (4) Alternative Infrastructure: Cable and Satellite 13.202

(a) GaMr 13.203 (b) Satellite 13.206

(5) Some Notable Merger Decisions in Other Markets 13.207 G. Internet 13.209

(1) Overview 13.209 (2) Net Neutrality Regulation 13 210 (3) Proposed Net Neutrality Measures at EU Level 13.211 (4) Situation at the National Level 13.214

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(5) Net Neutrality and Competition Law Enforcement 13.219 (6) Google: Online Search and Advertising 13.222

H. Other Developments 13.226 (1) Network Sharing in Mobile Telephon/ 13.226 (2) State Aid to Broadband 13.233 (3) Standard Essential IPR Relating to Mobile Telephon/ Standards 13.238

14. Media

A. Introduction 14.01 (1) Main Features of the Media Sector 14.02

(i) Music Industry 14.05 (ii) Audiovisual Industry 14.08 (iii) Book Production, Publishing, and Distribution 14.11 (iv) Advertising Markets 14.13

(2) Regulatory Framework 14.14 (3) Issues Arising Across the Media Sector 14.18

(i) Enforcement at Both EU and National Level 14.19 (ii) Cultural Diversity 14.21 (iii) Copyright 14.22 (iv) Exclusivity 14.23 (v) Two-Sided Markets 14.25

(4) Structure 14.27 B. Competition Issues under Article 101 14.29

(1) Horizontal Agreements 14.31 (a) Price-Fixing 14.32

(i) Contractual Systems ofFixed Book Prices 14.33 (ii) Arrangements Akin to Price Fixing 14.36

(%) or CoMcfrfa/ fracA'f« fo Retail Prices ofPhysical Recordings 14.37

fii) or CoMcfrfa/ f/ir fo GrantRebates 14.38

(iii) Concerted Practices Leading to an Increase in Retail Prices 14.41 (b) Customer and Territorial Allocation 14.47

(i) Restrictions on the Collective Licensing of Content 14.49 (ii) Restrictions on the Ability of Right Holders to Entrust the

Licensing of Content to the Person ofTheir Choice 14.53 (iii) Agreements or Concerted Practices Resulting in Territorial

Allocation 14.58 (c) Joint Selling ofTelevision Rights 14.63

(i) Does Joint Selling of Rights Fall Within Article 101(1)? 14.64 (ii) Horizontal Aspects of Joint Selling of Rights 14.66 (iii) Specificity of Sport 14.68 (iv) Absence of Downstream Exclusivity 14.69

(d) Joint Purchasing ofTelevision Rights 14.70 (i) Appreciable Restriction of Competition 14.72 (ii) Main Competition Concerns 14.76 (iii) Joint Purchasing of Sports Rights by Public Broadcasters 14.77

(2) Vertical Agreements 14.82 (a) Exclusivity Clauses Over Premium Content 14.84

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(i) Commission's Policy Objective 14.85 (ii) The Approach in ARD 14.86 (iii) A More General Framework of Assessment 14.91 (iv) Possible Limits on the Duration and Scope of Such

Agreements 14.93 (v) The Impact of the FA Premier League and Murphy Cases on the

Level of Remuneration a Right Holder Can Obtain in Return for Exclusivity 14.96

(b) Most-Favoured-Nation Clauses 14.97 (i) Most-Favoured-Supplier Clauses 14.98 (ii) Most-Favoured-Customer Clauses 14.104 (iii) Cross-Platform Parity Clauses 14.107 (iv) Conclusion 14.110

(c) Territorial Restrictions 14.111 (i) Territorial Restrictions in Bilateral Reciprocal Agreements

Between Collecting Societies 14.112 (ii) Absolute Territorial Protection Before FA Premier League and

Murphy 14.114 (iii) Absolute Territorial Protection After FA Premier League and

Murphy 14.117 (iv) Territorial Restrictions in the Online World 14.120

C. Competition Issues under Article 102 14.121 (1) Market Definition 14.122 (2) Dominance 14.123

(i) Assessing the Economic Strength of a Content Provider 14.124 (ii) Assessing the Economic Strength of a Broadcaster 14.125

(3) Abuse 14.126 (a) UnfairTrading Conditions 14.127 (b) Excessive Pricing 14.133 (c) Discriminatory Pricing 14.135 (d) Exclusionary Abuses 14.139

D. The Competition Directive: Market Entry, Special or Exclusive Rights, and Spectrum Assignments 14.143 (1) Member States Prohibited From Granting Exclusive or Special Rights 14.146 (2) Member States Required to Assign Spectrum on the Basis of Appropriate

Criteria 14.149 E. Mergers in the Media Sector 14.156

(1) General Remarks 14.158 (i) Consolidation 14.159 (ii) Digital Markets 14.160 (iii) Content 14.161 (iv) Vertical Issues 14.162

(2) The Scope of the Competition Assessment under the Merger Regulatic 14.163 (3) Concentrations in Selected Media Industries 14.167

(a) Concentrations in the Music Industry 14.167 (i) Music Publishing 14.169

(i) Relevant Product Markets 14.170 (ii) Relevant Geographie Markets 14.171 (iii) The Assessment ofNon-Coordinated Effects 14.172 (iv) The Assessment ofCoordinated Effects 14.177

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(ii) Recorded Music 14.178 (i) Relevant Product Markets 14.179 (ii) Relevant Geographie Markets 14.180 (iii) The Assessment ofNon-Coordinated Effects 14.181 (iv) The Assessment of Coordinated Effects 14.186

(b) Concentrations in the Audiovisual Industry 14.189 (i) Relevant Product Markets 14.192 (ii) Relevant Geographie Markets 14.200 (iii) The Assessment ofPay-TV Mergers 14.203

(i) Prohibitions Following the Lack ofSatisfactory Remedies 14.204 (ii) Focus on Vertical Issues (Tnput Foreclosure) 14.207

Mr&'az/ Ar«# A&rgw? iwf/i Overlaps 14.211

(c) Concentration; in the Book Publishing Industry (Including E-Books) 14.215 (i) Relevant Product Markets 14.217 (ii) Relevant Geographie Markets 14.219 (iii) The Assessment ofNon-Coordinated Effects 14.221 (iv) The Assessment of Coordinated Effects 14.223

(d) Concentrations in the Written Press 14.225 (i) Relevant Product Markets 14.226 (ii) Relevant Geographie Markets 14.228 (iii) The Assessment ofNon-Coordinated Effects 14.229 (iv) The Assessment of Coordinated Effects 14.230 (v) The Assessment of Conglomerate Effects 14.231

(e) Concentrations in Advertising Markets 14.234 (i) Product Markets 14.235 (ii) Relevant Geographie Markets 14.237 (iii) The Assessment of Coordinated/Non-Coordinated Effects 14.238 (iv) Vertical Effects 14.242

(4) Conclusion 14.244

15. Transport Hubert de Broca, Marta Mielecka Riga, and Anatoly Subocs A. The Economic Importance of Transport 15.01 B. Competition Law Framework 15.05

(1) Historical Evolution 15.07 (2) Modernization of Competition Rules in the Transport Sector 15.13

C. Air Transport 15.19 (1) Introduction 15.19 (2) Legal Framework 15.21

(a) Liberalization of the EU Aviation Market 15.21 (b) International Aspects 15.26

(i) Air Service Agreements with Third Countries 15.26 (ii) Open Skies Agreement and Other Comprehensive Air

Transport Agreements 15.33 (c) Application of EU Competition Rules in Air Transport 15.41

(3) Market Definition in Airline Cases 15.42 (a) Introduction 15.42 (b) Air Transport of Passengers 15.44

(i) Supply of Air Transport Services to End Customers 15.44

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(i) StartingPoint: Origin-and-Destinatwn (O&D)Approach 15.44 (ii) Type of Passenger 15.49 (iii) Airport Substitutability 15.54 (iv) Non-Stop vs One-Stop Flights 15-58 (v) Charter Services 15.60 (vi) Inter-Modal Competition 15.63

(ii) Supply of Airline Seats to Tour Operators 15.65 (c) Air Transport of Cargo 15.66

(4) Competitive Assessment of Airline Alliances and Mergers 15.69 (a) Introduction 15.69 (b) Determination of Affected Markets 15.76 (c) Counterfactual 15.80 (d) Assessment of Restrictions of Competition 15.85

(i) Restriction of Competition by Object 15.85 (ii) Restriction of Competition by Effect 15.87

(e) Efficiencies 15.94 (i) Introduction 15.94 (ii) General Assessment Framework Under Article 101(3) 15.95 (iii) Efficiency Gains 15.99 (iv) Pass-on to Consumers 15.101 (v) Indispensability 15.103 (vi) No Elimination of Competition 15-106

(f) Commitments 15.108 (i) Introduction 15-108 (ii) Slot Releases 15.113 (iii) Special Prorate Agreements 15-120 (iv) Fare Combinability Agreements 15-123 (v) Frequent Flyer Programme; 15-124 (vi) Intermodal Agreements 15-125 (vii) Other Commitments 15-126

(5) Prohibited Airline Mergers: Ryanair/Aer Lingus and Olympic/Aegean 15-130 (6) Hardcore Restrictions 15-136

(a) Price Fixing 15-136 (b) Market Sharing 15-139

(7) Abuses of a Dominant Position 15-141 D. Maritime Transport 15.144

(1) Introduction 15-144 (2) The Repeal of the Conference Block Exemption 15-146 (3) The Exemption of Maritime Consortia 15-150

(a) Background 15-152 (b) Objectives of the Latest Review 15-155 (c) The Scope of the Exemption 15-159 (d) The Content of the Exemption 15.162 (e) The Conditions for the Exemption 15.166

(i) Market Share Threshold 15-167 (ii) Notice Period 15.172

(4) The Maritime Guidelines 15-174 (5) Individual Exemption 15.180 (6) Market Definition 15-182 (7) Agreements and Abuses of Dominant Position 15-189

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E. Inland Transport 15.193 (1) Road Transport 15.194

(a) Transport of Goods 15.195 (b) Transport of Passengers 15.199

(2) InlandWaterways 15.205 (3) Rail Transport 15.208

(a) Transport of Goods by Rail 15.208 (b) Transport of Passengers by Rail 15.211 (c) EU Liberalization in the Railway Sector: The Railway Packages 15-214

(i) First Railway Package 15.215 (ii) Second Railway Package 15.216 (iii) Third Railway Package 15.218 (iv) Rail Recast Directive 15.220 (v) Fourth Railway Package 15.225 (vi) Railway Interoperability 15.230

(4) Controlled Competition for Public Transport: Regulation 1370/2007 15-232 (5) Antitrust Rules Applicable to Inland Transport 15.242

(a) Article 2 of Regulation 169/2009: Technical Agreements 15.247 (b) Article 3 of Regulation 169/2009: Exemption for Croups ofSmall

and Medium-Sized Companies 15.253 (6) Market Definition 15-259

(a) Freight 15-260 (b) Passenger Transport 15-281

(7) ProhibitedAgreements 15-300 (8) Abuses of a Dominant Position 15-314

F. Transport Infrastructure (and Related Services) 15-349 (1) Applicability of Competition Rules to Transport Infrastructure (and

Related Services) 15.351 (a) Economic Activity 15.351 (b) Services of General Economic Interest 15-361

(2) Airport Infrastructure 15.364 (a) Market Definition 15.364

(i) Product Market 15.364 (ii) Geographie Market 15.366

(b) DiscriminatoryLanding Fees 15.370 (c) Access to Airport Services (Ground-Handling) 15.375

(3) Maritime Infrastructure 15.378 (a) Market Definition 15.378

(i) Product Market 15.378 (ii) Geographie Market 15.382

(b) Competition Concerns 15.383

16. Pharma Harald Mische, Elena Kamilarova, and Dominik Schnichels A. Introduction 16.01 B. Overview of the Pharma Sector 16.02

(1) Pharmaceuticals 16.02 (2) Market Players 16.05

(i) Manufacturers 16.05

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(ii) Generic Companies 16.06 (iii) Distribution 16.08 (iv) Demand 16.09

(3) Regulatory Framework 16.10 (i) Patents 16.11 (ii) SPC 16.14 (iii) Marketing Authorization 16.16 (iv) 'Data Exclusivity' and 'Marketing Exclusivity' 16.18 (v) National Pricing and Reimbursement Rules 16.19

(4) Antitrust Enforcement Priorities before the Sector Inquiry 16.24 (5) Sector Inquiry and Follow-Up 16.25

(i) Sector Inquiry 16.25 (ii) Follow-Up 16.28

C. Market Definition 16.30 (1) Pharmaceutical Markets in Case Law 16.30 (2) ATC Classification 16.32 (3) Medicine Characteristics 16.35 (4) Galenic Formulation 16.36 (5) Product Life Cycle 16.37 (6) Future Markets 16.38 (7) Distribution Channels 16.39 (8) Upstream Markets 16.40 (9) Supply Side 16.43 (10) Geographie Markets 16.44 (11) Recent Antitrust Decisions 16.45

D. Dominance in Abusive Conduct Cases 16.47 (1) Commission Practice 16.47 (2) National Cases 16.48

(i) UK Cases (Reckitt Benckiser and Napp) 16.48 (ii) The French Sanofi-Aventis Case 16.49

E. Restrictive Practices Between Originators and Generic Companies 16.50 (1) Main Competition Concerns and the Economic and Legal Context of

Generic Competition 16.51 (a) Main Competition Concerns 16.51 (b) Dynamics of Competition Between Originator and Generic

Companies 16.55 (c) The Competitive Process Leading to Generic Entry 16.62

(2) Pay-for-Delay Settlement Agreements 16.67 (i) Terminology 16.67 (ii) Forms of Value Transfer 16.69 (iii) Overview of US and EU Debate 16.70

(a) Pay-for-Delay Settlements in the US 16.72 (i) Hatch-Waxman Act 16.73 (ii) Potential Scope ofthe Patent Test 16.76 (iii) Presumption ofRestraint ofTrade 16.78 (iv) US Supreme Courts 'Rule ofReason'Test 16.80

(b) Pay-for-Delay Patent Settlement Agreements under Article 101 16.85 (i) Review of Patent Settlements Under the 2008/2009

Sector Inquiry 16.85

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(ii) Pay-for-Restriction in Settlement Agreements 16.87 (iii) Commission Decision in Lundbeck 16.88 (iv) Commission Decision in Fentanyl 16.99 (v) EU and UK Investigations in Servier and Paroxetine Under

Article 101 16.100 (vi) Relevant Jurisprudence 16.103

(3) Acquisition of Patent Rights and Exclusive Licensing 16.110 (a) Acquisition of API Technology 16.111 (b) Merger Regulation vs Articles 101 and 102 16.112 (c) Relevant Jurisprudence 16.113 (d) Exclusive Licensing 16.114

(4) Exclusive Supply Agreement 16.117 F. Competition Between Manufacturers of Generic Medicines 16.118

(1) National Pricing Systems and Their Impact on Generic Competition 16.119 (2) The German Sickness Funds and the Dutch Preference Policy 16.123

G. Case Law under Article 102 and National Law: Abuses by Originators 16.127 (1) Misleading Representation; in Government Procedures and Misuse of

Procedure: 16.128 (a) Misleading Representation in Government Procedures 16.129 (b) Misuse of Procedures 16.138

(2) Acquisition of Competing API Technology (Servier Investigation) 16.142 (3) Pay-for-Delay Settlement Agreements (Servier and Paroxetine

Investigations) 16.143 (4) Exclusionary Pricing Discounts in the Hospital Segment

(the OFT's Napp Case) 16.144 (5) Withdrawal and Delisting of a Product (the OFT's Reckitt

Benckiser Case) 16.146 (6) Denigration (the L'Autorite de la concurrence's Schering-Plough and

Sanofi-Aventis Cases) 16.147 (7) Abusive Practices Against Competing Originator Companies

(Boehringer Case) 16.150 H. Parallel Trade in Pharmaceuticals 16.152

(1) Rationale 16.153 (a) The Specificity of the EU Internal Market 16.155 (b) The Internal Market Objective 16.157

(2) Restrictions of Parallel Trade and Article 101: Supply Quotas and Dual Pricing 16.160 (a) Supply Quotas and Article 101 16.163

(i) EU Case Law 16.163 (ii) National Case Law 16.166

(b) Dual Pricing 16.168 (i) EU Case Law: Restriction by Object 16.168 (ii) Special Characteristics of the Pharmaceutical Sector 16.172 (iii) National Case Law 16.178

(3) Restrictions of Parallel Trade and Article 102: Supply Quotas 16.180 (a) EU Case Law: Absence ofa Per Se Abuse Under Article 102 16.181 (b) National Case Law 16.191

(i) The Case Law of the French Competition Authority 16.192

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(ii) The Case Law of the Spanish Competition Authority 16.196 (iii) The Case Law of the Belgian Competition Authority 16.203 (iv) Conclusion 16.205

IV STATE AID

17. State Aid Twz AfaxMM Qkzrf ÄöfM P&M ^ A. Why State Aid Control? 17.01

(!) The Origins 17.01 (2) Constant Conflict of Objectives 17.09 (3) The 2012-2014 State Aid Modernization 17.13

B. Notion of State Aid 17.18 (!) Aid Granted by the State or Through State Resources 17.20

(a) 'Or' is to be Read as 'and' 17.20 (b) State Resources...May Be Private (As Long As They Are

Under Control) 17.23 (c) Imputability 17.29

(2) Advantage 17.35 (a) Beneficiary of the Advantage 17.36

(i) Notion of Undertaking 17.36 (ii) Indirect Beneficiary 17.44

(b) Notion of Advantage 17.49 (i) Economic Advantage 17.51 (ii) The Market Economy Investor Principle/Private

Creditor Principle 17.60 (i) The Private Investor Principle 17.60 (ii) Private Creditor Principle 17.76 (iii) Sale of State Property 17.79 (iv) Extensions 17.85 (v) Infrastructnre Projects 17.88

(iii) Tax Advantage 17.90 (3) Selectivity 17.95

(a) Notion of Selectivity 17.95 (b) Tax Selectivity 17.100

(i) Material Selectivity 17.104 (i) De Jure and De Facto Selectivity 17.104 (ii) The Test of Tax Selectivity 17-107 (iii) Discretionary Power 17.113 (iv) Justification hythe Logic ofthe Tax System 17.115

(ii) Regional Selectivity 17-121 (4) Distortion of Competition and Effect on Trade 17.130

(a) Affectation of Competition and Trade 17.130 (b) DeMinimis Regulation 17.146

(i) Scope 17-152 (ii) Recipient 17-155 (iii) Calculation 17-156 (iv) Transparent Aid 17.161 (v) Application in Time 17-162 (vi) Further Conditions 17-166

Ixx

(vii) Monitoring 17.169 (viii) Cumulation 17.170 (ix) Controversy on the Nature ofthe DeMinimis Rule 17.172

(c) New SGEI DeMinimis Regulation 17.179 C. Compatibility of State Aid with the Internal Market 17.183

(1) Refined Economic Approach 17.186 (a) Well-Defined Objective of Common Interest 17.189 (b) Well-Designed Instrument 17.193 (c) Balancing of the Positive and Negative Effects/Overall

Positive Balance 17.196 (d) TheW^yForward 17.197

(2) General Principles of Necessity (Incentive Effect) and Proportionali ty 17.199 (3) Compatibility on the Basis of Article 107(2) 17.201

(a) Aid Having a Social Character Granted to Individual Consumers 17.204 (b) Aid to Make Good Damage Caused by Natural Disasters or

Exceptional Occurrences 17.207 (c) Aid to Compensate for the Economic Disadvantages Caused by the

Division of Germany 17.212 (4) Compatibility Declared by the Commission on the Basis of

Article 107(3) 17.215 (a) Aid to Promote the Economic Development of Areas where the

Standard of Living is Abnormally Low or Where There is Serious Underemployment (Art 107(3)(a)) 17.221

(b) Aid to Promote the Execution of an Important Project of Common European Interest (Art 107(3)(b) first alternative) 17.235

(c) Aid to Remedy a Serious Disturbance in the Economy of a Member State (Art 107(3)(b) second alternative) 17.239

(d) Aid to Promote Culture and Heritage Conservation (Art 107(3) (d)) 17.245 (e) Aid to Facilitate the Development of Certain Economic Activities or

of Certain Economic Areas (Art 107(3)(c)) 17.246 (i) State Aid for Environmental Protection 17.250

(i) Investment Aid 17.255 (ii) Operating Aid 17.262

(ii) Aid for R&D 17.263 (i) StageofR&D 17.264 (ii) Incentive Effect of R&D Aid 17.267 (iii) Eligible Costs 17.270 (iv) Aid for Rescuing and Restructuring Firms in Difficulty 17.271

(iii) Other Soft Law of a Horizontal Nature 17.323 (iv) Soft Law Concerning Only Certain Sectors 17.326

(f) Other Categories to be Specified by Decision of the Council (Artl07(3)(e)) 17.327

(g) Aid for the Coordination of Transport 17.328 (5) Compatibility Declared by the Council: Article 108(2) 17.329 (6) Services of General Economic Interest 17.338

(a) Introduction: Definition and Legal Basis 17.338 (b) Before Altmark: Compensation and State Aid Approach 17.348 (c) The Altmark Ruling 17.351 (d) Analysis of Altmark: Positive Effects andOpen Questions 17.359 (e) The SGEI Package 17.364

(i) The Monti-Kroes Package 17.364

lxxi

(ii) The New Package 17.368 (i) Existence of an SGEI 17.370 (ii) Entrustment Act 17.371 (iii) Parameters of Compensation 17.372 (iv) Avoidance of Overcompensation 17.373 (v) Selection ofthe Provider 17.374 (vi) De Minimis Regulation 17.377 (vii) Block Exemption 17.379 (viii) Framework 17.380

(7) The General Block Exemption Regulation 17.387 D. State Aid Procedure 17.394

(1) Legal Basis and Applicable Texts ofHard and Soft Law 17.395 (2) Notification and Assessment of New Aid (Chapter II Procedural

Regulation) 17.402 (a) Objective of the Notification and Assessment Procedure 17.404 (b) Legal Basis and the Principle of Notification Requirement 17.406 (c) Steps in the Notification and Assessment Procedure 17.410

(i) Preparation and Filing of Notification 17.411 (ii) Pre-Notification 17.420 (iii) Preliminary Investigation 17.423 (iv) Formal Investigation Proceedings 17.427

(d) Internal Commission Decision-Making Procedure 17.430 (e) Delays and Mistakes in the Notification Procedure and How to

AvoidThem 17.435 (f) Monitoring of Approved and Notification-Exempted State Aid 17.443

(3) Unlawful Aid (Chapter III of the Procedural Regulation) 17.445 (a) The Case Law on Unlawful Aid 17.446 (b) The Codification of the Case Law in the Procedural Regulation 17.448 (c) Innovation in the Procedural Regulation: The Recovery Injunction 17.449 (d) Recovery of Unlawful and Incompatible Aid 17.450

(i) Legal Basis and General Principles of Recovery 17.455 (i) Legal Basis of Recovery 17.455 (Ii) Immediate andEjfective Recovery According to

National Laws 17.460 (iii) Imposition of Compound Interest 17.467

(ii) Defences Against Recovery 17.471 (i) Defences Ihat Can Be Invoked by the Member State 17.473 (ii) Defences Ihat Can Be Invoked by the Beneficiary 17.474

(iii) Specific Problems and Situations of Recovery 17.479 (i) Domestic Motivation for Recovery 17.479 (ii) Recovery andInsolvency Proceedings 17.481 (iii) The Correct Addresseefor the Recovery Claim 17.487

(iv) Recovery Practice of the Commission 17.493 (4) Existing Aid (Chapter IV Procedural Regulation) 17-497

(a) The Distinction Between New and Existing Aid 17.501 (b) Procedure for Existing Aid 17.511 (c) The Treatmentof Borderline Cases 17.516

(5) The Rights of Third Parties, in Particular: The State Aid Complaint

lxxii

(Chapter V Procedural Regulation) 17.519 (a) Rights ofThird Parties in General 17.519 (b) State Aid Complaints 17.524 (c) Challengeable Acts 17.541

(i) ExistingAid 17.543 (ii) Opening Decisions 17.544 (iii) Injunctions 17.546 (iv) Administrative Letters in Response to Complaints 17.548

(6) Action Seeking the Suspension and Provisional Recovery,of State Aid in Front of National Courts 17.553

(7) The Scope of Judicial Review 17.556 (a) Judicial Review: Failure to Act 17.559 (b) Judicial Review: Interim Relief 17.561 (c) Judicial Review: Action for annulment 17.565

Index 2033

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