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Transcript of CA-2
•cartel activity such as bid rigging, price fixing and market sharing.
•abuse of a dominant position. Why is pays to know the law: Examples (Law Cases) It's very important for a company to know the competition law because of the implications that the abuse of a dominant position can bring through enforcement from E.U. Court of Justice. Activating the class ISHS 12
- A12 1)Mention three subject Competition Law aim to avoid companies from doing.
2)Who is responsible to makes sure that businesses and governments stick to EU rules on fair competition?
3)What is a Dominant Position on the market?
4)What is ECJ a shortening for? 5)Define Enforcement.
6)In the Treaty of Rome which article is the most relevant for this subject?
7)Which Treaty replaced the Treaty of Rome regarding Competition?
8)In the Treaty on the Functioning of the European Union which article is the most relevant for this subject? 9)What are the four abuses mentioned in article 102 in the Treaty on the Functioning of the European Union?
10) What is OFT a shortening for?
11) Mention three consequences of infringing competition law.
12)Come up with examples of Enforcement activity undertaken by the OFT.
13) Why is it important for a company to know the Competition Law? A dominant position can generally be said to exist once a market share to the order of 40% to 45% is reached. Although this share does not in itself automatically give control of the market, if there are large gaps between the position of the firm concerned and those of its closest competitors and also other factors likely to place it at an advantage as regards competition, a dominant position may well exist. Dominant Position Laws & Articles Old law the Treaty of Rome: Article 82: “Any abuse by one or more undertakings of a dominant position
within the common market or a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States.” Article 102 (ex Article 82 TEC) Abuses:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection with
the subject of such contracts. Additional Material CONSEQUENCES of infringing competition law include:
•fines of up to 10 per cent of worldwide group turnover
•director disqualifications of up to 15 years
•individuals involved in a cartel can face prison sentences of up to five years
•claims for damages in respect of harm caused by the infringement
•reputational damage inflicted by the bad publicity arising from any infringement findings ENFORCEMENT activity undertaken by the OFT has included:
•£10.2m fine for abuse of dominance by Reckitt Benckiser
•£28.6m penalty paid by RBS for individuals who were disclosing future pricing information to Barclays Bank (Barclays received full leniency and so paid no penalty)
•prison terms and director disqualification orders for British businessmen who were involved in the Marine Hose cartel. •The E.ON electricity cases: an antitrust decision with structural remedies. •European Union vs. Microsoft case VS. Critical Considerations: Useful Links & Educational Material •Study-book: “Business Law in the Global Marketplace” – Peter Nayler (Chapter 6, p. 207-208 & 213-215)
•Article: “Rules of Competition” – Alison Coleman, In association with the Office of Fair Trading
•Homepage: EUROPEAN UNION – Competition (http://europa.eu/pol/comp/index_en.htm).
•Homepage: EUROPEAN UNION – Case-Law
•Homepage (Danish): Konkurrence- og Forbrugerstyrelsen
•Youtube Video: Understanding competition law Chapter 2 – Cartels The companies approach shift from transactional to relation marketing makes it essential for the companies to use and share information from suppliers and competitors. Is this possible to do hundred percent without crossing the thin line of breaching the competition law?