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Transcript of COMPETITION LAW
Communities FENIN APPLICANT Association (majority of the undertakings) Market medical goods and equipment (particularly medical instruments) Spanish hospitals association members
sell those goods (inter alia) to the SNS management bodies 12 December 1997 is submitted to the Commission a complaint alleging that the 26 bodies or organizations, including three ministries of the Spanish Government, which run the Spanish national health system, were guilty of an abuse of a dominant position
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. art. 102 TFEU Such abuse may, in particular, consist in:
Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
Limiting production, markets or technical development to the prejudice of consumers;
Applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
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. (ex Article 82 TEC)
1. Infringement of its rights of defence
2. Error in law or manifest error of assessment in the application of Articles 82 EC and 86 EC
3. Infringement of an essential procedural requirement consisting in an inadequate statement of reasons and a lack of transparency. The applicant makes three pleas in law Findings
of the Court What does competition law regulates? Activities consisting in offering goods and services on a given market that is the characteristic feature of an economic activity not the business of purchasing the applicant indicated that the SNS provide private care for which patients not covered by the SNS PLEA REJECTED FIRST PLEA SECOND PLEA Infringement of the rights of the defence? The Commission argues that it dismissed the applicant´s complaint on the ground that Article 82 EC The applicant: SNS is guilty of an abuse of its dominant position causing serious harm to the undertakings which are members of the applicant association COURT'S DECISION:
“The Commission cannot be accused of infringing the rights of defence of an undertaking simply because it declined to carry out a superfluous analysis of certain aspects of that undertaking´s complaint.” PLEA REJECTED THIRD PLEA Insufficient reasoning
and a lack of transparency? The applicant accused of omitting to keep the applicant properly informed of progress of procedure COURT'S DECISION:
The Commission fully respected the applicant´s rights as complainant PLEA REJECTED Due to all the pleas put forward by the applicant are unfounded, the present action must be dismissed in its entirety. The applicants should paid the cost.
1. Dismiss the application
2. Orders the applicant to bear its own cost together with those incurred by the Commission. The Court of First Instance
the Comisision rejected the complaint on the basis that he public bodies were not acting as undertakings. It´s reasoning was that, when providing health care to citizens, the public bodies did so on the basis of solidarity Conclusion CASE C-205/03 JUDGEMENT OF THE COURT (GRAND CHAMBER) FENIN vs. Commission FENIN appeals the judgment of the Court of First Instance Commission raises a plea of inadmissibility The arguments of the parties
“the Court of First Instance adopted a definition of economic activity with is too narrow , holding that activity necessarily consists of the offer of goods or services on a given market and excluding all purchasing activity from that definition. FENIN submits that the approach of the Court of First Instance would enable many bodies to avoid the competition rules of the Treaty, even though competition is affected by the conduct of such bodies”. FENIN "There is no need to dissociate the purchase from the use to which the purchased goods are put”. THE COMMISSION
The finding of the Court , “ the first part of the single plea raised by FENIN in support of its appeal, that the purchasing activity of the SNS management bodies constitutes an economic activity in itself, dissociable from the service subsequently provided and which, as such, should have been examined separately by the Court of First Instance must be dismissed as unfounded.” The appeal was dismissed as partly inadmissible and partly unfounded. The judgment under appeal, that there is no need to dissociate the activity of purchasing goods from the subsequent use to which they are put in order to determine the nature of that purchasing activity and that the nature of the purchasing activity must be determined according to whether or not the subsequent use of the purchased goods amounts to an economic activity. the Court:
1.Dismisses the appeal,
2.Orders the FENIN to pay the costs of these proceedings (Article 69 of the Rules of Procedure pursuant to Article 118).
3.Orders the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Spain to bear their own costs. Finally, the Spanish Health Service was held that wasn´t acting as an undertaking with the consequence that the competition rules did not apply to them. CASE 27/76 JUDGEMENT OF 14-2-1978 APPLICANTS DEFENDANT OBJECT the Commission decided to initiate a procedure for infringement of article 86 of the ECC Treaty against UBCBV the Commission notified UBCBV that in its opinion it was engaging in an abuse of a dominant position in that it:
Required its distributor/ripeners not to sell bananas while still green;
Charged its distributor/ripeners in the various Member States prices which differed considerably, without any objective justification, for bananas of the same quality, even though the conditions of the market were to all intent and purposes the same;
Applied to its distributor/ripenersdiffering prices, the difference sometimes amounting to 138%;
Refused to supply the Danish firm Olesen with bananas of the Chiquita brand on the ground that this undertaking had taken part in an advertising campaign for bananas of a competing brand. In order to explain the facts of this case, the Commission
-The structure of the market
-UBC´s market behavior
General conditions of sale
The pricing practice
Refusal to continue supplies to Th. Olesen According all these facts, the Commission makes an appraisal of the situation and establishes de grounds for its decision. Gives a definition of a dominant position Then, the Commission proceeds to consider the market which has to be taken into consideration and states that the banana market is not the fruit market, in general. The Commission then deals with the dominant position of UBC and the way it has been set up. On the basis of all these facts theCommission concludes that, it must beconsidered to be an undertaking in adominant position. Once UBC is considered to be in a dominant position, the Commission established that it has been abusing this dominant position in different ways: 1.First because it forbids its distributor/ripeners to resell its bananas while still green 2.Next, because UBC is charging itsdistributor/ripeners in the MemberStates concerned, without any objective justification different prices for equivalent transactions and quantitiesof "Chiquita" bananas. 3.Finally, UBC has abused itsdominant position by ceasing to supplyits "Chiquita" bananas to one ofits distributor/ripeners, the Danishcompany Olesen To determine the fine which had to be imposed in respect of all these complaints, took into consideration the fact that the infringements by UBC were, at the very least, negligent, since UBC was, or at any rate should have been aware, of the anti-competitive effects of such conduct, especially as certain of its practices in this respect are specifically referred to in Article 86 of the Treaty. UNITED BRANDS COMPANY and UNITED BRANDS CONTINENTAL B.V.
COMMISSION OF THE EUROPEAN COMUNITIES SOLVAY VS COMMISSION PARTIES SOLVAY SA ET CIE COMMISSION OF EUROPEAN COMMUNITIES APPLICANT DEFENDANT OBJECT To void the Decision 91/297/ECC of 12 December 1990
Court of First Intance Solvay, who invented a process to make syntheic soda-ash, is one of the largest producers of soda-ash (product used in the manufacture of glass, chemical industry and metallurgy.) FAVOURABLE PLACE IN THE SODA-ASH MARKET
Solvay grants patents licenses to some companies and share the market
becomes a shareholder of these companies.
According to the companies involved, market-sharing agreements had been cancelled in 1972. Situation at the Community market:
concentration, no competition. COMMISSION'S INVESTIGATION PROBLEMS WITH THE DOCUMENTS' CONFIDENTIALITY
RESULT: INITIATION OF AN ADMINISTRATIVE PROCEDURE COLLEGE OF COMMISSIONERS ADOPTS 3 DECISIONS Decision 91/297/EEC Decision91/299/ECC Decision 91/300/ECC CONCERTED PRACTICE
SOLVAY AND ICI
+FINE ABUSE OF A DOMINANT POSITION (SOLVAY)
+FINE ABUSE DOMINANT POSITION IN UK (ICI)
+FINE PROCEDURE BEFORE THE COURT ORAL WRITTEN Solvay bring an action separately . The Court imposes measures to permit Solvay access to the file. oral arguments and replying questions APPLICANT (SOLVAY) CLAIMS VOID OR DECLARE NON-EXISTENT THE DECISIONS VOID THE FINE ORDER THE COMMISSION TO PAY THE COSTS DEFENDANT (THE COMMISSION) CLAIMS CONSIDER UNFOUNDED THE APPLICATION CONSIDER INADMISIBLE THE SUPLEMENTARY APPLICATION ASKED BY SOLVAY ORDER SOLVAY TO PAY THE COSTS THE CLAIM THAT THE DECISION SHOULD BE ANNULLED
The claim that the decision should be annulled is supported by a series of pleas which can be separated in two separate groups:
1.Infringement of procedural requirements
2.Infringement of articles 85 and 190 ECC ARGUMENTS OF THE PARTIES SOLVAY THE COMMISSION Judgment of the court (fifth chamber) 3 October 1985 Case 311/84 Centre Belge d'études de marché- Télémarketing (CBEM) SA
Compagnie Luxemburgeoise de télédifusion SA
Information publicité Benelux SA
on the interpretation of Article 86 of the EEC Treaty. second defendant PARTIES CBEM → Telemarketing Is there a dominant position within the meaning of Article 86 where an undertaking enjoys legal monopoly for the supply of certain goods or services and where, as a result, competition in the supply of those goods or services is excluded? Where it is accepted that the undertaking in question occupies a dominant position within the meaning of article 86 of the treaty, must the conduct of such an undertaking be interpreted as constituting an abuse of a dominant position, where that conduct consist in reserving for itself or for a subsidiary under its control, to the exclusion of any other undertaking, an ancillary activity which could be carried out by a third undertaking? The court states that there has been indeed an abuse within the meaning of article 86 The commission adopted the decision using documents which had not been communicated. Part of these documents had been deleted. Commission only notified its decision to ICI The contested decision was not based on any document which was not previously revealed to Solvay Majority of the documents were no longer of relevance in the case During the administrative procedure the applicant could have claimed the opportunity to inspect the documents concerning FINDINGS OF THE COURT ADMISIBILITY AND SCOPE OF THE PLEA To consider an action admissible it is necessary to examine if the application contains a summary of the plea in law alleging infringement of the rights of defence SOLVAY'S CASE There was not communication of the Commission contested decision and refuse to grant the access to the file. The Court established that Solvay’s plea satisfied the requirements for a summary of the plea under the art. 38 Rules of Procedure of the Court of Justice. The Court divided the plea in three different ones Use (by the Commission) of inculpatory documents which had not been communicated to the applicant.
Failed to reveal documents annexed to the statements of objections.
Failed to reveal documents from ICI likely to be used in the applicant’s defence. In reference to the first plea, the Court rejected the plea (in any event) because the Commission gave Solvay a period of two weeks to submit any observation. And despite of it Solvay did not receive the documents, they replayed in one of the letters mentioned above that they appeared not to be quite interesting. In both pleas the Court try to clarify if there was infringement of defence rights in Solvay’s case. COURT CONCLUSIONS: The concerted practice between Solvay and ICI had existed from 1973 and it was manifested in 5 factors:
1.Absence of any trade between Solvay and ICI.
2.Coincidence of lack of competition.
3.Conclusion and implementation of “purchase for resale”.
4.Frequent contact between the companies involved.
5.Applicant’s defence. The applicant had not opportunities for defending itself during the administrative procedure and it was affected by the non-disclosure of the documents. The court upheld pleas 2 and 3 and annulled the contested decision. The Court ordered the Commission to pay the costs. PARTIES NV-GB-INNO-BM ATAB Limited liability company Non-profit-making association OBJECT Interpretation of articles 3, 5, 30, 32, 86 and 90 of the ECC Treaty and Council Directive 72/404/ECC on taxes other than turnover taxes which affect the consumption of manufactured tobacoo sells cigarettes ar a price lower than that specified on the tax label Order to discontinue the sale on the grounds of infringement of the law PRESIDENT OF THE RECHTBANK INNO'S APPEAL OBSERVATIONS ECC COURT NATIONAL COURT SHOULD TAKE INTO ACCOUNT The Treaty imposes a duty on Member States in force any measure which could deprive the provision on article 5 of its effectiveness NOT TO ADOPT OR MAINTAIN AT ALL EVENTS article 86 prohibits any abuse by one or more undertakings of a dominant position EVEN if it is encouraged by a national legislative provision The National Court MUST determine whether the measure is capable of affecting trade between member states COSTS Not recoverable Matter on National Court JOINED CASES 6 & 7/73 PARTIES APPLICANTS Commercial Solvents Corporation Commission of the European
Communities Application for annulment of Decision 72/457/ECC QUESTIONS DOMINANT POSITION THE MARKET TO BE CONSIDERED ABUSE OF THE DOMINANT POSITION EFFECTS ON TRADE BETWEEN MEMBER STATES CSC AND ISTITUTO AS AN ECONOMIC UNIT DOMINANT POSITION THE MARKET TO BE CONSIDERED ABUSE OF THE DOMINANT POSITION EFFECTS ON TRADE BETWEEN MEMBER
STATES CSC AND ISTITUTO AS AN ECONOMIC UNIT All the arguments of the applicants were rejected COURT CONFIRMS THE DECISION The others companies which produce the same are only at an experimental stage In fact, it is possible to distinguish the market in raw material from the market on which the product is sold It has been demonstrated that the practices obey to anticompetitive objectives Zoja is a present exporting the products to member states and exports are endangered CSC affectively exercises a power of control over Istituto All the costs have to be paid by the applicants
The banana market is a market which is sufficiently distinct from the other fresh fruit markets.
The Commission has taken as the geographic market the following countries: The Federal Republic of Germany, Denmark, Ireland, the Netherlands and the BLEU, as there is no significant barriers fro UBC to overcome compared with other importers/distributors. THE MARKET 1.The structure of UBC UBC is in a position of strength at the selling stage.
2.The situation with regard to competitionFinally, the court considers, that the cumulative effect of all the advantages enjoyed by UBC thus ensures that it has a dominant position on the relevant market. POSITION ON THE RELEVANT MARKET Dominant position derives from a combination of several factors, which, taken separately, are not necessarily determinative. 1.The product market 2.The geographic market In order to rule, the court has to analyze the existence of a dominant position and if there is an abuse of this dominant position. The pricing practice within discriminatory prices and unfair prices. Discriminatory prices.
These discriminatory prices were obstacles to the free movement of goods. As a result, the policy of differing prices was an abuse of a dominant position.
The commission considers that UBC has abuse its position by charging unfair prices. That difference (7%) has not be challenged and cannot be automatically be regarded as excessive and consequently unfair. Thence Article 1 c) of the decision must be annulled. Partial annulment of the decision and the amount reduced accordingly to 850.000 units of account, to be paid in the national currency of the applicant undertaking. Abuse of the dominant position The clause prohibiting the resale of bananas while still green: The clause at issue forbidding the sale of green bananas infringes the Article 86 of the treaty.The refusal to continue supplying to Olesen: The finding in the decision is justified: Article 86 of the Treaty was infringed. Partial annulment of the decision and the amount reduced accordingly to 850.000 units of account, to be paid in the national currency of the applicant undertaking.