EJTN AD On-line Classroom on EU Competition Law November 10, 2020 Cutting edge issues in competition law cases before the EU Courts Anthony M. Collins, EU General Court With financial support from the Justice Programme of the European Union
Some General Observations on Competition Cases How they arise Incorporation of EU Competition Rules 2
Commission Notices • Best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU. • Co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC. • Definition of relevant market for the purposes of Community competition law. • Agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community (de minimis). • Informal guidance relating to novel questions concerning Articles 81 and 82 of the EC Treaty that arise in individual cases (guidance letters). • Immunity from fines and reduction of fines in cartel cases. • Best Practices for the submission of economic evidence and data collection in cases concerning the application of articles 101 and 102 TFEU and in merger cases. • Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements. • Guidelines on Vertical Restraints. 3
Courts’ Jurisprudence • Role of Courts in Litigation • Composition of Courts • Routes by which cases arrive in Luxembourg 4
References for Preliminary Ruling • Jurisdiction • Division of Labour with national courts • Questions on national law • Hearings • Content of Judgments 5
C-435/18 Otis GmbH v. Land Oberösterreich, • Reference from the Oberster Gerichtshof (Supreme Court, Autriche) • Scope of action for Damages for breach of Art. 101 TFEU • Could persons not acting as suppliers or customers on the market affected by the cartel claim compensation for loss ? • Verification of facts by the Supreme Court 6
Direct Actions • Jurisdiction in the General Court • Nature of proceedings • Respect for effective judicial protection : Article 47 of the Charter of Fundamental Rights • Case C 386/10 P Chalkor AE Epexergasias Metallon v. Commission , paras. 52 – 67. 7
Review of Fines • Case T-827/14 Deutsche Telekom v. Commission and Case T-851/14 Slovak Telecom v. Commission • Dominant position on telecommunications market • Unbundled Access to the Local Loop • General Court reduces Fines 8
Review of Fines • Case C-7/97 Oscar Bronner – access to essential facilities • Application of Bronner judgment • Appeal in C-152/19 P Deutsche Telekom v. Commission and C-165/19 P Slovak Telecom v. Commission 9
Merger Regulation • Case T-399/16, CK Telecoms UK Investments Ltd v. European Commission • Retail market for mobile telecommunication services in the United Kingdom • 4 mobile network operators. Market shares - EE, 30/40% O2, 20/30% Vodafone and Three 10/20% each. • O2 and Three proposed to merge. • Mobile Virtual Network Operators. • Network-sharing agreements. 10
CK Telecoms – Commission Decision • Reduce competition due to the removal of an important competitor, leaving only two other MNOs to compete against the merged entity. • Hamper mobile network infrastructure investment, primarily because the merged entity would have been participating with two other sets of infrastructure sharing agreements with the other MNOs on the UK market. • A reduction in the number of MNOs willing to host MVNOs, thereby weakening the negotiating position of MVNOs to obtain access. 11
CK Telecoms – Legal Foundations • First occasion for the General Court to rule on applying the Merger Regulation in an oligopolistic market that did not create or strengthen an individual or collective dominant position, but rather caused so- called “non -coordinated effects”. • Article 2(3) of Merger Regulation: the Commission may prohibit a transaction where it finds that it would “ significantly impede effective competition […] in particular as the result of the creation or strengthening of a dominant position ”. • The General Court interpreted this to contain two conditions: that the merger would eliminate important competitive constraints that the parties had exerted upon each other and that the merger would reduce the competitive pressures on the operators remaining on the market. 12
CK Telecoms – Burden & Standard of Proof • Burden of proof lay upon the Commission to establish the existence of both of these two criteria. • Standard of proof higher than the balance of probabilities but not as strong as that of beyond reasonable doubt. 13
CK Telecoms - Analysis • Elimination of an ‘important competitive force’. • Commission - Decline in competitive pressure resulting from the departure of an undertaking having more of an influence on competition than its market share would suggest sufficient to prove a significant impediment to effective competition. • General Court - Did not meet the required standard of proof for the existence of a significant impediment to effective competition. Any elimination of an important competitive force would amount to the elimination of an important competitive constraint. This would, in turn, justify a finding that the merger would give rise to a significant impediment to effective competition. 14
CK Telecoms – Theories of Harm • Unconvinced that a relatively low degree of product differentiation was likely to eliminate competitive constraints in the mobile retail market. Moreover, the Commission’s quantitative analysis fell far short of proving a “significant” upward pressure on retail prices. • Difficult to comprehend how the Commission could draw a causal link between potential increases in fixed and incremental costs with a tendency of MNOs to engage in fewer network investments, deteriorate quality or lower competitive pressure. Absence of a dynamic analysis of current and emerging competitive conditions. • Commission over-emphasised the extent to which the competitive dynamic might change as a result of a reduction of competitors from 4 to 3. Moreover, the Commission had over-estimated the importance of Three in the wholesale market, such that its disappearance was unlikely to change the competitive environment. 15
Thank you! With financial support from the Justice Programme of the European Union
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