Answer ... Article 101(1) generally prohibits as incompatible with the internal market “all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market”.
Answer ... The following types of conduct are prohibited by Article 101(1) TFEU where they may affect trade between member states and have as their object or effect the prevention, restriction or distortion of competition within the internal market:
- agreements between undertakings;
- decisions by associations of undertakings; and
- concerted practices.
Agreements, decisions and concerted practices prohibited in particular are those which:
- directly or indirectly fix purchase or selling prices or any other trading conditions;
- limit or control production, markets, technical development or investment;
- share markets or sources of supply;
- apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; or
- make 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.
Article 101(2) states that any agreements or decisions prohibited pursuant to Article 101(1) will be automatically void and unenforceable without any need for a Commission’s decision finding a breach of Article 101.
An exemption from Article 101(1) may apply under Article 101(3) in the case of agreements and decisions that contribute to improving the production or distribution of goods or promoting technical and economic progress, so long as consumers are allowed a fair share of the resulting benefit and the agreement does not impose anticompetitive restrictions unnecessary for the achievement of those objectives or create the possibility of eliminating competition for a substantial part of the products in issue.
Answer ... The EU cartel regime imposes civil rather than criminal liability. However, some Member States, such as Denmark and the United Kingdom, provide for criminal sanctions for cartel offences; while in others, such as France, Greece and Romania, cartel-type behaviour may be prosecuted under the national fraud offences.
Answer ... Article 101 TFEU applies expressly only to ‘undertakings’.
According to EU case law, an ‘undertaking’ is an “entity engaged in an economic activity, irrespective of its legal status and the way in which it is financed”. This means that, as long as they carry out an economic activity, individuals, as well as companies and unincorporated bodies, may fall within the scope of Article 101 TFEU – self-employed persons, for example, have been found in some cases to fall within the definition of ‘undertaking’. Article 101 TFEU does not apply to individual employees or directors of an undertaking.
Both individuals and companies may also be subject to criminal prosecution under national regimes (see question 2.3).
Answer ... Article 101 TFEU is applied to undertakings and companies irrespective of where they are located, as long as the cartel agreement or practice either is implemented inside the EU or produces effects inside the EU (see question 2.6). In addition, a non-EU parent company may be held liable for the anti-competitive behaviour of a subsidiary located in the EU over which the parent company exercises decisive influence.
Foreign companies can, and have been, prosecuted under the cartel legislation. For example, in March 2018 the Commission fined eight Japanese companies €254 million for participating in a cartel relating to the supply of electronic capacitors.
Answer ... The cartel legislation has extraterritorial reach. As set out by the Commission Notice: Guidelines on the Effect on Trade Concept Contained in Articles 81 and 82 of the Treaty, anticompetitive agreements or practices need not be concluded in the European Union, and the undertakings entering into them need not be based in the EU, for Article 101 TFEU to apply.
Instead, the key test for Commission jurisdiction is whether the agreement or practice either is implemented within the EU or produces effects within the EU. Under the implementation doctrine, developed in the Wood Pulp I case, the decisive factor is the place where the agreement, decision or concerted practice was implemented, and not necessarily where the agreement was entered into. The effects test requires the existence of a foreseeable “immediate and substantial effect” in the EU. There has not always been straightforward consensus over the application of the implementation or effects test. In the Intel case, the Court of Justice of the EU (CJEU) affirmed the General Court’s approach that the implementation doctrine and qualified effects doctrine are simply alternative tests for jurisdiction.
Answer ... The limitation period applicable to the Commission’s power to impose fines or periodic penalty payments is five years for substantive infringements of EU competition law (eg, participating in a cartel which breaches Article 101 TFEU and three years for procedural infringements relating to requests for information and the conduct of inspections. Time runs from the date the infringement is committed (except in the case of a continuing or repeated infringement, where the time runs from the date on which the infringement ends).
Actions taken by the Commission or a NCA for the purpose of its investigation (eg, issuing a statement of objections) interrupt the limitation period and restart the clock from the beginning. If the decision is the subject of pending proceedings before the CJEU, the period is suspended (see Article 25 of Regulation 1/2003). The limitation period, including any such interruptions, cannot exceed 10 years.
In relation to the Commission’s power to enforce its adopted decisions imposing fines or periodic penalty payments, there is an additional limitation period of five years from the date on which the decision became final (see Article 26 of Regulation 1/2003). Notification of a decision varying the amount of the fine or payment interrupts this period and restarts the clock; as does any action of the Commission or an NCA to enforce payment (see Article 26 of Regulation 1/2003). If time to pay is allowed or enforcement of payment is suspended pursuant to a CJEU judgment, the limitation period is suspended (see Article 25 of Regulation 1/2003).