Competition Law and Policy in the EC and UK

Transcription

1 Competition Law and Policy in the EC and UK Fourth Edition Barry J Rodger and Angus MacCulloch Routledge-Cavendish Taylor &. Francis Group LONDON AND NEW YORK

2 Contents Table of cases Table of legislation Table of statutory instruments Table of EC legislation Table of decisions Abbreviations Preface XV xxvii xxxi xxxiii xxxix xlvii xlix 1 Introduction to competition policy and practice Competition law background Monopoly Cartels Mergers 'Pure competition' objective State regulation - State aid Economics of competition law and terminology Politics of competition law Competition policy objectives Prevention of the concentration of economic power Regulation of excessive profits and fairer distribution of wealth Protection of consumers Regional policy Creation of unified markets and prevention of artificial barriers to trade Small is beautiful US antitrust law and policy Development of Community competition law Development of UK competition law Criminal law Statutory development

3 viii Competition Law and Policy in the EC and UK Comparison of competition law objectives under Community and UK law and policy 29 Community competition policy objectives 29 UK competition policy objectives 31 Further reading 33 Competition policy general 33 The consumer interest and competition policy 33 EC competition policy development 33 UK competition policy development 34 US background 34 Discussion 34 2 Enforcement of Community and UK competition law 35 Introduction 35 Ep enforcement framework 36 Outline 36 Decentralised Community competition enforcement 39 Relationship between Community and national law 43 The European Commission 46 Initiation 48 Decision-making 56 Rights of the defence 60 Review of Commission decision-making 62 Ancillary enforcement issues 65 Administrative enforcement in the UK 66 Introduction 66 The Competition Act Competition Appeal Tribunal (CAT) 74 The Enterprise Act Initiation 76 Investigation and reporting 79 Enforcement 80 Cartel offence investigations and director disqualification 81 Private enforcement of EC and UK competition law 83 Co-operation between courts and authorities 89 Globalisation and extraterritoriality 90 Extraterritoriality 90 Subject matter jurisdiction 91 Community competition law and extraterritoriality 92 Resistance to extraterritorial application 94 International co-operation and global competition rules 95

4 Contents ix Further reading 97 Regulation , The Network Notice and the ECN 97 UK competition law reform, the Competition Act 1998 and the Enterprise Act Private enforcement 98 Globalisation 98 Discussion 98 3 The control of dominance 101 Introduction to Art 82 of the EC Treaty 101 Undertakings and the effect on trade between Member States 102 Dominant position 104 The relevant market 104 Dominance 110 Barriers to entry 112 Criticism 116 Abuse 117 Exploitative abuses 119 Excessive prices 119 Unfair conditions 120 The quiet life 121 Exclusionary abuses 121 Export bans 123 Pricing strategies 123 Tying and leverage 128 Mergers 129 Refusal to supply 130 Intellectual property rights 134 Collective dominance 136 Control of dominance in the UK 141 Introduction 141 Reform of UK anti-monopoly laws 141 The Competition Act the Chapter IIprohibition 143 Consistency with Community law 145 Guidelines on the prohibition 146 Practice and case-law to date 147 The Enterprise Act Investigation and information gathering 155 Market investigation references 156 The reference test: prevention, restriction or distortion of competition 157 The reporting stage 158

5 x Competition Law and Policy in the EC and UK The competition test 159 Consumer protection 165 Remedial action 166 Further reading 168 Article Chapter II prohibition 169 The Enterprise Act 2002, Pt Discussion Control of anti-competitive agreements 171 Introduction to Art 81 of the EC treaty 171 Article 81(1) 172 Agreements, decisions of associations and concerted practices 173 Undertakings 178 Effect on interstate trade 179 Prevention, restriction or distortion of competition 180 Agreements of minor importance 189 Within the Common Market. 190 Article 81(2) 190 Article 81(3) 192 The exception rule 193 The four conditions for inapplicability 194 Block exemptions 196 Article 81 and the national courts 199 Introduction to UK controls on anti-competitive agreements 200 The 1976 Restrictive Trade Practices legislation 200 Reform of UK restrictive trade practice laws 202 The Competition Act The Chapter I prohibition ~ an outline 203 The operation of the prohibition 204 Practice and case'law to date 211 Notification/Exemption 212 Resale price maintenance 214 Vertical restraints 217 The effects of vertical restraints 217 General Commission approach to vertical restraints under Art 81(1) 220 Particular types of restriction 221 US rule of reason 223 The Court and the rule of reason 224 Article 81 (3) - the old Block Exemption Regulation 1983/ The reform of vertical restraints policy 226

6 Contents xi The Vertical Agreements Regulation 227 Introduction 227 Vertical agreements 228 Market share threshold 228 Hard core restraints 229 Other excluded obligations 230 Withdrawal of the Block Exemption Regulation 230 The Guidelines 230 Impact of the reform package 231 Exclusive distribution 231 Exclusive purchasing or single-branding agreements 234 Conclusion 236 UK competition law and vertical restraints 236 Introduction 236 Reform and the 2004 Order 237 Further reading 238 Article The Competition Act 1998; the Chapter I prohibition 238 Vertical restraints, the US rule of reason and the Vertical Agreements Regulation 239 Discussion Cartels: deterrence, leniency and criminalisation 241 Introduction 241 The history of European cartels 242 The early history of the EC provisions 244 Cartel wars: the cartel strikes back 245 The contemporary view of cartels 246 Optimal deterrence 247 Punishment 249 Administrative corporate fines in the EC 249 Administrative corporate fines in the UK 252 The problem with corporate fines 253 Increasing financial penalties: damages 254 Individual penalties: criminalisation and disqualification 258 Increasing punishment 261 Increasing the likelihood of catching cartels 261 Leniency policies 262 Direct settlement 269 The future of cartel regulation 271 Further reading 272 General 272

7 xii Competition Law and Policy in the EC and UK Fines 273 Private actions 273 Criminalisation 273 Leniency 273 Discussion Control of mergers 275 Introduction 275 Historical background to the Community controls 277 The Merger Regulation 280 The scope of the Regulation 280 The 'Community dimension' and case allocation 282 Mandatory notification and suspension 288 Appraisal procedure 289 Basis of the appraisal 295 Joint ventures 304 International mergers 306 Background to UK merger control 307 The Fair Trading Act 1973 and reform 308 Part 3 of the Enterprise Act The referral stage 313 The Competition Commission (CC) investigation and report 326 Remedial action 335 Review 337 Further reading 338 General 338 Merger regulation 338 UK merger control 339 Discussion State aid and State regulation 341 Introduction to State aid 341 Article 87(1): the Prohibition of State Aid 344 What constitutes 'aid'? 344 Effect on intra- Community trade 347 Distortion or potential distortion of competition 348 The market economy investor principle 349 Services of General Economic Interest 352 Exemptions 354 Article 87(2): mandatory exemptions 354

8 Contents xiii Article 87(3): discretionary exemptions Frameworks and guidelines Procedure and remedies Notification Competitors' remedies Recent and future developments State regulation and intervention Measures adopted by the State Article 81 Article 82 Article 86(3) The State entities as undertakings State regulation and undertakings Further reading General reading State aid State regulation Discussion 8 Overview: policy developments and practical implications Introduction Policy level Laissez-faire competition laws? Certainty and predictability v economic analysis Globalisation and international co-operation in competition law enforcement Changes in substantive Community competition law Developments in the enforcement of Community competition law New directions for competition law The revised UK competition regime post-competition and Enterprise Acts Practical implications Instituting an effective compliance programme Pigeon-holing in market analysis Whistle-blowing and leniency The position of competitor and customer complainants Discussion Glossary of key competition related terms Index