An Overview of Antitrust in the European Union

• Pages: 173-216

173

CHAPTER XI

AN OVERVIEW OF ANTITRUST IN THE

EUROPEAN UNION

A. The Principal Antitrust Rules

1. Primary Legislation

The primary antitrust (or “competition law”) legislation of the

European Union (EU) is found in Articles 101 and 102 of the Consolidated

Version of the Treaty on the Functioning of the European Union

(TFEU).

744

Articles 101 and 102, which respectively cover

anticompetitive agreements and abusive unilateral conduct by dominant

undertakings, apply across all twenty-eight EU Member States of the

EU.

745

The key substantive provisions of Articles 101 and 102 are

considered in more detail in this chapter in parts B and C, respectively.

The TFEU also contains provisions governing public subsidies or “state

aid,” which regulate the extent to which Member States can support private

744. Consolidated Version of the Treaty on the Functioning of the European

Union art. 102, Sept. 5, 2008, 2008 OJ (C 115) 47 (effective Dec. 1, 2009)

[hereinafter TFEU]. EU Treaty articles are occasionally renumbered.

Articles 101 and 102 were until relatively recently Articles 81 and 82,

respectively, having previously been Articles 85 and 86. To avoid

confusion, the new nu mbering is used throughout this chapter.

745. As of August 3, 2016, the EU Member States were Austria, Belgium,

Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland,

France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,

Luxembourg, Malta, Ne therlands, Pola nd, Portugal, Romania, Slovakia,

Slovenia, Spain, Swede n, and the United Kingdom. Because of its Brexit

referendum decision, the United Kingdom will begin the formal process of

leaving the EU. The Uni ted Kingdom will re main a member of the EU

during this process unti l negotiations have co ncluded. Although the y are

not Member States of the EU, EU competition la w applies in a similar

manner in Norway, Ic eland, and Liechte nstein (which, toge ther with the

EU countries, comprise the European Economic Area (EEA)), by virtue of

the EEA Agreement. Almo st all of these countr ies have their o wn

competition laws, which in most cases are based closely on EU law. It is

outside the scope of this chapter to consider the competition law of each

individual country.

174 Insurance Antitrust Handbook, 3d Ed.

enterprises, directly or indirectly, through state funds. While large cross-

border mergers are reviewable at an EU level, the legislation relating to

merger control is found not in the TFEU, but rather in secondary

legislation.

746

The antitrust provisions of the TFEU must be read in conjunction with

the objectives and principles of the EU, as set out in t he TFEU and the

Consolidated Version of the Treaty on European Union (TEU).

747

Article

3(3) of the TEU provides that the EU’s objectives include the

establishment of an internal market and to work for “the sustainable

development of Europe” based on inter alia a “highly competitive social

market economy.”

748

The EU has exclusive jurisdiction in establishing the

antitrust rules necessary for the functioning of the internal market.

Primary EU legislation has direct effect in EU Member States,

meaning persons in any Member State may invoke EU law against the state

or against other persons. This means that Articles 101 and 102 may be

invoked in proceedings before the domestic courts of any Member State.

Member States (whether through a national competition authority or a

domestic court) have concurrent powers, with the European Commission

(Commission), to enforce Articles 101 and 102 TFEU in their own

territories. Most Member States also have equivalent national rules that

may apply concurrently with, or instead of, Articles 101 and 102 TFEU.

Member States must not enact or maintain in force measures contrary to

the EU antitrust provisions,

749

and are under a duty of sincere cooperation

in assisting other Member States and the EU in carrying out tasks that flow

from the EU Treaties.

750

746. This subject is outside the sco pe of this chapter; further details can be found

on the European Commission’s website, available at

ec.europa.eu/competition/state_aid/overview/index_en. html. This chapter

also does not address EU law governing procurement by public bodies. See

parts A.2 and D of this chapter.

747. Consolidated Version of the Treaty on European Union, March 30, 2010,

2010 OJ (C 83) art. 13 [hereinafter TEU].

748. As clarified by a Protocol to the TFEU, the internal market “includes a

system ensuring that competition is not distorted” (Consolidated version of

the Treaty on Europe an Union-PROTOCOLS-Protocol (No 27) on the

internal market and competition, May 9. 2008, 2008 OJ (C115) 309).

749. TFEU, supra note 1, Article 106(1).

750. TEU, supra note 4, Article 4(3).

An Overview of the Antitrust in the European Union 175

2. Secondary Legislation

The main secondary legislation relating to Articles 101 and 102 is the

Council Regulation (EC) No 1/2003 on the implementation of the rules on

competition laid down in Articles [101] and [102] of the Treaty

751

(Regulation 1/2003). As with primary legislation, regulations also have

full direct effect in EU Member States.

752

Under Regulation 1/2003,

national courts and national competition authorities (NCAs) have an

obligation to apply Articles 101 and 102 where an infringement of those

provisions may affect trade between Member States.

753

This does not

preclude them from adopting or applying their own equivalent national

legislation, provided that it is not inconsistent with Articles 101 and

102.

754

This is without prejudice to the application of provisions of

national law that predominantly pursue an objective different from Articles

101 and 102.

755

The main EU legislation governing mergers, acquisitions and certain

structural joint ventures is also contained in secondary legislation, namely

the Council Regulation (EC) No 139/2004 of 20 January 2004 on the

control of concentrations between undertakings (the EC Merger

Regulation) (EUMR).

756

Block exemption regulations provide for certain safe harbors from

Article 101 for specific categories of agreement that fall within their

protective scope. As explained in part B.2.a, infra, one of these addresses

certain types of agreement and practices common in the insurance sector.

751. Council Regulation (EC) No 1/2003 on the imple mentation of the rules on

competition laid down in Articles [101] and [102] of the Treaty, 2003 OJ

(L1) 1 [hereinafter REGULATION 1/2003]. All key EU legislation, together

with relevant guidance, is accessible on the website of the Commission’s

Directorate General for Competition, available at

ec.europa.eu/competition/index_en.html.

752. TFEU, supra note 1, Article 288.

753. REGULATION 1/2003, supra note 8, Recitals 6 and 7. This is a relatively low

threshold in practice and may be met, for example, even where an

agreement is primarily concerned with trade within a single Member State.

754. REGULATION 1/2003, supra note 8, Article 3(2) . This means, for example,

that an agreement that has been found to be compatible with EU Article

101 cannot be ruled unlawful under national competition law.

755. REGULATION 1/2003, supra note 8, Article 3(3).

756. Council Regulation (EC) No 139/2004 of 20 January 2004 on the control

of concentrations between undertakings (the EC Merger Regulation), 2004

OJ (L24) 1 [hereinafter EUMR].