note I

Relevant markets and the SSNIP test

• The relevant market is the framework used to identify the players in a market to assess anticompetitive effects of conduct (anticompetitive agreements, mergers, etc.).
• The relevant market comprises two dimensions:
  • Product dimension: the market that includes all products considered interchangeable or substitutable by consumers.
  • Geographic dimension: the territorial scope.
• SSNIP test (Small Significant Non-transitory Increase in Prices): used to determine market boundaries by testing a small but meaningful price increase.
  • Typical threshold: a price increase in the range of 5\% to 10\% that is stable and would trigger consumer substitution.
  • Example: if a Netflix subscription increased by 10\% and consumers shift to alternatives like Amazon Prime, the two offers are interchangeable and belong to the same relevant market.
• Application: Understanding the relevant market helps determine how many players are in the market and whether conduct is capable of restricting competition.
• Related concepts mentioned: anticompetitive agreements, mergers, and the need to assess market power within the defined relevant market.

Article 101 TFEU: overview and scope

• Article 101 TFEU prohibits agreements, decisions by associations of undertakings, and concerted practices that may affect trade between Member States and tend to hinder competition within the internal market.
• Prohibited forms (Art. 101(1)):
  1. Directly or indirectly fix purchase or selling prices or any other trading conditions;
  2. Limit or control production, markets, technical development or investment;
  3. Share markets or sources of supply;
  4. Apply dissimilar conditions to equivalent transactions with other trading parties, placing them at a competitive disadvantage;
  5. Make the conclusion of contracts subject to acceptance of supplementary obligations unrelated to the subject of the contracts.
• Paragraph 2: any agreement, decision, or concerted practice prohibited under paragraph 1 is automatically void.
• Paragraph 3: provides for potential inapplicability of the prohibition in certain cases where the agreement or practice contributes to improving production or distribution and to technical or economic progress, while allowing consumers a fair share of the resulting benefit, and is not essential to the attainment of objectives; and does not excessively restrict competition or eliminate competition in a substantial part of the products concerned.
• Introductory context (Article 101 TFEU):
  • Art. 101 TFEU is a foundational competition provision frequently applied, often leading to high-profile decisions with significant fines for hard core restraints (cartels).
  • The provision concerns a practice central to business life: the conclusion of agreements, which coordinates behavior and can affect output, prices, or innovation, thereby impacting consumer welfare.
  • It has formed the backbone of EU competition law since 1957; the provision comprises a broadly framed prohibition and a subsequent justification (Art. 101(3)).
• Structure emphasized: two core parts are the prohibition (paragraph 1) and the justification (paragraph 3), with paragraph 2 establishing automatic nullity and civil effects.

Forms of coordination and evidence standards under Art. 101(1)

• Art. 101(1) targets coordinated behavior between undertakings; it covers “agreements, decisions and concerted practices” that affect trade and restrict competition.
• The framework uses a functional approach: the form of coordination matters less than its effects; two or more independent undertakings must be involved.
• Vertical cooperation (producer–distributor–retailer): generally less problematic; requires express or tacit acquiescence of downstream partners to an agreement.
  • Bayer case: Joined cases C-2/01 P and C-3/01 P (change in standard terms by Bayer for Adalat distribution in Spain). Bayer sought to limit parallel exports by Spanish wholesalers, but the policy largely failed due to wholesalers continuing parallel exports.
  • Evidence standard: the party relying on Art. 101(1) must show express or tacit acquiescence; the standard for evidence is raised in relation to vertical restraints.
• Horizontal restrictions (coordination among undertakings in the same market): lower evidentiary bar; classic cartels can be proved by a single meeting or routine exchange of information, even if no explicit agreement on responses was reached.
  • Cartel facilitators: Commission and Court accept inclusion of facilitators in Art. 101(1) enforcement.
  • AC Treuhand case: Case C-194/14 P AC Treuhand AG v Commission; fined for facilitating collusion among chemical proceedings across several cartels.
• Decisions by associations of undertakings: the term “decision” is broad and includes acts by an association that coordinate conduct of its members or those under its authority.
  • Examples of decisions: constitution of a trade association, regulations governing the operation of an association, an agreement entered into by an association, recommendations by an association that are significantly influential on competition.
  • Application: the association itself may be fined for violations under Art. 101(1).
• Concerted practices: inclusion of concerted practices within Art. 101 means conduct not attributable to an agreement or decision may still infringe Art. 101(1).
  • ICI v Commission (Dyestuffs): fines for price fixing through concerted practices; evidence included similarity of price increases, timing of instructions between parent companies, and informal contact.
  • Suiker Unie v Commission (Sugar Cartel): presence of concerted practices to protect positions of two Dutch producers; defendants denied a formal plan.

The concerted-practice test: key propositions

• A concerted practice involves a knowing substitution of practical cooperation for the risks of competition.
• It does not require an actual plan; it can arise from direct or indirect contact that influences market conduct or discloses future conduct.
• There is a presumption that participants consider information exchanged between them; proving actual market effects is not always required.
• Reciprocity is implied: if one competitor discloses its intended conduct or response to another (and the other accepts or requests it), this satisfies reciprocity.

Object vs. effect and the requirement of trade impact

• Object or effect: the framework connects the nature of cooperation to competition, and determines whether competition is restricted or distorted.
• Object category: cooperation is so likely to restrict competition that no further proof of actual effects is required (no need to quantify effects).
• Effect category: where object is not established, the effects on competition must be identified and proven in the concrete case.
• Dole Food Company line of cases (Case C-288/13 P): some collusive behavior may be deemed so likely to have negative effects on price, quantity, or quality that proving actual effects may be unnecessary when the object is restrictive.
• Effect on trade between Member States: Art. 101(1) is triggered if there is an effect on trade between MS; Consten & Grundig established that positive effects do not exclude applicability, and agreements covering a large share of trade in a market or spanning an entire territory can still fall under Art. 101(1).

Article 101(3) TFEU: the four cumulative conditions and practical challenges

• Four cumulative conditions must be satisfied for an agreement to be exempt from the prohibition under Art. 101(1):
  1. The cooperation must result in technical or economic progress, or lead to better production or distribution; i.e., objective efficiency gains from cooperation.
  2. The cooperation must allow consumers a fair share of the resulting benefits, ensuring that gains are not solely enjoyed by the parties.
  3. The restrictions must be proportionate to the objective; i.e., the restriction must be necessary and proportionate to achieve the objective (no excessive restraints).
  4. There must remain sufficient residual competition after the cooperation.
• Difficulties in applying Art. 101(3):
  • How certain must the expected benefits be ex ante? Technological and economic progress is often uncertain; evidence is sometimes imperfect.
  • Possible welfare transfer: benefits to some groups may come at the expense of others; the general consumer welfare standard aims to ensure a fair share to consumers.
  • Proportionality open wording: debates about which sub-test to apply (suitability/causality, necessity, proportionality strictu sensu).
  • Regulation and enforcement context: Commission had exclusive right to apply Art. 101(3) until 2004; Regulation 1/2003 reduced this centralization, with BERs (Block Exemption Regulations) becoming a dominant practical tool.
• Block Exemption Regulations (BER): practical application of Art. 101(3) through exemption for entire categories of agreements, subject to conditions (e.g., market-share caps, prohibited clauses).
  • BERs encourage compliance by providing a narrow interpretation of Art. 101(3) and offering a safe harbor for covered agreements.
  • Courts have indicated that checking BER compliance is a practical route to ensure EU law compatibility.

Article 101(2) TFEU: automatic nullity and enforcement by Member States

• Article 101(2) provides for automatic nullity of all agreements falling under Art. 101(1) that do not meet the conditions set out in Art. 101(3).
• Civil-law effects of this sanction (such as severability of clauses) are a matter for national civil law, provided that the law complies with the principles of:
  • equivalence (treatment of similar cases alike) and
  • effectiveness (enforcement of EU law effects).
• The emphasis on strict nullity and the potential for over-enforcement has led to a preference for narrow, objective divisions (objects) and the use of BERs as a practical compliance tool.
• The enforcement framework under Art. 101(2) and the interplay with national law shapes how restrictions are identified, limited, and remedied in practice.

Practical implications and case references (selected)

• Key cases and references:
  • Bayer v. Commission (C-2/01 P, C-3/01 P): vertical acquiescence must be shown to establish an Art. 101(1) infringement in distribution arrangements.
  • AC Treuhand AG v. Commission (Case C-194/14 P): cartel facilitators can be liable under Art. 101(1).
  • ICI v Commission (Dyestuffs) (Case C-222/98 P): concerted price-fixing through coordinated actions inferred from indirect evidence.
  • Suiker Unie v Commission (Sugar Cartel) (Case C-13/99 P): concerted practices to protect domestic producers.
  • Consten & Grundig (Case 56/62): positive effects do not negate applicability of Art. 101(1); trade effects are central.
  • Dole Food Company Inc. and Dole Fresh Fruit Europe v Commission (Case C-288/13 P): object-based presumptions for restrictive conduct when negative effects on competition are highly likely.
• Practical tools and concepts:
  • Block Exemption Regulations (BER): category-wide exemptions with thresholds and listed restrictions; encourage compliance by providing predictability and reducing enforcement costs.
  • Focus on effects vs. form: the functional approach emphasizes the actual impact on competition rather than the formal label of the conduct.
  • Emphasis on the need to assess market definition, the nature of coordination, and the balance between efficiency gains and consumer welfare.

Quick glossary of core concepts

• Relevant market: product and geographic scope used to assess competitive constraints.
• SSNIP: Small Significant Non-transitory Increase in Prices; used to delineate markets.
• Undertakings: entities participating in market activities (firms, companies, etc.).
• Object vs. effect: categorization of restraints; object restraints presuppose market impact; effect restraints require proof of actual impact.
• Block Exemption Regulation (BER): category-based exemptions from Art. 101(1) subject to conditions like market-share caps and prohibited clauses.
• Concerted practice: coordination between firms that substitutes practical cooperation for competition without a formal agreement.
• Acquiescence: consent or passive acceptance by downstream partners in a vertical arrangement.
• Cartel facilitators: actors who aid or enable the cartel without being a direct participant in the agreement itself.
• Equivalence and effectiveness: principles governing the effect of national law on the enforcement of EU competition law.

Note: All numerical references and percentages are presented in LaTeX format where applicable, such as 5\% and 10\%, and all mathematical or formal expressions are wrapped in … as required.