Note that the EU has its roots in economics; this makes the competition law a very important area. The idea of a controlled free market is a little incongruous with the idea of a free market, but then again so is the idea of positive discrimination.

- This article prohibits collusion between undertakings

Article 82

- places restrictions on large companies freedom to compete

Territorial Reach

There is a very federalist approach which doesn't usually affect national trade. EU competition law is not the same as national competition law. This area of law affects any undertaking which carries on cross border trade in the EU even if its base is outside the union (se the wood pulp case).

The Purpose For Competition Law

look at Art 3(g) -[ aim ] a system ensuring that competition in the internal market is not distorted.

This aims to provide a system between a perfectly competitive system and a monopolistic theory of competition - Workable competition is the level needed to attain the objectives of the treaty. See Metro case (26/76)

The primary goal of EC competition law is to maintain a competitive single European market, to prevent any single undertaking (or cartel) from distorting the market.

Undertakings

"entreprise" in the original French text- very broad definition. Not just companies in the strict legal sense. The commission regulates undertakings sub art 249 EC with decisions aimed directly at the parties concerned. These decisions are challengable only under Art 230 to the ECJ.

Consequences of being an undertaking.

1. Private legal persons cannot be investigated as an undertaking. - very important in terms of Human Rights; the rights that the commission has are very powerful and quite invasive. I’d parallel them to the powers of customs and excise which are closer to prerogative powers than authority conferred by statute.

2. In UK law persons legal are distinct entities. Under EU law, parent and subsidiary groups are part of the same undertaking and have no separate legal character sub Art 81 EC

3. The maximum fine is 10% of TURNOVER (this is sufficient to put most businesses out of business; for example, UK supermakets claim to make about a7% profit on turnover. This profit is currently under attack as being excessive.

4. Don't have to make a profit to be an undertaking. Charitable or merely administrative organisations can also be affected.

Direct Effect

Articles 81 & 82 are horizontally directly effective. The commission takes most of the cases; very few private individuals actually go to law over breaches of these articles.

The Role Of The Commission

There are 3 main courses of action open to the commission.

1. Notifications; This is where an Undertaking approaches the commission to ask for advice on a course of dealing or action. Article 81 (3) gives the commission the power to endorse agreements and/or grant exemptions (see later notes). This can be used as a delaying tactic by an undertaking as it takes time to say no!

2. Complaints by 3rd parties to the commission

3. Investigations by the commission - they have big powers.

Regulation 17/62

Commissions investigations (sub art 80 and 82ec)

Under Arts 11 & 14

Article 11 of 17/62

- the commission may obtain all necessary information from undertakings; this is basically a request procedure.

Article 14 of 17/62

- The commission can undertake all necessary investigations on an undertaking; this is the bite, and can be seizure

Limitations of Art 11 of 17/62

- Note that the commission is judge jury and executioner in these cases- Montiesquieu'd turn in his grave.

1. Necessary investigations

Cyclic test; if the commission thinks it's necessary, it's necessary.

In UK law companies, although legal entities, are not people. In EU law they are. this gives them rights under the ECHR.

Article 11(3) give the commission the right to request information. This request can be refused or accepted, but if accepted must receive 100% co-operation. Non- compliance with an article 11(3) request usually leads to an article 11(5) demand. failure here carries a 5000 € fine followed by a 1000 € per day fine (sub 14 of 17/62)

Usual procedure goes art 11(3) à art11(5), then on to...

Article 14

Note that an article 14 action is more serious. Commission is entitled

1. (a) to examine books and other business records

(b) to take copies of or extracts from the books and business records

(c) to ask for oral explanations on the spot

(d) to enter any premises, land and means of transport of undertakings.

2. Authorisation must be in writing specifying subject matter and purpose and the possible penalties. Commission shall inform the relevant authorities of the Member state "in good time"

3. undertakings shall submit to decision of commission which will specify the purpose and subject matter for the investigation.

4. the commission will take decisions above post ms consultation.

5. Member State officials may if requested help the Commission

6. compliance pre 1.10.62

Note that 11(3) of 17/62 can be skipped.

Rights of Entry

see Panasonic v commission – unnecessary "dawn raids"

Searches and rights of entry are a mater of national equivalence; consequently if the Italian authorities have the right of forced entry searches, then so do the commissioners in that country. However, if the rights to force search do not exist in Germany then the commission cannot force entry. Procedural measures are supposed to be followed as well, I think.

On the spot questions?

Right not to self incriminate; no such explicit right sub 17/62 (14)[1]{c} but documentary evidence must be produced, oral evidence can be refused; this is even though the AG said that such a right was "intellectually Incompatible" with the wording of the Regulation, see Orkem case (374/87)