Article 101 TFEU

Under Article 101(1) TFEU undertakings[1] are prohibited to engage in any collusion (enter into an agreement, make a decision to coordinate behaviour in an association or conduct tacit collusion)[2] which has as its ‘object or effect)[3]] the prevention, restriction or distortion of competition’. The list of examples of anticompetitive behaviour in Article 101(1) TFEU is not exhaustive, instead a broad range of behaviour can fall under the provision.[4] Whilst collusion with an anticompetitive object is always illegal the Courts seem to be slightly more flexible when it comes to the effects of a collusion. The General Court, however, rejected the thought that this establishes a rule of reason in EU competition law. Instead it stated that the actual weighing of pro-and anti-competitive aspects should only take place under Article 101(3) TFEU.[5] Finally, such a collusion has to ‘affect trade between Member States’ in order to fall under Article 101(1) TFEU which has been widely interpreted; the closing of a national market[6] and even potential effects[7] on intra-EU trade are sufficient under this criterion.[8] In addition to the elements inherent in the provision itself, any effect on competition must be appre- ciable.[9] In this respect object restrictions are always deemed appreciable,[10] while, according to the Commission’s De Minimis Notice,[11] effect restrictions below an aggregated market share of 10 % in horizontal[12] and a market share below 15 %[13] for each party in vertical cases is not deemed appreciable.[14]

A collusion prohibited by Article 101(1) TFEU is, according to Article 101(2) TFEU, automatically void,[15] unless it falls under the exemption of Article 101(3) TFEU.[16] Accordingly, a collusion can be exempted if it involves efficiency gains (‘improving the production or distribution of goods’ or ‘technical or economic progress’) of which the consumer receives ‘a fair share’ (they at least must not be worse off), is necessary for these gains to be achieved and does not completely prevent competition. According to Regulation 1/2003,[17] Article 101(3) TFEU has become directly applicable overcoming the necessity of prior notification. It also decentralised competition law giving more investigative and decisive powers to national competition authorities (NCAs). Nevertheless, the Commission’s approach still is the major guideline for the application of Article 101(3) TFEU. In its approach the Commission seems to strictly interpret the above mentioned criteria, focussing mainly on economic considerations.[18] There thus seems to be little chance[19] of exempting collusions in the HEI sector on grounds of public policy considerations under Article 101(3) TFEU.[20]

Exemptions are often provided for a specific kind of coordination in block exemptions regulations (BERs).[21] Regarding HEIs, three BERs in particular, could be useful. The Specialisation BER exempts specialisation agreements with a combined market share of below 20 %, unless they contain the hardcore restrictions price fixing, limitation of outputs or market division.[22] HEIs might utilise this BER for joint course agreements or joint research programmes. The Research and Development BER exempts vertical research cooperation agreements as well as horizontal ones with a combined market share which does not exceed 25 %, unless they contain certain hardcore restrictions and only if ‘the parties have full access to the final results’.[23] Finally, the Technology Transfer BER exempts bilat?eral technology transfer agreements related to the production of contractual goods and services, unless they contain certain hardcore restrictions or other excluded restrictions, if the aggregated market share does not exceed 20 % in horizontal cases and the market share of each party does not exceed 30 % in vertical cases.[24] Additionally, the vertical agreement BER[25] exempts all vertical collusions below a market share of 30 % of the buyer and the seller respectively, except for certain hardcore restrictions.[26]

In the following a few scenarios will be discussed in which HEIs might come into conflict with Article 101 TFEU. These are by no means exclusive; there may well be other scenarios where constraints arise from this provision aside from the ones discussed here. In individual cases there might, of course, always be the possibility of exemption.

  • [1] See above (Sect. 3.2.1 and 3.2.2) on the notion of ‘undertaking’ and on the fact that in conjunction with other Treaty provisions, Article 101 TFEU can also apply to state action.
  • [2] Tacit collusion takes place if there is some indication that there is an understanding betweenthe undertakings involved concerning their market conduct without them having formed anagreement. Whilst parallel behaviour is an indicator for a concerted practise it does not in itselfestablish it (48/69 Imperial Chemical Industries (Judgment of 14 July 1972, EU:C:1972:70) para8). See further Bishop and Walker 2010, p. 164 seq; Horspool and Humphreys 2014, p. 398 seq.
  • [3] As the provision states, the collusion must have as its object or effect the negative impact oncompetition. It is not necessary that both can be established. This was reinforced by the Court inC-501, 513, 515 and 519/06 P GlaxoSmithKline (Judgment of 6 October 2009, EU:C:2009:610)para 55.
  • [4] See further Lubbig 2008, para 20 seq.
  • [5] T-112/99 Metropole (Judgment of 18 September 2001, EU:T:2001:215) para 72 seq. In thisrespect it is also worth mentioning that certain potentially anti-competitive clauses which areessential for the main agreement (ancillary restraints), are to be considered together with the latter under Article 101(1) and, if necessary, (3) TFEU rather than individually (ibid para 104 seq,in particular 104, 115 seq).
  • [6] 8/72 Vereeniging van Cementhandelaren (Judgment of 17 October 1972, EU:C:1972:84) para 29.
  • [7] 56/65 Maschinenbau Ulm (Judgment of 30 June 1966, EU:C:1966:38) p. 249.
  • [8] On the criterion of effect on intra-Union trade see Commission Notice ‘Guidelines on theeffect on trade concept contained in Articles 81 and 82 of the Treaty’ OJ [2004] C 101/81. In particular the effect on trade must be appreciable (para 44 seq of the Notice). This is, however, notto be confused with the concept of appreciability regarding the impact on competition mentionedbelow (n 149 seq). See further on the effect of trade concept Chalmers et al. 2014, p. 1001;Horspool and Humphreys 2014, p. 411.
  • [9] First established by the Court in 5/69 Volk (Judgment of 9 July 1969, EU:C:1969:35) para 7.
  • [10] C-226/11 Expedia (Judgment of 13 December 2012, EU:C:2012:795) para 37.
  • [11] Commission Notice on agreements of minor importance which do not appreciably restrictcompetition under Article 101(1) of the Treaty on the Functioning of the European Union (DeMinimis Notice) OJ [2014] C 291/1 Section II 8 seq.
  • [12] Horizontal collusion is collusion between competitors, while vertical collusion is collusionbetween undertakings operating on different levels of production. In the latter, the concern israther the portioning of the internal market than consumer welfare which is why the thresholdregarding such collusion is higher. See Horspool and Humphreys 2014, p. 404 seq.
  • [13] See the De Minimis Notice for further details as regards markets share thresholds in specificcircumstances such as cumulative foreclosure effects.
  • [14] On Article 101(1) TFEU see further Bishop and Walker 2010, pp. 158, 160 seq, 163 seq;Horspool and Humphreys 2014, p. 395 seq. With a focus on HEIs see Amato and Farbmann2010, p. 8; Greaves and Scicluna 2010, pp. 15, 20; Gideon 2012, p. 175.
  • [15] This applies only to the anti-competitive parts of the collusion, other parts might retain validity. See Horspool and Humphreys 2014, p. 395.
  • [16] As regards public undertakings or undertakings with special or exclusive rights there is, ofcourse, also the exemption provided in Article 106(2) TFEU as discussed above (Sect. 3.2.3).
  • [17] Regulation 1/2003/EC on the implementation of the rules on competition laid down inArticles 81 and 82 of the Treaty OJ [2003] L 1/1 Article 1(2).
  • [18] See, for example, Commission White Paper on the modernisation of the rules implementing Articles 85 and 86 of the EC Treaty Programme No 99/027 OJ [1999] C 132/01 para 57describing the purpose of Article 101(3) TFEU (then Article 85(3) EC) as ‘to provide a legalframework for the economic assessment of restrictive practices and not to allow application ofthe competition rules to be set aside because of political considerations’. Also, see CommissionCommunication ‘Guidelines on the application of Article 81(3) of the Treaty’ OJ [2004] C101/08 para 42 stating that ‘the four conditions of Article 81(3) [now Article 101(3) TFEU] arealso exhaustive. When they are met, the exception is applicable and may not be made dependentupon any other condition. Goals pursued by other Treaty provisions can be taken into accountto the extent that they can be subsumed under the four conditions of Article 81(3) [now Article101(3) TFEU]’. See also Monti 2007, Chap. 4; in particular p. 89 seq, 102 seq and 122 seq andJones and Sufrin 2014, p. 254 seq. Especially on HEIs in this respect see Greaves and Scicluna 2010, p. 20.
  • [19] Townley has argued that, despite the Commission’s emphasis on economic efficiency in thesedocuments, a different reading may be possible in the light of former Commission decisions andjudgments by the Court and thus broader considerations could potentially be taken into accountunder Article 101(3) TFEU (Townley 2009).
  • [20] On Article 101(2) and (3) TFEU see Bishop and Walker 2010, p. 158 seq; Horspooland Humphreys 2014, p. 412 seq, 414 seq; Sauter 2015, p. 115 seq and, specifically on HEIs,Greaves and Scicluna 2010, pp. 16, 19 seq and Gideon 2012, p. 179.
  • [21] For a critical analysis of BERs in the system of competition law after Regulation 1/2003 seeMarcos and Sanchez-Graells 2010.
  • [22] Commission Regulation 1218/2010/EU on the application of Article 101(3) of the Treatyon the Functioning of the European Union to certain categories of specialisation agreements OJ[2010] L 335/43. A specialisation agreement requires that one or more competing undertakingsspecialise in one area and therefore receive goods or services from competing undertakings inthis area which they would have normally provided themselves (Article 2(1)). The BER also covers certain aspects of IPR related to specialisation (Article 2(2)).
  • [23] Commission Regulation 1217/2010/EU on the application of Article 101(3) of the Treaty onthe Functioning of the European Union to categories of research and development agreements OJ[2010] L 335/36.
  • [24] Commission Regulation 316/2014/EUC on the application of Article 101(3) of the Treatyon the Functioning of the European Union to categories of technology transfer agreements OJ[2014] L 93/17.
  • [25] Commission Regulation 330/2010/EU on the application of Article 101(3) of the Treaty onthe Functioning of the European Union to categories of vertical agreements and concerted practices OJ [2010] L 102/1.
  • [26] On BERs regarding HEIs see also Amato and Farbmann 2010, p. 8 seq; Greaves andScicluna 2010, pp. 16, 19 seq; Gideon 2012, p. 180. On BERs generally see Bishop and Walker2010, p. 158 seq; Horspool and Humphreys 2014, p. 414 seq.
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