52 Questions
Which of the following is NOT one of the objectives of the Common Agriculture Policy (CAP) according to the Treaty of Rome?
Promote urbanization
Which of the following is NOT one of the fundamental principles on which the CAP is implemented?
National competition
Which fund provides 70% of the budget for the Common Agricultural Policy (CAP)?
The European agricultural guarantee fund (EAGF)
What is the 'supply problem' associated with the CAP?
The surplus of agricultural goods
What percentage of recipients of direct income support from the CAP reap roughly 80% of the benefits?
20%
What was the initial purpose of the CAP?
To provide higher and stable prices to farmers
What is the Herfindahl-Hirschman Index (HHI)?
A measure of market concentration calculated by squaring the market share of each competing firm in the industry and summing the resulting numbers
What is the range of the HHI index (in case of %) ?
0 to 10,000
What does an HHI index of 1.0 indicate?
A market with a single monopolistic producer
Which companies were under investigation in the truck cartel case?
The six largest truck manufacturers in the industry
What is the definition of 'abuse of a relevant market position' according to EU law?
The exercise of economic power that prevents effective competition in a relevant market
What was Google fined for in the 2017 case?
Anti-competitive practices in the search engine market
What is the objective of examining proposed mergers?
To prevent harmful effects on competition
Which authority examines mergers involving companies active in several Member States and reaching certain turnover thresholds at the European level?
European Commission
What are the three remedies that the European Commission (and national authorities) can adopt in case of mergers?
Unconditional approval, conditional approval, and prohibition
What is the Temporary Framework?
A set of rules due to covid19
What are the characteristics of markets with strong network effects, economies of scale, barriers to entry and subsequent sustainability?
Discourage innovation and harm consumers
Which of the following statements accurately describes the distribution of land and farms in the EU?
Large farms account for 63% of the land and 70% of the farms are small.
What was a key issue of the CAP reforms implemented since the 90s?
Reducing market price support and replacing it with direct payments to producers.
What is the average share of direct payments in agricultural factor income in the EU?
24%
What is the difference between competitiveness and competition?
Competitiveness refers to a firm's ability to improve productivity and efficiency, while competition refers to the functioning of markets to improve welfare.
What is the role of the National Authorities of Competition in implementing EU competition policy?
To share the practical implementation of EU competition policy with the central services of the EC
What is the Leniency Programme of the EC?
A programme that provides partial exemption from fines to companies that report a cartel and provide documentation to dismantle it
What are some examples of prohibited agreements under Article 101 TFEU?
All of the above
What is a positive externality in the context of network effects?
When more people use a product, its value increases
What is the Digital Market Act and when did it enter into force?
It is a European Commission initiative to regulate digital platforms, and it entered into force in October 2022
What is the key factor in determining the relevant market for a competition analysis?
The degree of substitutability of products
What is the Herfindahl-Hirschman Index (HHI) used for?
To measure the degree of market competition based on market concentration
According to the Treaty of Rome, which of the following is NOT one of the objectives of the Common Agriculture Policy (CAP)?
Promote the use of GMOs in agriculture
What are the three fundamental principles on which the Common Agriculture Policy (CAP) is implemented?
Market Unity, Community preference, and Financial solidarity
What is the primary purpose of the Common Agricultural Policy (CAP)?
To provide income support schemes for farmers
What is the main drawback of implementing a price floor with variable levies?
Consumers end up paying for the price floor
What is the 'supply problem' associated with the CAP?
Overproduction of EU agricultural goods
What is the trend in the CAP's share of EU spending over the past 40 years?
It has decreased despite EU enlargements
Which of the following is a reason for a decrease in quantity produced?
Some costs are fixed
What is the purpose of the Digital Market Act?
To regulate ex ante digital platforms
What is a gatekeeper platform according to the Digital Market Act?
A platform that has significant impact on the internal market
What is the most commonly used approach to measure the degree of market competition?
Herfindahl-Hirschman Index
What is the purpose of examining proposed mergers?
To prevent harmful effects on competition
What was the Google case fined for in 2018?
Abusive use of Android to strengthen the dominant position of its search engine
What is the definition of 'abuse of a relevant market position' according to EU law?
The exercise of economic power that prevents effective competition in a relevant market
What was the outcome of the truck cartel case?
The major truck manufacturers were sanctioned for a single and continuous infringement of Article 101 TFEU
What is the share of small farms in EU agriculture in terms of land and number of farms?
70% of land and 8% of farms
What is the main difference between market price support and direct payments in the context of the CAP reforms?
Market price support is replaced by producer support in the form of direct payments
What was the main reason for the Treaty of Rome to establish EU competition policy?
To prevent collusion and state aid that could reduce political support for economic integration
What is the role of the European Commission in examining mergers?
Examine mergers between companies based outside the EU if they do business within the EU
What are the three remedies that the European Commission (EC) and national authorities can adopt in response to mergers?
Authorise the merger unconditionally, conditional approval, and prohibit the merger
What is the objective of EU State aid control?
To ensure that State aid complies with EU rules
What is the range of the Herfindahl-Hirschman Index (HHI)?
0 to 1.0 or 0 to 10,000 points
Which of the following is NOT a type of anti-competitive practice prohibited under the Treaty of Rome?
Monopolistic practices
Which of the following is responsible for the practical implementation of EU competition policy?
The European Commission
What is the main incentive for companies to denounce the existence of a cartel under the EC's Leniency Programme?
Full or partial exemption from fines
Study Notes
Common Agriculture Policy (CAP)
- The CAP's objectives do not include the protection of the environment.
- The primary purpose of the CAP is to increase agricultural productivity and ensure a fair standard of living for farmers.
- The CAP is implemented based on three fundamental principles: market orientation, sustainability, and simplification.
EU Competition Policy
- The Herfindahl-Hirschman Index (HHI) is used to measure the degree of market competition.
- The HHI index ranges from 0% to 10,000%, with higher values indicating a more concentrated market.
- An HHI index of 1.0 indicates a monopolistic market.
- The European Commission fined Google in the 2017 case for abusing its dominant position in the search engine market.
- The main objective of examining proposed mergers is to ensure that they do not significantly impede effective competition.
- The European Commission examines mergers involving companies active in several Member States and reaching certain turnover thresholds at the European level.
- The three remedies that the European Commission and national authorities can adopt in case of mergers are: prohibition, conditional clearance, and divestiture.
Competition Analysis
- The key factor in determining the relevant market for a competition analysis is the product and geographic market.
- The Digital Market Act aims to regulate digital platforms with significant market power, and it entered into force in 2022.
- A gatekeeper platform is a digital platform with significant market power, as defined by the Digital Market Act.
Agriculture in the EU
- The average share of direct payments in agricultural factor income in the EU is around 30%.
- The majority of recipients of direct income support from the CAP reap roughly 80% of the benefits.
- The share of small farms in EU agriculture is around 70% in terms of land and 90% in terms of the number of farms.
EU State Aid Control
- The objective of EU State aid control is to ensure that Member States do not distort competition by providing unfair advantages to certain companies.
Cartels and Anti-Competitive Practices
- The Leniency Programme of the EC provides a reduction in fines for companies that denounce the existence of a cartel.
- The main incentive for companies to denounce the existence of a cartel under the EC's Leniency Programme is to avoid or reduce fines.
- The truck cartel case involved companies that colluded to fix prices and reduce competition.
- The definition of 'abuse of a relevant market position' according to EU law is the use of a dominant position to restrict competition or exploit competitors, customers, or suppliers.
Test your knowledge on the reasons for decrease in production costs with this quiz. Learn about fixed costs and network effects, and understand how they impact the value of a product. Explore the concept of positive externalities and the "fax effect", and discover how indirect effects can occur on a platform with multiple groups.
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