Topic 2: Competition law 1: Regulation of International Free Competition

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Questions and Answers

What does Article 101 TFEU primarily prohibit?

Agreements that restrict competition (correct)

Mergers that reduce market share

Abuse of a dominant market position

Price discrimination practices

Which of the following acts is banned under Article 102 TFEU?

Market sharing agreements

Engaging in price-fixing

Forming joint ventures

Refusal to supply (correct)

What is the primary focus of the OECD Guidelines on competition?

Enforcing product safety standards

Encouraging monopolistic practices

Harmonizing competition laws internationally (correct)

Imposing tariffs on imports

Which legislation prohibits anti-competitive mergers in the United States?

Clayton Act Signup and view all the answers

What does Article XI of the General Agreement on Tariffs and Trade (GATT) prohibit?

Quantitative restrictions on trade Signup and view all the answers

What is one goal of the UN Set of Principles on Competition?

To encourage international cooperation against restrictive practices Signup and view all the answers

Which law regulates monopolization attempts in the US?

Sherman Act Section 2 Signup and view all the answers

What type of conduct is specifically prohibited under Article 101 TFEU?

Price-fixing agreements Signup and view all the answers

What is the primary purpose of EU Competition Law?

Protect consumers and ensure competition Signup and view all the answers

Which article establishes the Customs Union between Member States?

Article 28 TFEU Signup and view all the answers

What does Article 30 TFEU prohibit?

Customs duties on imports and exports Signup and view all the answers

What is the Cassis de Dijon Principle primarily concerned with?

Mutual recognition of products marketed in different states Signup and view all the answers

Which of the following is an exception to the freedom of movement of goods?

Environmental protection concerns Signup and view all the answers

Which article extends the prohibition of restrictions to exports?

Article 35 TFEU Signup and view all the answers

Which of the following goals is NOT part of the freedom of movement of goods?

Creating burdensome tariffs Signup and view all the answers

What is a key objective of the EU's internal market regarding goods?

Maintain a barrier-free trade environment Signup and view all the answers

How does the EU respond to non-tariff barriers?

Through harmonization directives for standards Signup and view all the answers

What is a potential reason for a Member State to impose restrictions on goods?

To ensure public health and safety Signup and view all the answers

What role does the European Court of Justice (ECJ) play in the freedom of movement of goods?

It interprets and enforces trade laws. Signup and view all the answers

What constitutes a misleading practice under Article 2(e)?

Materially distorting the consumer's ability to make informed decisions. Signup and view all the answers

Which article specifically addresses misleading actions that involve false information?

Article 6 Signup and view all the answers

What is an example of a prohibited practice regarding health claims?

Claiming a product can cure a serious health condition without scientific evidence. Signup and view all the answers

Under the hierarchy of legal application, which approach is taken if conduct is not listed in Annex I?

Refer to Articles 6-9 for guidance. Signup and view all the answers

In the context of EU competition law, which of the following is prohibited under Article 101 TFEU?

Creating anti-competitive agreements. Signup and view all the answers

What does Article 102 TFEU address?

Abuse of dominant market position. Signup and view all the answers

What is considered as 'dolus bonus' in advertising?

Exaggeration understood as part of advertising culture. Signup and view all the answers

Which of the following practices would be classified as aggressive under Article 8?

Coercing consumers into making a purchase through threats. Signup and view all the answers

If a company is found violating EU competition law, how much can they potentially be fined?

10% of their global turnover. Signup and view all the answers

What type of practice is specifically NOT allowed under the misleading omissions described in Article 7?

Not disclosing essential information. Signup and view all the answers

Which of the following is a characteristic feature of pyramid or Ponzi schemes?

They require recruiting new members to sustain returns. Signup and view all the answers

What is the last resort for defining unfair practices as per Article 5(3)?

Apply the general definition of unfair practices. Signup and view all the answers

What role does the European Commission play in EU competition law enforcement?

It investigates and fines companies for violations. Signup and view all the answers

Which of the following is a restriction imposed by competition laws on dominant companies?

They cannot exploit their position through excessive pricing. Signup and view all the answers

What is assessed during merger control reviews?

The potential harm to competition. Signup and view all the answers

Which of the following practices are EU Member States prohibited from imposing on companies?

National laws that provide less consumer protection than the UCPD. Signup and view all the answers

Which of the following categories fall under unfair commercial practices as per UCPD?

Misleading advertising and aggressive practices. Signup and view all the answers

Under which framework does misleading advertising fall?

Unfair Commercial Practices Directive (UCPD). Signup and view all the answers

How do national laws interact with the UCPD according to its provisions?

They can supplement UCPD but cannot provide lesser protection. Signup and view all the answers

What does Article 2(a) of the UCPD define as a consumer?

A natural person acting outside their professional capacity. Signup and view all the answers

Which of the following advertising claims is considered misleading under the UCPD?

Claiming a product has limited availability when it does. Signup and view all the answers

What is the maximum protection standard established by the UCPD?

Member States cannot impose stricter regulations than those set by the UCPD. Signup and view all the answers

What can happen when a business is found to have engaged in unfair practices?

Administrative sanctions and possible fines from the Member State. Signup and view all the answers

What is a key concern addressed by the UCPD regarding consumers?

Vulnerability of consumers in business relationships. Signup and view all the answers

How does the UCPD treat national contract law concerning unfair practices?

National law governs the ability to rescind contracts. Signup and view all the answers

Which of the following is NOT considered a violation of the UCPD?

Offering slightly varying product specifications. Signup and view all the answers

Study Notes

Regulation of International Free Competition

EU has a comprehensive legal framework for competition regulation
- Article 101 TFEU prohibits agreements that restrict competition (e.g., cartels, price-fixing)
- Article 102 TFEU prohibits abuse of dominant market positions (e.g., predatory pricing)
- EU merger regulation prevents anti-competitive mergers
WTO promotes fair competition through agreements
- GATT Article XI prohibits quantitative restrictions (e.g., quotas) on imports/exports
- GATT Article XXIV allows regional trade agreements but prevents barriers for other nations
- TRIPS balances IP protection and competition, avoiding IP misuse to restrict trade
US has strict anti-trust laws
- Sherman Act Section 1 prohibits contracts that restrain trade
- Sherman Act Section 2 bans monopolization
- Clayton Act prohibits anti-competitive mergers
- FTC Act enforces competition laws and unfair business practices
UNCTAD focuses on fair competition in developing nations
- UN Set of Principles encourages international cooperation
OECD provides recommendations for harmonizing competition laws globally

Key Concepts in Competition Regulation

Anti-competitive agreements (e.g., cartels): Agreements to fix prices, limit production, or share markets are prohibited (EU: Article 101 TFEU; US: Sherman Act Section 1)
Abuse of dominance: Dominant companies cannot unfairly exploit their position (e.g., excessive pricing, exclusionary practices; EU: Article 102 TFEU; US: Sherman Act Section 2)
Merger control: Mergers are scrutinized to ensure competition is not harmed(EU Merger Regulation; US Clayton Act)
State aid and subsidies: Governments cannot provide unfair financial aid (EU: Articles 107-109 TFEU)
International trade rules prevent unfair trade practices (e.g., dumping, import restrictions; WTO Anti-Dumping Agreement, GATT)

International and EU Unfair Commercial Practices

Unfair Commercial Practices Directive (UCPD) governs B2C practices
Prohibits misleading or aggressive practices, aiming to protect consumers
- Misleading advertising includes false or deceptive info and misleading omissions (not disclosing key info)
UCPD aims for a maximum level of consumer protection across EU
- Member States can’t have less consumer protections than the UCPD
- Applies in all EU Member States without needing national laws to apply it (except for additional consumer protections)

EU Competition Law

EU competition law aims to ensure fair and competitive markets within the EU.
Articles 101-109 TFEU are key sources.
Anti-competitive agreements (Article 101 TFEU): Prohibits agreements restricting competition (e.g., cartels). Allows some agreements with notable improvement to efficiency
Abuse of Dominant Position (Article 102 TFEU): Prevents dominant businesses from acting against competition.
Merger Control (Regulation 139/2004): Regulates mergers to prevent reduced competition.
Enforcement: European Commission and national competition authorities handle enforcement, can issue fines, and companies can appeal.
Objectives: Protect consumers, promote fair competition, encourage innovation

Freedom of Movement of Goods under EU Law

Core EU principle, enshrined in Articles 28-37 TFEU.
Creates a common market.
Article 28 (Customs Union): Eliminates customs duties and quantitative restrictions between Member States.
Article 30 (Prohibition of Customs Duties): Prohibits customs duties on goods traded between Member States.
Articles 34-36 (Non-Tariff Barriers): Prohibits restrictions that limit imports/exports (e.g., quotas), but allows exceptions for policy, security, and health concerns.
Cassis de Dijon Principle: If a product is legal in one Member State, it generally should be in others.
Harmonization of standards facilitates trade within the internal market.
Restrictions are allowed under the proportionality principle
Objectives: Facilitate trade, reduce costs, promote economic integration ensuring a level playing field; ECJ interpretations frequently shape application.

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Description

This quiz covers the legal frameworks for competition regulation within the EU, US, and under international agreements. Key laws such as the TFEU, Sherman Act, and WTO agreements are explored to understand their impact on market competition and anti-trust measures. Test your knowledge on how these regulations promote fair competition globally.