Sammendrag Competition Law PDF

Table of Contents {#table-of-contents.TOCHeading} ================= [Lesson 1 2](#lesson-1) [1. Competition Law in the European Union: Legal framework and enforcement 2](#competition-law-in-the-european-union-legal-framework-and-enforcement) [2. Competition Law in Spain: Legal framework and enforcement 5](#competition-law-in-spain-legal-framework-and-enforcement) [3. Regulation of IP rights at international, EU and national (Spanish) level 7](#regulation-of-ip-rights-at-international-eu-and-national-spanish-level) [Lesson 2 8](#lesson-2) [4. Unfair Competition in the EU: General clause prohibiting unfair practices 8](#unfair-competition-in-the-eu-general-clause-prohibiting-unfair-practices) [5. Unfair Competition in the EU: Misleading actions 9](#unfair-competition-in-the-eu-misleading-actions) [6. Unfair Competition in the EU: Misleading omissions 10](#unfair-competition-in-the-eu-misleading-omissions) [7. Unfair Competition in the EU: Aggressive practices 11](#unfair-competition-in-the-eu-aggressive-practices) [8. Regulation of Advertising in the EU 12](#regulation-of-advertising-in-the-eu) [9. Unfair Competition in Spain: General clause prohibiting unfair practices 14](#unfair-competition-in-spain-general-clause-prohibiting-unfair-practices) [10. Unfair Competition in Spain: Specific infringements 15](#unfair-competition-in-spain-specific-infringements) [11. Regulation of Advertising in Spain 17](#regulation-of-advertising-in-spain) [12. Actions against Unfair conducts and Illegal advertising in Spain 18](#actions-against-unfair-conducts-and-illegal-advertising-in-spain) [13. Unfair conducts considered antitrust violations (Spain) 20](#unfair-conducts-considered-antitrust-violations-spain) [Lesson 3 21](#lesson-3) [14. Definition of "Relevant market" and Concept of "Undertaking" in Antitrust Law 21](#definition-of-relevant-market-and-concept-of-undertaking-in-antitrust-law) [15. EU and Spanish Merger control 22](#eu-and-spanish-merger-control) [16. Regulation of State Aids in the EU and in Spain 24](#regulation-of-state-aids-in-the-eu-and-in-spain) [Lesson 4 26](#lesson-4) [17. General prohibition collusive practices: types of agreements prohibited 26](#general-prohibition-collusive-practices-types-of-agreements-prohibited) [18. General prohibition collusive practices: concept of "restriction of 27](#general-prohibition-collusive-practices-concept-of-restriction-of) [competition" 27](#competition) [19. More frequent collusive conducts 28](#more-frequent-collusive-conducts) [20. Exemption criteria 28](#exemption-criteria) [21. Exemption procedure: Auto-evaluation system and Block Exemption Regulations 29](#exemption-procedure-auto-evaluation-system-and-block-exemption-regulations) [Lesson 5 31](#lesson-5) [22. Dominant position: concept and assessment criteria 31](#dominant-position-concept-and-assessment-criteria) [23. Concept of "abuse" 32](#concept-of-abuse) [24. More frequent abusive conducts 33](#more-frequent-abusive-conducts) [25. Sanctions for the infringement of the prohibitions of collusion and abuse of Dominance 33](#sanctions-for-the-infringement-of-the-prohibitions-of-collusion-and-abuse-of-dominance) [Lesson 6 34](#lesson-6) [26. Concept and classes of distinctive signs; concept of trademark 34](#concept-and-classes-of-distinctive-signs-concept-of-trademark) [27. Signs that can be used as a trademark 35](#signs-that-can-be-used-as-a-trademark) [28. Absolute grounds for refusal of registration of a trademark 37](#absolute-grounds-for-refusal-of-registration-of-a-trademark) [29. Relative grounds for refusal of registration of a trademark 38](#relative-grounds-for-refusal-of-registration-of-a-trademark) [30. Content and limits of the rights conferred by a trademark 39](#content-and-limits-of-the-rights-conferred-by-a-trademark) [31. Legal actions available for the owner of a trademark 40](#legal-actions-available-for-the-owner-of-a-trademark) [32. Transfer and licensing of a trademark 42](#transfer-and-licensing-of-a-trademark) [33. Surrender, revocation and invalidity of a trademark 43](#surrender-revocation-and-invalidity-of-a-trademark) [Lesson 7 45](#lesson-7) [34. Patentability requirements 45](#patentability-requirements) [35. Non-patentable inventions and non-inventions 47](#non-patentable-inventions-and-non-inventions) [36. Right to a patent and Employees' inventions 48](#right-to-a-patent-and-employees-inventions) [37. Content and limits of the of the rights conferred by a patent 49](#content-and-limits-of-the-of-the-rights-conferred-by-a-patent) [38. Legal actions available for the owner of a patent 50](#legal-actions-available-for-the-owner-of-a-patent) [39. Transfer and licencing of patents 50](#transfer-and-licencing-of-patents) [40. Nullity, revocation and expiration of a patent 50](#nullity-revocation-and-expiration-of-a-patent) [41. Concept and regulation of utility models 50](#concept-and-regulation-of-utility-models) [Lessons 8 50](#lessons-8) [42. Requirements to protect a creation as a design 50](#requirements-to-protect-a-creation-as-a-design) [43. Content and limits of the design right 50](#content-and-limits-of-the-design-right) [44. Protection of unregistered designs 50](#protection-of-unregistered-designs) [45. Legal actions available for the owner of a design 50](#legal-actions-available-for-the-owner-of-a-design) Lesson 1 ======== Competition Law in the European Union: Legal framework and enforcement ---------------------------------------------------------------------- **Competition Law in the European Union: Legal framework and enforcement** - **Legal framework:** The legal foundation for Competition Law in the European Union is largely based on the **Treaty on the Functioning of the European Union (TFEU)**, specifically Articles 101 and 102. ^?^\|14\] These articles cover antitrust aspects like collusion, abuse of dominant positions, and horizontal agreements, aimed at ensuring a level playing field for all companies operating within the EU. ^?^\|12\] - **Additional legislation:** - **Regulation 139/2004:** Handles merger control. ^9^ - **Articles 107-109 TFEU:** Cover state aids, where governments provide financial assistance to companies. ^9^ - **Directive 2005/29/EC:** Addresses unfair business-to-consumer practices. ^14^ - **Directive 2006/114/EC:** Focuses on misleading and comparative advertising. ^14^ - **Directive 2019/633:** Covers unfair trading practices in the agricultural and food supply chain. ^?^\|14\] - **Enforcement:** - **European Commission:** The body responsible for enforcing EU Competition Law. ^15^ They investigate potential violations, issue decisions, and impose penalties. - **National Competition Authorities:** Member states have their own competition bodies. ^?^\|17\] These authorities collaborate with the Commission and apply EU Competition Law as needed. - **National Courts:** EU Competition Law can be applied by national courts as well. ^?^.\|17\] They often work in cooperation with the Commission to ensure a consistent approach. - **Legal Framework:** It's designed to ensure a fair and competitive market, which benefits both businesses and consumers. The heart of the EU Competition legal framework lies within the **Treaty on the Functioning of the European Union (TFEU)**. Specifically, **Articles 101 and 102** outline rules to prevent practices harmful to competition, such as: - **Collusion:** Companies working together secretly to fix prices or limit output, which can harm consumers through higher prices. - **Abuse of Dominant Position:** When a company with significant market power acts unfairly to stifle competition or hurt rivals. - **Horizontal Agreements:** Deals between companies that are at the same level of the supply chain, like agreements to share markets or fix prices. - **Vertical Agreements:** Agreements between companies at different levels of the supply chain, for example, a manufacturer and its distributor. - **Enforcement:** The EU takes a multi-pronged approach to enforce Competition Law. - **European Commission:** The \"watchdog\" for competition in the EU. They investigate potential violations of the competition rules based on complaints or their own monitoring. They have the authority to: - **Decide on infringements:** Determine if a company has broken competition rules. - **Order interim measures:** Take temporary steps while an investigation is ongoing. - **Make commitments binding:** Have a company make legally-binding promises to correct a violation. - **Rule on the applicability of Articles 101 and 102:** Decide if those articles apply to a case. - **Penalize breaches:** They can impose financial penalties (fines) or periodic penalty payments if necessary. - **National Competition Authorities:** Each EU member state has its own competition authority. They work together with the European Commission to enforce EU competition rules within their own territory. They often act as \"first responders,\" initiating investigations within their own jurisdiction. - **National Courts:** EU Competition Law can also be applied by national courts. In many cases, the European Commission may ask the national court of a specific country to take action or enforce a decision related to competition law violations. - **The European Court of Justice:** This court serves as the final authority for EU law, including competition law. It reviews decisions made by the European Commission or national courts to ensure they are in line with EU law. Essentially, the EU\'s approach to Competition Law seeks to: - **Boost consumer welfare:** Ensure fair prices and choices for consumers. - **Promote economic growth:** Allow companies to compete on a level playing field. - **Foster innovation:** Encourage companies to develop new products and services. Competition Law in Spain: Legal framework and enforcement --------------------------------------------------------- - **Ley 15/2007 de Defensa de la Competencia (LDC)**: This is the primary piece of legislation that regulates antitrust law in Spain. It reflects the principles enshrined in the EU\'s TFEU and covers various aspects of competition, including: - **Collusion:** Prohibits agreements between companies that restrict competition, like fixing prices or limiting output. - **Abuse of a Dominant Position:** Prohibits companies with significant market power from using their dominance to unfairly exclude competitors or harm consumers. - **Merger Control:** Regulates the merger and acquisition process to ensure that mergers do not create or strengthen monopolies that could harm competition. - **State Aids:** Regulates government assistance to companies to prevent unfair advantages and ensure a level playing field. - **Ley 3/1991 de Competencia Desleal:** This law focuses on unfair competition, addressing practices that are considered dishonest or unethical. It covers: - **Misleading Advertising:** Prohibits advertising that is deceptive or misleading to consumers. - **Comparative Advertising:** Sets rules for comparing your product or service to a competitor\'s, ensuring it\'s fair and accurate. - **Imitation:** Prohibits copying another company\'s product or branding in a way that creates consumer confusion or unfair advantage. - **Other Unfair Practices:** Covers a wide range of other behaviors that are considered unfair competition, including unfair pricing, predatory practices, and using confidential information unjustly. - **Comisión Nacional de los Mercados y de la Competencia (CNMC):** This is the main body responsible for enforcing Spain\'s Competition Law. It acts independently and plays several roles: - **Investigation:** The CNMC investigates suspected violations of competition law, such as agreements that restrict competition or unfair business practices. - **Decision Making:** The CNMC can issue decisions to correct violations, which may include ordering companies to cease harmful activities, imposing fines, or requiring them to modify their behavior. - **Merger Control:** The CNMC reviews proposed mergers and acquisitions to ensure they do not harm competition, and they can block or require changes to a merger if necessary. - **Monitoring:** The CNMC continually monitors the market for potential competition law violations and conducts industry studies to identify emerging threats to competition. - **National Courts:** The CNMC\'s decisions can be reviewed by national courts, providing an opportunity for legal challenges. The key courts involved in competition law cases are: - **Audiencia Nacional:** This court reviews administrative decisions by the CNMC, assessing whether the agency correctly interpreted the law or applied the facts of a case. - **Tribunal Supremo:** The highest court in Spain, the Tribunal Supremo is the final level of judicial review for competition law cases. Cases reach this level when there are further legal disagreements or disputes about the application of the law. - **Private Enforcement:** Individuals or companies that have been harmed by violations of competition law can also pursue legal action in Spain. The \"Juzgados de lo Mercantil\" (Commercial Law Courts), specialize in handling private enforcement cases. - **EU Influence:** Spanish Competition Law derives much of its framework from the EU\'s competition rules, but it also has its own distinctive features. - **Emphasis on Fairness:** Spanish Competition Law aims to create a level playing field for all businesses and protect consumers from unfair or harmful business practices. - **Cooperation:** Spain\'s competition authorities work closely with the EU Commission and other national competition authorities to coordinate enforcement actions and ensure consistent application of competition law across the region. Regulation of IP rights at international, EU and national (Spanish) level ------------------------------------------------------------------------- - **International Agreements:** - **Paris Convention for the Protection of Industrial Property (1883):** This is the most important foundational treaty in IP law. ^11^ It establishes the principle of national treatment ^11^ and sets minimum common standards for patents, trademarks, design, and other forms of IP. ^11^ It allows for \"right of priority,\" where a patent application filed in one country can be extended to another country within a specified time. ^11^ - **Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS):** This agreement, part of the WTO, builds on the Paris Convention. ^11^ It establishes minimum standards for IP protection, including national treatment, most-favoured nation treatment, and the legal framework for enforcement. ^11^ - **Specific agreements**: Many agreements are built on the Paris Convention and TRIPS, focusing on specific areas: - **Madrid Agreement:** International trademarks ^12^ - **Nice Agreement:** Classification of goods and services for trademarks ^12^ - **Strasbourg Agreement:** International patent classifications ^13^ - **Hague Agreement:** International industrial designs ^13^ - **Locarno Agreement:** Classifying industrial design categories ^13^ - **Lisbon Agreement:** Protecting and registering appellations of origin ^12^ - **Regional (Supranational) Protection - EU**: - **EU Intellectual Property Office (EUIPO):** Manages trademarks and designs within the EU. ^14^ - **European Patent Office (EPO):** Manages patents within Europe. ^14^ The \"Unitary Patent\" aims to simplify and harmonize patent protection in the EU by providing a single application for a single patent across all participating countries. ^14^ - **Spain**: - **Office of Patents and Trademarks (OEPM):** ^15^ Manages national protection of IP rights in Spain. - **National legislation:** - **Trademarks:** Ley 17/2001 for trademarks, amended by Real Decreto-ley 23/2018 ^15^ - **Patents:** Current legislation is Ley 24/2015 ^15^ - **Industrial designs:** Ley 20/2003 governs their protection ^15^ - **Other IPRs:** Spain has laws specific to layout designs of integrated circuits (Ley 11/1988) ^15^ and plant varieties (Ley 3/2000). ^15^ Lesson 2 ======== 4. Unfair Competition in the EU: General clause prohibiting unfair practices ------------------------------------------------------------------------- The General Clause, found in Article 5.2 of Directive 2005/29/CE, is a broad provision that prohibits any business-to-consumer commercial practices that are considered unfair, even if they don\'t fit into the categories of misleading or aggressive practices. ^5^ This is a \"catch-all\" provision to address practices that may be unethical or exploit consumers, but aren\'t specifically covered by the more detailed rules on misleading and aggressive practices. This general clause is aimed at ensuring that practices not covered by specific categories of conduct, such as misleading actions or aggressive practices, can still be addressed under this broader framework if they are deemed unfair. ^5^ It means that even if a commercial practice is not outright deceptive or aggressive, it can still be illegal if it violates the general principle of fairness in consumer transactions. The General Clause establishes two main criteria for determining whether a commercial practice is unfair: - **Professional Diligence:** The commercial practice violates the requirement of professional diligence. ^5^ In other words, a company\'s actions must be consistent with the standards of care, skill, and honesty expected of a reasonable business in that field. This concept emphasizes that businesses have a responsibility to act ethically and in good faith when dealing with consumers. - **Material Distortion of Average Consumer Behavior:** The commercial practice materially distorts or is likely to materially distort the average consumer\'s economic behavior. ^5^ This means the practice significantly interferes with a consumer\'s ability to make informed choices. If a practice manipulates or deceives consumers into making a decision they wouldn\'t have otherwise made, it is considered unfair. - Both criteria are essential for establishing an unfair practice under the General Clause. It\'s important to note that the Directive provides specific examples and guidelines to help assess whether a practice violates the General Clause, but the overall principle is that business-to-consumer practices should be fair and not exploit or mislead consumers. Unfair Competition in the EU: Misleading actions ------------------------------------------------ - **Misleading Information:** This refers to providing false information that is either untruthful or presented in a way that is likely to deceive the average consumer. ^8^ This covers cases where a business intentionally provides false details about a product or service or presents information in a manner that is deceptive, even if the information itself isn\'t technically inaccurate. - **Marketing That Creates Confusion:** This includes any marketing practices that create confusion about a product or service with the products or services of a competitor. ^8^ This includes situations where there\'s a high likelihood that a consumer will mistake one product for another, particularly due to similar branding, packaging, or marketing messages. Unfair Competition in the EU: Misleading omissions -------------------------------------------------- - Misleading omissions in the EU are a key aspect of the Directive 2005/29/CE, which addresses unfair commercial practices. - They refer to situations where businesses leave out important information that consumers need to make informed decisions. ^4^ ^9^ These omissions can be just as harmful as active deception, as they can lead consumers to make choices based on incomplete or misleading information. **The Directive lays out two main types of misleading omissions:** - **Omission of Material Information:** This occurs when a business fails to provide essential information that consumers need to make an informed decision. ^9^ This information must be considered \"material\" in the context of the product or service, meaning its absence could significantly affect a consumer\'s decision. An example would be selling a used smartphone without disclosing that it has a faulty battery, leading a consumer to buy a product that is less valuable than advertised. - **Information Presented in a Misleading Way:** This covers situations where a business provides information, but it\'s presented in a way that\'s unclear, confusing, ambiguous, or untimely. ^9^ This means that even if the information itself is accurate, its presentation makes it difficult for consumers to understand or interpret. An example could be a contract with confusing wording that makes it hard for consumers to understand their rights and obligations. Or, businesses providing crucial information at the last minute -- just before a purchase -- can undermine consumers\' ability to compare choices. Essentially, misleading omissions involve businesses **concealing critical information from consumers or providing it in a way that makes it difficult to understand**. This practice is considered unfair because it undermines consumers\' ability to make informed choices and prevents them from comparing products or services accurately. This can lead to consumers suffering economic harm by making purchases they might have avoided if they had been aware of the entire picture. The Directive aims to ensure that consumers are not misled by omissions, empowering them to make informed choices about their purchases. By prohibiting misleading omissions, the Directive encourages businesses to act with honesty and transparency, fostering a fairer marketplace. 7. Unfair Competition in the EU: Aggressive practices -------------------------------------------------- Aggressive practices are another category of unfair commercial practices prohibited under Directive 2005/29/CE. They focus on commercial actions that use pressure, coercion, or intimidation to influence consumers\' decisions. ^4^ ^10^ The aim of these practices is to push customers into buying a product or service they might not have chosen freely. Here is a breakdown of aggressive practices: - **Harassment:** This involves using persistent pressure, intimidation, or urging to convince a consumer to buy a product or service. This could involve repeated calls, unwanted visits, or using tactics that aggressively pressure consumers to make a decision. ^23^ - **Coercion:** This means forcing a consumer to make a decision by using force or threats. This could involve physical force, threats of violence, or using legal means to pressure consumers into making a purchase. ^23^ - **Undue Influence:** This involves exploiting a position of authority or power over a consumer to pressure them into making a purchase. This could involve exploiting vulnerability, a sense of trust, or taking advantage of a situation where a consumer might be easily manipulated. The Directive emphasizes that aggressive practices aim to significantly impair a consumer\'s freedom of choice. ^23^ This means that businesses using these tactics are deliberately trying to undermine a consumer\'s ability to make an independent decision and are pressuring them to act against their own best interests. The purpose is to force a purchase, not a genuine decision. Aggressive practices are considered unfair because they violate the fundamental principle of consumer autonomy and choice. By prohibiting these practices, the Directive ensures that consumers can make independent choices and businesses are prevented from using unfair tactics to increase their profits. 8. Regulation of Advertising in the EU ----------------------------------- The regulation of advertising in the EU is governed by Directive 2006/114/CE, which focuses on misleading and comparative advertising. ^11^ This Directive replaces the earlier Directive 84/450/CE and creates a framework to ensure fair and honest advertising practices across the EU. Here is a breakdown of key aspects: - **Scope:** This Directive differs from Directive 2005/29/CE, which covers broad unfair commercial practices. While it addresses similar issues, Directive 2006/114/CE focuses specifically on advertising. It covers both business-to-business (B2B) and business-to-consumer (B2C) advertising. ^11^ However, the Directive doesn\'t address situations where misleading or comparative advertising may merely harm a competitor but without causing direct detriment to consumers. ^11^ - **Definition of Advertising:** The Directive defines advertising very broadly, encompassing any communication or representation aimed at promoting goods or services. ^11^ This extends beyond traditional forms of advertisement, including marketing practices and other promotional efforts. - **Misleading Advertising:** The Directive prohibits misleading advertising. ^12^ This means any advertising that deceives or is likely to deceive consumers about the product or service, even if the information itself is technically true. An example would be using deceptive imagery or text to create an inflated perception of a product\'s quality or benefits -- something that would lead consumers to make a decision they wouldn\'t have otherwise. - **Comparative Advertising:** Comparative advertising, where a business promotes their product by comparing it to another competitor\'s product, is allowed under certain conditions. ^12^ These conditions aim to prevent unfair comparisons that may be inaccurate or misleading. The Directive sets standards to ensure that comparisons are honest, objective, and based on material and relevant features of the products compared. - **Prohibition and Permit:** The Directive sets different standards for misleading and comparative advertising: ^12^ - Misleading advertising is **prohibited** because it undermines consumer trust and fair competition. ^12^ - Comparative advertising is **permitted** under specific conditions, such as ensuring objective and clear comparisons. ^12^ - **Purpose and Protection:** The Directive aims to protect traders (businesses) against unfair practices by competitors and to ensure a level playing field for businesses to compete on the basis of their products and services. It also aims to protect consumers by preventing misleading advertising that could lead them to make poor decisions. ^13^ The Directive emphasizes the need for member states to enforce compliance with these regulations. ^13^ - **Specific Requirements:** Member states are expected to implement the Directive into their national laws, setting specific requirements for defining and enforcing misleading and comparative advertising. This ensures a consistent approach to advertising regulation across the EU. The Directive 2006/114/CE plays a vital role in creating a fairer and more transparent advertising environment in the EU. It aims to ensure that consumers can trust the information they receive and that businesses compete fairly. This contributes to a more robust marketplace where consumers make better decisions. Unfair Competition in Spain: General clause prohibiting unfair practices ------------------------------------------------------------------------ The General Clause in Spanish unfair competition law, codified in Article 4 of Ley 3/1991 de competencia desleal (LCD), establishes a broad prohibition against any behavior that\'s \"objectively contrary to the requirements of good faith.\" ^15^ This clause serves as a fundamental principle underpinning the entire law and acts as a catch-all for practices that might not fit into specific categories of prohibited conduct. **The key elements of this General Clause are:** - **Objectively Contrary to Good Faith:** This standard means that the behavior must be clearly seen as violating the principles of fairness and honesty expected in commercial interactions. It\'s not about subjective opinions but assessing whether a reasonable person would consider the action to be unfair based on established norms of business ethics. - **Two Standards of Unfairness:** The General Clause codifies two key standards of unfairness in commercial relationships: - **Traditional Concept of Unfairness:** This refers to actions that are \"objectively contrary to the requirements of good faith,\" a long-standing principle in Spanish law. ^16^ It focuses on assessing whether a practice breaches established norms of fairness in business dealings. - **New Standard Incorporating EU Directive:** The 2009 reforms integrated a new standard, based on the EU Directive 2005/29/CE, which looks at whether there\'s been a \"breach of professional diligence\" and a \"significant distortion of economic behavior.\" ^16^ This standard aims to ensure that businesses act responsibly and don\'t exploit consumers through unfair practices. The General Clause in LCD is crucial for ensuring a fair and ethical marketplace in Spain. It acts as a foundation for preventing and sanctioning behaviors that are detrimental to fair competition and consumer protection. By setting a clear standard of good faith, it empowers businesses to operate ethically and helps consumers make informed decisions. 10. Unfair Competition in Spain: Specific infringements --------------------------------------------------- Ley 3/1991 de competencia desleal (LCD) in Spain lays out specific infringements of unfair competition in Articles 5-18, divided into two main categories: those related to business-to-business (B2B) transactions and those directed at consumers (B2C). ^14^ ^14^ Here\'s a breakdown of the specific infringements: **B2B Infringements:** - **Misleading Practices (Articles 5 & 7):** - These cover situations where a business deceives or is likely to deceive competitors about the product, service, business, or its activities. This could involve false information, misleading claims, or creating confusion about the origin or nature of the product. - **Confusion (Article 6):** This article addresses acts that create confusion among competitors or customers regarding the origin or identity of a product or service. It specifically focuses on deceptive actions that mislead consumers into thinking a product or service is associated with another competitor. - **Aggressive Practices (Article 8):** Actions that threaten to harm a competitor\'s reputation, impede their activities, or cause the competitor\'s business hardship can fall into this category. - **Exploitation of Reputation and Trade Secrets:** - **Exploitation of Reputation (Article 12):** This refers to practices that gain an unfair advantage by using a competitor\'s reputation or goodwill for one\'s own benefit. This might involve using another company\'s brand name or image without permission or falsely associating itself with a competitor. - **Breach of Secrets (Article 13):** This article addresses the use or disclosure of confidential business information, such as trade secrets or know-how, without proper authorization. - **Inducement to Breach of Contract:** - **Article 14:** This article prohibits behaviors that intentionally induce a competitor to breach a contract, typically through unethical means like bribing or manipulating. - **Breach of Legal Rules:** - **Article 15:** This article focuses on actions that leverage a breach of legal rules to gain an unfair competitive advantage. For example, gaining an advantage by using illegal labor practices or dodging taxes. - **Discrimination and Dependence:** - **Article 16:** This penalizes discriminatory practices, such as setting different prices or terms for different customers without a legitimate reason, or exploiting economic dependence to gain an unfair advantage. - **Sales at a Loss:** - **Article 17:** This article prohibits setting prices below cost primarily for the purpose of harming competitors or misleading customers, especially if it aims to eliminate competitors. - **Illegal Advertising:** - **Article 18:** This article prohibits advertising that violates the General Advertising Act (Ley 34/1988), which defines illegal advertising practices. **B2C Infringements (Articles 19-31):** - This category addresses actions that are directed toward harming consumers, generally similar to those in the B2B category but with a focus on consumer protection. - **Misleading Practices (Articles 20-27):** - This includes practices such as false or deceptive advertising, omissions of important information, or presenting information in a confusing or deceptive manner to mislead consumers. - **Aggressive Practices (Articles 28-31):** - These cover situations where a business uses excessive pressure, coercion, harassment, or intimidation to persuade consumers to buy a product. The specific infringements listed in the LCD are designed to address various aspects of unfair competition in the Spanish market and aim to create a balanced and ethical business environment that safeguards consumers and promotes honest competition. These detailed articles provide a solid foundation for identifying and punishing unfair practices, contributing to a more equitable business landscape in Spain. 11. Regulation of Advertising in Spain ---------------------------------- The regulation of advertising in Spain is primarily governed by Ley 34/1988 General de Publicidad (LGP), which sets the framework for advertising practices and defines what constitutes \"illegal advertising\" or \"publicidad ilícita.\" ^35^ This law is complemented by Ley 3/1991 de competencia desleal (LCD), which covers broader aspects of unfair commercial practices, including misleading and aggressive advertising. ^36^ **Here\'s a breakdown of the key areas:** - **Illegal Advertising Defined:** The core concept of the LGP focuses on defining and prohibiting \"illegal advertising\" (publicidad ilícita). ^35^ This includes practices that violate ethical standards and harm consumer rights. Article 3 of the LGP identifies various forms of illegal advertising, which are further developed in subsequent articles. ^35^ - **Types of Illegal Advertising:** Article 3 of the LGP outlines various specific manifestations of illegal advertising, including: - **Advertising Against Human Dignity and Constitutional Rights:** Advertising that undermines human dignity, exploits, or discriminates based on factors like gender, race, sexual orientation, or disability is prohibited. ^36^ - **Advertising Directed to Children:** Specific restrictions are placed on advertising aimed at children to prevent exploitation of their vulnerability. ^36^ - **Subliminal Advertising:** Advertising that is \"not consciously perceived,\" or designed to influence consumers without their awareness, is banned. ^36^ - **Advertising Infringing Regulations:** Advertising for products like medicine, alcohol, or tobacco, which are subject to specific regulations, must comply with those rules. ^36^ - **Misleading, Unfair, and Aggressive Advertising:** This category covers advertising that is deceptive, exploitative, or uses pressure or intimidation to influence consumer choices. ^36^ These practices are further defined and addressed in Ley 3/1991 on unfair competition. - **Harmonization with EU Directives:** Spanish advertising regulations are intentionally designed to harmonize with European Union directives on unfair commercial practices (Directive 2005/29/CE) and advertising (Directive 2006/114/CE). ^33^ This ensures that the Spanish legal framework is aligned with broader European standards for consumer protection and fair competition. - **Enforcement and Actions:** The Ley 34/1988 (LGP) lays out enforcement procedures and actions that can be taken against violations. These actions are generally similar to those outlined in Ley 3/1991 on unfair competition, including civil actions such as injunctions, cease-and-desist orders, and compensation for damages. ^36^ In summary, the regulation of advertising in Spain aims to create a fair, transparent, and ethical advertising landscape. It prioritizes consumer protection, preventing misleading or aggressive practices, and ensuring that the market operates according to principles of honesty and respect for consumers. The regulations integrate the EU Directives, ensuring consistency and alignment with broader European standards. 12. Actions against Unfair conducts and Illegal advertising in Spain ---------------------------------------------------------------- Okay, let\'s break down what happens when a Spanish business engages in unfair competitive practices or illegal advertising: **1. Defining the Infringement:** - **Unfair Commercial Practices:** If a business violates Ley 3/1991 de competencia desleal (LCD), which covers unfair competitive practices, the action is categorized as an \"acto de competencia desleal\" (unfair competition act). ^37^ - **Illegal Advertising:** If the issue is with an advertisement, it falls under Ley 34/1988 General de Publicidad (LGP), which defines and prohibits \"publicidad ilícita\" (illegal advertising). ^35^ **2. Who Investigates and Enforces:** - **\"Unfair Competition\" Cases:** The Comisión Nacional de la Competencia (CNC) (National Competition Commission) or the competent regional organs (Spanish autonomous communities) handle investigations. ^37^ They are tasked with making sure unfair acts don\'t distort fair competition in the market. - **\"Illegal Advertising\" Cases:** These would be handled by regional advertising boards, or the relevant authorities that regulate advertising depending on the type of advertising involved. **3. Specific Conditions for Action:** - **Infringement:** A proven violation of the relevant law must be identified. This can include misleading or aggressive practices as outlined in the law. - **Public Interest:** There must be an impact on the public interest, meaning the unfair conduct hinders or distorts fair competition in the market. ^37^ **4. Authority Actions:** - **Investigation:** The authorities conduct a comprehensive investigation to verify if an infringement indeed occurred. - **Enforcement:** If the investigation confirms a violation, the enforcement authority can take several actions: - **Cessation Order:** The offender may be ordered to cease the illegal practice. - **Fines:** The offender can be fined for violating the law. - **Other Remedies:** Depending on the case, other remedies such as compensation to affected parties might be ordered. **5. Parallel Civil Action** - **Civil Courts:** While administrative actions are ongoing, individuals or companies harmed by unfair competition can file a lawsuit in commercial courts. - **Unfair Competition:** These lawsuits can seek remedies, such as damages and an injunction, to stop harmful practices. - **\"Antitrust\" Considerations:** If the unfair competition act significantly impacts the market to the extent that \'antitrust\' concerns arise, authorities can take further action under Ley 15/2007 de Defensa de la Competencia (LDC), focusing on market competition. - Spanish law provides a clear framework to deal with unfair competitive practices and illegal advertising. - The enforcement process involves a mix of administrative actions overseen by the National Competition Commission or relevant authorities and potential civil actions by those harmed by the practices. - The goal of this enforcement system is to ensure fair competition in the marketplace, protect consumer rights, and maintain a healthy and ethical business environment in Spain. Unfair conducts considered antitrust violations (Spain) ------------------------------------------------------- In Spain, certain unfair commercial practices that violate the Ley 3/1991 de competencia desleal (LCD) can be considered antitrust violations under Ley 15/2007 de Defensa de la Competencia (LDC), which governs competition law. While the LCD centers on unfair competition within a specific industry, the LDC aims to maintain free and fair competition across the marketplace. **Here\'s how these laws intertwine:** - **LCD Violations:** Unfair acts detailed in the LCD, such as misleading advertising, aggressive sales practices, or the improper exploitation of competitors\' reputation, can potentially harm the overall market competition. These practices have the potential to distort free and fair competition, which is the primary concern of the LDC. - **Antitrust Nexus:** Article 3 of the LDC states that unfair competition acts, if they impact overall market competition, are subject to antitrust scrutiny. It specifies: ^37^ When \"unfair competition acts\" distort competition and significantly harm the \"public interest,\" then the National Competition Commission or regional bodies can investigate and enforce sanctions. - **Two Conditions:** For an LCD violation to be considered an antitrust offense, it must meet two criteria: - **LCD Infringement:** The act must be one of those defined as unfair under the LCD. - **Public Interest Impact:** The act must impair market competition \"by false competition\" to a degree that constitutes a harm to the public interest. The evaluation takes into account the potential for distorting free and fair competition and the impact on consumer choices and market dynamics. - **Enforcement:** If the National Competition Commission or the relevant regional bodies find that an LCD violation meets these criteria, they can use LDC to take antitrust enforcement actions. This can involve cease-and-desist orders, fines, or other appropriate sanctions. - **Parallel Action:** The LDC explicitly states that such actions do not prevent \"civil courts\" from considering a violation as an \"unfair competition infringement.\" ^37^ This means that, in addition to the potential administrative action, a party directly harmed by the unfair conduct can also pursue legal recourse in civil courts against the offender. **Example:** If a company manipulates its pricing to drive out a competitor, thereby dominating the market, the act could be considered both an unfair competition act under the LCD and an antitrust violation under the LDC. The National Competition Commission could investigate and enforce sanctions, and the affected competitor could also pursue civil action. **Key Takeaways:** - The interaction between Spanish laws on unfair competition and antitrust is designed to address the broader implications of unfair acts and their potential to distort free and fair market competition. - Distorting competition for the benefit of one company can be prohibited both under unfair competition and antitrust laws. - The enforcement mechanism emphasizes collaboration between administrative authorities and civil courts to protect both the public interest and individual businesses from unfair conduct. Lesson 3 ======== Definition of "Relevant market" and Concept of "Undertaking" in Antitrust Law ----------------------------------------------------------------------------- The \"relevant market\" and \"undertaking\" are crucial concepts in Antitrust Law. They help define the scope and boundaries of competition. ^5^ **Relevant Market:** - The \"relevant market\" refers to a specific area where competition occurs for a particular good or service. ^6^ - It considers both the product market and the geographic market. - **Product market:** The relevant product market includes all products that customers consider interchangeable or substitutable to the product(s) of the undertaking. ^6^ - **Geographic market:** The relevant geographic market encompasses the area where the undertakings involved supply or demand relevant products and where competition conditions are sufficiently homogeneous. ^6^ **Undertaking:** - The term \"undertaking\" refers to any entity that engages in economic activity, regardless of its legal status or financing. ^3^ - This broad definition covers a variety of economic agents including: - Companies (including state-owned companies) - Groups of companies - Associations (associations of undertakings, cultural associations, sports association\...) - The concept is autonomous, meaning it applies to all areas of competition law, including collusion, dominant positions, mergers, and state aids. ^3^ **In summary**: **Relevant market** defines the competitive landscape for a specific product or service, taking into account both the substitutability of products and the geographic scope of competition. **Undertaking** is a broad concept that encompasses all economic actors, regardless of their legal form or financing, making antitrust law relevant to a wide range of entities. EU and Spanish Merger control ----------------------------- EU and Spanish Merger control are legal frameworks designed to prevent anti-competitive practices arising from mergers and acquisitions. **EU Merger Control** - Regulated by **Regulation 139/2004** - Applies when the combined global turnover of all firms involved in the merger exceeds €5 billion and when at least two of those firms have a European Union turnover exceeding €250 million. - The process involves: - **Notification**: Parties involved in the merger must notify the European Commission to initiate the review process. - **Phase 1**: The Commission performs an initial screening to decide if the merger poses serious competition concerns; this phase can lead to clearance, further investigation, or prohibition. - **Phase 2**: If Phase 1 raises concerns, the Commission conducts a more in-depth investigation to assess the merger\'s impact on competition; this can lead to clearance with conditions, clearance without conditions, or prohibition. - **Decision**: Based on the review process, the Commission decides to declare the merger compatible or incompatible with the common market. If deemed incompatible, the Commission may intervene to prevent the merger or impose conditions to mitigate its potential anti-competitive effects. **Spanish Merger Control** - Governed by **Spanish Law**, specifically the Law on Competition (LDC) - Similar to EU merger control, it focuses on mergers, acquisitions, and joint ventures. - National dimension: A merger has a national dimension if the aggregate turnover of the undertakings in Spain exceeds €240 million, and at least one of the undertakings has a turnover in Spain exceeding €60 million. - Regulated by the **National Competition Commission (CNMC)**, which is the Spanish competition authority. - The CNMC plays a significant role in reviewing mergers and acquisitions, applying a two-phase process: - **Phase 1**: The CNMC decides whether to authorise the merger without conditions, authorize it with conditions, or prohibit it. - **Phase 2**: If additional scrutiny is required, the CNMC may impose conditions or prohibit the merger. - Unlike in EU merger control, **the final decision in Spain rests with the Council of Ministers.** **Key differences between EU and Spanish Merger Control:** A screenshot of a screen Description automatically generated Regulation of State Aids in the EU and in Spain ----------------------------------------------- State aid refers to financial assistance provided by governments to companies or industries, often to support their development or address specific economic challenges. Regulation of State Aids in the EU - **Framework**: The EU\'s approach aims to ensure a level playing field for businesses and prevent unfair competition. - **Core Regulation**: Articles 107-109 of the Treaty on the Functioning of the European Union (TFEU) govern state aid. - **Key Provisions**: - **Article 107.1**: Generally, any state aid that distorts competition and affects trade between EU member states is deemed incompatible with the common market. - **Article 107.2**: Specific types of aid are exempted and considered compatible with the common market. These include aid having social character for individual consumers, aid for natural disaster relief, and aid to specific areas of Germany for economic recovery. - **Article 107.3**: Provides criteria for \"individual exemptions\" based on economic justifications such as fostering regional development or addressing serious economic disturbances. - **Article 108**: Outlines the procedure for individual exemptions of state aid. - **Article 109**: Establishes block exemptions for certain types of state aid, allowing automatic approval without individual scrutiny. Enforcement and Control: - **European Commission**: The European Commission plays a key role in enforcing EU state aid rules. It assesses aid measures, approves or prohibits them, and can recover illegal aid. - **Block Exemption Regulations**: These regulations provide automatic approval for certain types of state aid, which are considered less likely to distort competition. - **De minimis Aid Rule**: A set of rules that exempts small amounts of aid from scrutiny. Regulation of State Aids in Spain - **Legal Basis**: Spanish law, specifically the Law on Competition (LDC), regulates state aid alongside the EU framework. - **CNMC\'s Role**: The National Competition Commission (CNMC) in Spain is tasked with monitoring state aid and ensuring it complies with EU regulations. - **Limited Powers**: The CNMC has limited powers to independently approve or reject state aid. It mainly focuses on issuing reports, making recommendations, and coordinating with Spanish authorities to align with EU regulations. - **National Considerations**: Spain applies EU rules but may have national specificities where EU guidance does not explicitly cover certain situations. Key Differences between EU and Spanish State Aid Regulation: ![A screenshot of a computer Description automatically generated](media/image2.png) **In summary:** - EU\'s legal framework aims to ensure fair competition by regulating state aid and limiting its potential for distorting the market. - Spain aligns with EU regulations but has a national agency focused on reporting and oversight. - The EU Commission has a significant role in enforcing state aid rules and ensuring compliance across EU members. Lesson 4 ======== 17. General prohibition collusive practices: types of agreements prohibited ----------------------------------------------------------------------- The general prohibition against collusive practices is a fundamental aspect of antitrust law. It aims to protect competition within a given market. There are three types of agreements prohibited under this general prohibition: - **Agreements:** These are explicit agreements between undertakings where the terms are clear and often documented. They can be *horizontal agreements* between competitors operating at the same level of the economic chain, such as price-fixing arrangements. They can also be *vertical agreements* between companies operating at different levels of the chain, for example, a manufacturer imposing a minimum resale price on its distributors. ^8^ - **Decisions by associations of undertakings:** These are decisions made by trade associations or other collectives of businesses that, in effect, bind their members to certain actions, which may distort competition. An example could be an association issuing instructions to its members restricting their output levels, ultimately leading to reduced competition in the market. ^9^ - **Concerted practices:** These are more subtle forms of collusion, where companies coordinate their activities without express agreement. They involve a \"coordinated course of actions\" aimed at eliminating uncertainty within a market. An example could be a group of companies deliberately behaving in a similar way to avoid price wars, effectively leading to a tacit agreement to restrain competition. ^8^ These types of agreements are prohibited because they can have a negative impact on competition, leading to higher prices for consumers, reduced product choice, and stifle innovation. ^6^ However, it\'s important to note that exemptions to these prohibitions can exist. Some collusive agreements, such as those for research and development or those that contribute to improving the production or distribution of goods, are often allowed under specific conditions. ^5^ General prohibition collusive practices: concept of "restriction of ------------------------------------------------------------------- competition" ------------ The concept of \"restriction of competition\" lies at the heart of antitrust law, specifically the general prohibition against collusive practices. It refers to actions or agreements that hinder or limit competition within a market. Think of it as creating an uneven playing field where some companies are unfairly advantaged over others. The key idea is that these restrictions can negatively impact the natural flow of competition, leading to: - **Higher prices:** When companies collude, they can set prices higher than they would in a competitive market, because consumers have fewer choices. ^6^ - **Reduced product choice:** Restricted competition can lead to less variety and innovation, as the market is controlled by a smaller number of players. ^6^ - **Slower innovation:** Lack of competition can stifle innovation, as companies have less incentive to improve their products or offer new ones. The goal of antitrust laws is to prevent these negative effects. That\'s why the general prohibition is so important - it\'s designed to ensure that all companies have a fair chance to compete in the market. ^6^ **The law focuses on two main areas:** 1. **Restrictive Objective:** Here, the focus is on the intent of the agreement or practice. Does it aim to prevent, restrict, or distort competition (e.g., a price-fixing agreement)? ^12^ 2. **Restrictive Effect:** This involves considering the actual impact of the agreement or practice. Does it lessen competition in the market (e.g., a market-sharing agreement that effectively eliminates competition)? ^12^ Remember that even if an agreement has a positive impact on economic progress, it still might be prohibited if it creates an unacceptable level of restriction on competition. Think of it like a scale where the benefits must outweigh the negative impacts on competition. More frequent collusive conducts -------------------------------- The term \"more frequent collusive conducts\" refers to the specific types of agreements and practices that are commonly found to be violations of competition laws. These actions are often considered to be particularly harmful to fair competition because they can directly affect pricing, output, and market access. **The study notes list several examples, classified into different categories:** - **Price fixing:** This involves companies agreeing to set prices for goods or services at a specific level. They might agree to a minimum price, a maximum price, or a specific price point. This directly eliminates price competition and can lead to higher prices for consumers. ^15^ - **Limiting outputs:** Companies might agree to limit production or restrict the distribution of their goods or services. This can be achieved by setting quotas, restricting the expansion of production facilities, or even destroying excess products. This artificially creates scarcity, leading to higher prices and limited options for consumers. ^15^ - **Sharing markets:** Competitors might agree to divide up the market according to geographical areas, customer segments, or product types. This prevents each company from competing for the entire market, reducing choice and innovation. ^15^ - **Imposing unfair terms on transactions:** Companies might agree to apply dissimilar conditions (e.g., different pricing or delivery terms) to equivalent transactions with different customers. This creates an uneven playing field, giving some companies a significant advantage over others. ^15^ It\'s important to note that these practices are broadly prohibited by both Article 101 TFEU (EU law) and Article 1 LDC (Spanish law), reflecting a strong international consensus to protect fair competition. ^15^ Exemption criteria ------------------ Exemption criteria are the specific conditions that allow certain agreements, which would normally be prohibited under antitrust laws, to be exempt from those prohibitions. These criteria ensure that even when businesses collaborate, they do not harm competition and consumers. **The study notes highlight four key criteria that must be met for an exemption:** - **Economic Progress:** The agreement must facilitate economic progress or promote technical advancement. This could involve improving production methods, developing new technologies, or promoting the supply of goods and services more efficiently. ^18^ - **Consumer Benefits:** The agreement must provide consumers with a fair share of the benefits from the collaboration. This ensures the benefits of an agreement are not solely captured by the companies involved, but that consumers also gain something positive. ^18^ - **Essential Restrictions:** The agreement cannot impose restrictions on the participating businesses that are not essential to achieve the desired economic progress or consumer benefits. This means that any restrictions must be directly related to the goals of the collaboration. ^18^ - **No Significant Elimination of Competition:** The agreement should not significantly eliminate competition in a substantial part of the market. This ensures that the collaboration does not create a monopoly or stifle innovation by closing off market opportunities to other companies. ^18^ These criteria are cumulative, meaning that all four conditions must be met for an agreement to be exempt from the general prohibition against collusion. It is important to note that obtaining exemption is a complex process that usually involves a lengthy review by competition authorities, such as the European Commission for EU law or the competition authority of a given country. An agreement will not automatically apply for exemption simply because it meets these criteria, but must be reviewed and approved by the relevant regulatory body. ^18^ Exemption procedure: Auto-evaluation system and Block Exemption Regulations --------------------------------------------------------------------------- The exemption procedure in antitrust law allows certain agreements, which would typically be prohibited by competition law, to be exempt from those prohibitions. This procedure is designed to balance the protection of fair competition with the promotion of economic progress and consumer benefits. **There are two main components within this process:** **1. Auto-Evaluation System:** - **Purpose:** This system enables companies to self-assess whether their agreements fall under the exemption criteria. - **Procedure:** - Companies must analyze their agreements using the specified conditions outlined in the relevant regulations. - They must demonstrate that their agreements meet all four cumulative criteria for exemption by providing supporting evidence. This involves demonstrating that the collaboration promotes economic or technical progress, offers consumers fair benefits, imposes only essential restrictions, and doesn\'t significantly eliminate competition. - **Benefit:** The system simplifies the exemption process, enabling companies to quickly determine if their agreements qualify for exemption and avoid lengthy regulatory procedures. - **Examples:** - The study notes cite EU Council Regulation 1/2003 and Commission Regulation 773/2004 as examples of guidelines for this self-assessment. **2. Block Exemption Regulations (BERs):** - **Purpose:** These regulations provide pre-defined exemptions for specific types of agreements within specific sectors. This offers a more streamlined approach for companies operating in particular sectors. - **Procedure:** - Companies operating in these specific sectors need to check if their agreements fall under the categories covered by the relevant BER. - If the agreement meets the specific requirements laid out in these regulations, it is considered exempt from the general prohibition. - **Benefit:** The BERs simplify the exemption process, providing companies with greater certainty and avoiding the need for a case-by-case review by competition authorities. - **Examples:** - The study notes mention different BERs, including: - VBERs - for Vertical agreements in general.^21^ - HBERs - for Horizontal agreements^22^ - TTBER - for Technology transfer agreements. ^23^ **Key takeaways:** - Both the auto-evaluation system and BER seek to promote efficiency and certainty within antitrust law. - Both approaches work by creating standardized frameworks for determining when certain types of agreements are exempt from the general prohibitions against collusion. - Companies must carefully check whether their agreements qualify for exemption under the appropriate regulation, ensuring they meet all the specified requirements to benefit from these streamlined exemption processes. Lesson 5 ======== Dominant position: concept and assessment criteria -------------------------------------------------- The concept of a dominant position in antitrust law refers to a situation where an undertaking, a company or group of companies, has significant economic power in a particular market. ^4^ This power allows the undertaking to act independently of competitors, customers, and even consumers, potentially leading to harmful market outcomes like consumer exploitation or hindering the development of new competition. ^4^ Assessing dominance involves analyzing various criteria like: - **Market share:** This is the most basic indicator. A high market share, usually above 40%, indicates dominance. ^5^ Above 50% raises a rebuttable presumption of dominance, ^5^ while over 70% strongly suggests dominance. ^5^ - **Potential competition:** The possibility of new entrants into the market can limit dominance. - **This depends on barriers to entry, such as:** - **Legal barriers:** These could involve needing administrative authorizations or patents. ^6^ - **Financial barriers:** High initial costs to set up operations. ^6^ - **Economies of scale:** A cost advantage for incumbents with higher production volumes. ^6^ - **Economies of scope:** Cost reductions achieved by producing a variety of goods, again giving incumbents an edge. ^6^ - **Opportunity costs:** The potentially good outcome that gets sacrificed when an undertaking chooses a different path. - **Difficulties to access raw materials:** Limited availability of key resources. - **Consumer preferences:** Brand loyalty or existing customer relationships with the existing dominant company. - **Countervailing buyer power:** The ability of customers to switch to competitors or vertically integrate in the supply chain can affect the dominant undertaking\'s power. - **Structure of the undertaking:** Internal factors like vertical integration, financial strength, advanced technology, and strong pre/post-sales service can contribute to dominance. ^8^ These various factors are analyzed together to determine if an undertaking holds a dominant position, and if so, how to address any potential abuses it may engage in. Concept of "abuse" ------------------ The concept of \"abuse\" in antitrust law refers to the harmful behavior of a dominant undertaking in a market that significantly affects the degree of competition or its growth. ^10^ It\'s essentially about hindering or distorting fair competition. **Here are some key aspects of this concept:** - **Objective concept:** The intention of the dominant undertaking is irrelevant. What matters is the actual effect of the conduct on competition. For example, if a dominant firm terminates a contract due to a breach, that\'s considered a legitimate response, not an abuse. - **Objective standard:** The conduct is assessed objectively based on whether it aligns with \"competition on the merits.\" This means competing fairly based on factors like price, quality, innovation, or service to consumers. Abuses typically involve leveraging market power to gain an unfair advantage, often through practices that harm consumers. - **Specific legal tests:** The European Commission has developed specific \"legal tests\" for different types of conducts that are considered abusive, such as exclusive dealing, tying, or predatory pricing. These tests help determine whether a dominant undertaking\'s conduct has indeed restricted competition and, if so, how to rectify it. Overall, the concept of \"abuse\" in antitrust law is about ensuring that dominant firms don\'t use their market power to stifle competition or harm consumers. The focus is on the conduct\'s effect, not the intention, and specific legal tests help to determine if particular behaviours are considered abusive. More frequent abusive conducts ------------------------------ The more frequent abusive conducts outlined in Article 102 of the Treaty on the Functioning of the European Union (TFEU) are specific practices that are commonly used by dominant undertakings to maintain their power and stifle competition. ^14^ These practices are also referenced in Article 2 of the Lisbon Treaty (LDC). **Here are the four main abusive practices commonly used by dominant firms:** - **Imposing unfair prices:** This type of abuse occurs when a dominant undertaking charges excessively high prices for its products or services, disproportionate to the actual cost of production, or imposes unfair buying or selling conditions on its customers. ^14^ This can include situations where a firm uses its dominant position to force customers to purchase at artificially inflated prices or restrict their choices. - **Limiting production or markets:** A dominant undertaking might limit its production or restrict its markets to the detriment of consumers. ^14^ This can involve deliberately underproducing to create shortages or artificially restrict the availability of goods or services in specific regions. - **Applying dissimilar conditions:** This abuse occurs when a dominant undertaking applies unfavorable conditions to customers in similar situations, creating an unfair advantage over smaller competitors. ^14^ For instance, offering favorable conditions to large customers while imposing stricter terms on smaller ones hinders fair competition. - **Imposing supplemental obligations:** A dominant undertaking might impose unnecessary obligations on customers, forcing them to accept additional terms that have no connection to the main subject of the contract. ^14^ This can include bundled sales, where a customer must purchase a specific product alongside the one they want. These types of practices are typically considered exclusionary, as they aim to restrict competitors and harm market competition and consumers. This is why they are considered frequent and are rigorously scrutinized by competition authorities. Sanctions for the infringement of the prohibitions of collusion and abuse of Dominance -------------------------------------------------------------------------------------- Sanctions for infringing the prohibitions on collusion and abuse of dominance are designed to deter anti-competitive practices and ensure a fair and competitive market. The European Commission and national competition authorities have various tools at their disposal to enforce these rules. **Common sanctions for infringements include:** - **Cessation Order:** This requires the dominant undertaking to stop the illegal conduct immediately. ^20^ It could involve ending a particular pricing scheme, stopping an unfair marketing practice, or ceasing any other harmful activity. - **Fines:** The Commission has the authority to impose substantial financial penalties on companies that violate competition laws. ^20^ The fine amount is based on the severity of the infringement, the duration of the violation, and the company\'s turnover. - **Structural Remedies:** In rare cases, the Commission might order structural remedies, such as breaking up a dominant company or divesting specific assets to prevent further abuse of market power. ^20^ This is a drastic measure reserved for situations where other sanctions are not effective. The Commission has also accepted legally-binding commitments from companies to resolve competition concerns. - **Other sanctions:** The Commission can also impose other penalties like prohibiting mergers or requiring publication of the decision. The aim of these sanctions is to deter companies from engaging in anti-competitive practices and to ensure fair competition for the benefit of businesses and consumers across the EU. It is also important to mention that the European Commission and national competition authorities actively monitor markets and investigate suspected infringements. This proactive approach coupled with the deterrence effect of sanctions helps maintain a healthy and competitive business environment. Lesson 6 ======== Concept and classes of distinctive signs; concept of trademark -------------------------------------------------------------- Distinctive signs are symbols, names, or designs used to identify and differentiate goods or services from those of other businesses. They are protected by intellectual property rights. ^2^ - Trademarks: Trademarks are distinctive signs that identify the **business origin** of goods or services. ^1^ They distinguish products or services from different undertakings. ^1^ - Commercial names: Commercial names identify the **undertaking** itself, not the products or services offered. ^1^ They are similar to trademarks in terms of registration and protection. - Geographical indications/Designations of Origin: These signs are granted to producers in a specific region, indicating that the goods possess specific characteristics linked to the geographical area. ^1^ They provide exclusive rights to those who meet specific quality standards and comply with the established control rules. A trademark is a specific type of distinctive sign that **distinguishes the goods or services** of one undertaking from those of others. It can consist of various elements, including words, personal names, designs, letters, numbers, colors, the shape of goods or packaging, or sounds. ^5^ In Spain, the requirements have been modified, and non-graphical trademarks like sounds or videos are now acceptable. In the EU, the owner is protected because the trademark represents the specific goods/services and its proprietor. ^5^ Signs that can be used as a trademark ------------------------------------- A trademark can consist of many signs, including words, personal names, designs, letters, numerals, colors, the shape of goods or packaging, and sounds. ^5^ They can also include non-graphical representations like sounds, videos, or holograms, since the requirement of \"graphical representation\" has been eliminated in Spain. ^5^ The key condition is that the sign can be represented on the Register in a distinct and precise manner. ^5^ Distinctive signs are used by businesses to identify their products or services. Here is a breakdown of the types of distinctive signs and trademarks: - **Distinctive Signs** - **Trademarks** - A trademark is a symbol, name, or design that identifies the goods or services of a specific business. - It distinguishes the products or services from those of other companies. - Examples include: - **Brand Names:** Coca-Cola, Nike, Apple (These names are instantly recognizable and associated with specific products.) - **Logos:** The Nike swoosh, the Apple logo, the McDonald\'s golden arches (These logos are visually distinctive and instantly recognizable.) - **Slogans:** \"Think Different\" (Apple), \"Just Do It\" (Nike), \"Taste the Feeling\" (Coca-Cola) (These slogans are memorable and associated with specific brands.) - Legal Protection: Trademarks are protected by law, so no other business can use or copy them to create confusion. - **Trademarks distinguish goods from different undertakings.** A trademark tells you who made or sold the product. - **Commercial Names** - A commercial name is the name of the business itself. - Examples include: - \"Starbucks Corporation\" (The company name is separate from their trademark, which is the green siren logo.) - \"Amazon.com Inc.\" (The company name is separate from their trademark, which is the orange-and-blue Amazon smile logo.) - Commercial names identify a specific business, but not a specific good or service. - They are subject to the same laws as trademarks, such as grounds for refusal and revocation. - **Geographical Indications/Designations of Origin** - These signs are used to identify products that originate from a particular geographic area known for its specific qualities. - The quality of the product is directly linked to its origin. - Examples include: - \"Prosciutto di Parma\" (Italian cured ham) - \"Champagne\" (French sparkling wine) - \"Roquefort\" (French blue cheese) - **Concept of Trademark** - Trademarks are distinctive signs used to differentiate one company\'s goods or services from another\'s **in the marketplace**. - They help consumers identify products, build brand recognition and loyalty, and protect the value of a company\'s unique product. - Trademarks are essential for branding and creating a successful business. Absolute grounds for refusal of registration of a trademark ----------------------------------------------------------- Absolute grounds for refusal of trademark registration are reasons why a trademark application might be rejected, regardless of whether the trademark is similar to any existing trademarks. They focus on the trademark itself and its inherent characteristics. ^8^ Here\'s a breakdown of absolute grounds: - **Not Meeting Conceptual Requirements**: The trademark must meet the legal definition of a trademark. It should be capable of distinguishing the goods or services of one company from those of another. ^9^ Simple words or common phrases that don\'t create a unique association with the brand may be rejected. - **Example:** A mark consisting of a simple word like \"Shoes\" for shoes would likely be rejected because it\'s too descriptive and doesn\'t distinguish the brand. Other companies also sell shoes. - **Lack of Distinctiveness**: The trademark should be distinctive and not blend into the background of the market. A bland or generic sign might not create a strong impression on consumers. ^9^ - **Example:** A mark called \"Delicious\" might be rejected for being too generic and not memorable for food products. - **Contrary to Public Order or Morality**: The trademark cannot be offensive, misleading, or violate ethical standards. ^8^\] - **Example:** A mark using offensive language or symbols would be rejected. - **Descriptive Signs**: These signs describe the goods or services without indicating their origin. They simply tell you about the product, not who makes it. ^11^. - **Example:** \"Green\" for environmentally friendly cleaning products would likely be rejected as descriptive and not distinctive. - **Customary Signs**: These signs are words or phrases that are commonly used in a language or industry. They lack originality and don\'t indicate any specific source. ^12^ - **Example:** A mark using the common phrase \"Fresh Fruit\" for fruit products might be rejected. - **Shapes**: Trademarks can\'t be solely based on shapes that are inherent to the product\'s nature, result from a technical necessity, or add significant value to the product. ^14^ - **Example:** A trademark for a banana solely resembling a banana shape would likely be rejected because it\'s inherent to the product. - **Acquired Distinctiveness through Use**: Although a trademark might initially be deemed non-distinctive, it can still be granted if it has gained recognition in the market through consistent use. ^13^ This is a special situation where use over time has made the sign unique. - **Example:** A unique, non-distinctive brand name for a specific type of product used consistently in a particular market region might be accepted based on acquired distinctiveness. These absolute grounds ensure that trademarks reflect originality, distinctiveness, and ethical standards, creating a fair and organized market for businesses and consumers. Relative grounds for refusal of registration of a trademark ----------------------------------------------------------- Relative grounds for trademark registration refusal are different from absolute grounds because they involve **comparing** the trademark to existing **prior rights** held by other trademark owners. ^8^ These grounds protect the value of existing trademarks by preventing confusion in the marketplace, ensuring fair competition, and preventing unfair advantage. ^17^. **Here\'s a detailed explanation:** - **Prior Trademark Rights**: The key concept is the existence of a \"prior trademark\" which is a trademark that was registered or applied for before the trademark you\'re trying to register. ^17^ This includes those registered in Spain and the EU. ^17^ - **Likelihood of Confusion**: The most important factor is whether the new trademark is confusingly similar to a prior trademark, especially if they are used for similar goods or services. ^18^ - **Example:** If \"Apple\" is a registered trademark for computers, and someone tries to register \"Appleton\" for similar electronic devices, the application might be refused. The similarities could mislead consumers. - **Double Identity**: The most straightforward scenario is \"double identity\"; if the trademark and goods are identical to those of a prior trademark. ^19^ - **Example:** \"Nike\" for shoes is a clear double identity if someone else tries to register \"Nike\" for shoes. - **Likelihood of Confusion**: This includes situations where trademarks are not identical but visually, aurally, or conceptually similar and could cause confusion. ^18^ - **Well-Known Trademarks**: Even for goods or services that differ, a trademark that is well-known in the market receives special protection. Using a similar mark can take unfair advantage or harm the well-known brand\'s reputation. ^21^ - **Example:** \"Apple\" for computers is a well-known brand. A brand trying to register \"iApple\" for clothing might be refused because of the potential negative impact on the reputation of the \"Apple\" brand, even though the goods are different.. Therefore, relative grounds primarily aim to ensure trademarks are distinctive and don\'t infringe on the pre-existing rights of others in the market. This ensures fair competition, prevents confusion among consumers, and safeguards the valuable assets that trademarks represent for businesses. Content and limits of the rights conferred by a trademark --------------------------------------------------------- The rights conferred by a trademark are significant, allowing the owner to prevent others from using their mark or similar ones to create potential confusion in the market. **Here\'s a breakdown of the content and limitations of those rights:** **Content of Trademark Rights** - **Exclusive Use**: The trademark owner has the exclusive right to use the registered trademark for the goods or services specified in the registration. ^24^ This means others cannot use the same or a similar mark for the same or similar goods without permission. - **Prevention of Infringement**: The owner can stop third parties from using a sign that is identical or similar to their trademark in relation to identical or similar goods, even if the third party\'s mark is not registered. ^25^ This includes cases of **likelihood of confusion** and **unfair advantage** or **detriment** to the reputation of the trademark. - **Prevention of Counterfeiting**: The owner is entitled to stop the import of counterfeit goods bearing their trademark into the European Union (EU). ^27^ The EU prioritizes action against counterfeiting at customs to prevent infringing goods from entering the market. - **Enforcement Actions**: Trademark owners have the right to take legal action against infringement or counterfeiting. This includes seeking injunctions, damages, and other remedies. **Limits of Trademark Rights** - **Exhaustion of Trademark Rights**: Once goods bearing a trademark are sold by the owner or with their consent in the EU, the owner cannot limit further sale of those goods in the EU market. ^28^ This exception is known as the \"doctrine of exhaustion\" and limits the ability to control the second sale of goods within the EU market. - **Legitimate Reasons for Opposition**: The doctrine of exhaustion has an exception: The trademark owner can oppose further sales if there are **legitimate reasons** to do so, such as a change or impairment in the condition of the goods. ^28^ This exception protects the trademark and reputation of the goods. - **Third-Party Use:** Trademark owners are **not** entitled to prevent third parties from using their names or addresses in their trade activities. ^29^ Furthermore, they are not entitled to prohibit the use of their trademarks for the purpose of identifying or referring to goods or services as those of the proprietor of that trademark, particularly when it\'s necessary to indicate the intended purpose of a product or service (e.g., as accessories or spare parts). - **Honest Practices**: The third-party use must be in accordance with honest practices in industrial or commercial matters. ^29^\] This limits the use of the trademark for unfair competition or misleading consumers. - **Later Trademarks:** If a third party registers a trademark, and it does not invalidate the prior trademark (because it was registered for different goods or services), the owner of the prior trademark cannot prevent the use of the later trademark. ^29^ In summary, while trademark rights are valuable for protecting a business\'s brand and reputation, they are not absolute, and they must be balanced with various factors to ensure fairness and avoid market distortions. Legal actions available for the owner of a trademark ---------------------------------------------------- Okay, here are the legal options available to a trademark owner who believes their rights have been infringed upon: **Civil Actions** - **Purpose**: To protect the owner\'s exclusive rights and prevent any detrimental effects on the trademark. - **Types of Claims**: - **Cessation**: To stop the infringement or any activities directly infringing on the trademark. This includes stopping the production, import, export, or distribution of infringing goods or services. - **Compensation**: The owner can seek financial compensation to cover damages, losses, and profits unfairly gained by the infringer. - **Measures to Avoid Continuation**: Court orders can be issued to prevent the infringer from continuing the infringing activities. - **Destruction or Transfer of Goods**: Infringing goods can be ordered to be destroyed or transferred under specific circumstances, such as for humanitarian purposes. - **Attribution of Property**: The infringer\'s property can be attributed to the owner, especially if the infringement was willful or malicious. - **Publication of the Judgment**: The court can order the publication of the judgment to alert the public about the infringement and deter future violations. - **Requirements for Bringing a Civil Action**: - **Genuine Use**: The owner needs to prove that the trademark has been genuinely used or there\'s a justifiable reason for not using it. - **Time Limitation** : Generally, in Spain, there is a 5-year time limit to initiate civil actions for infringement. - **National Laws**: The specific legal actions available and the procedures for filing them are governed by national laws. In Spain, the law relating to trademark infringement is specified in **Article 41.1 LM** ^32^ and the **Spanish Civil Procedure Code**.^32^ **Criminal Actions** - **Purpose**: To penalize particularly serious cases of counterfeiting or trademark infringement involving criminal intent. - **Legal Grounds**: Criminal action may be taken against individuals or companies who knowingly and intentionally infringe on trademarks. - **Examples**: Production, distribution, or sale of counterfeit goods that could deceive consumers may lead to criminal charges. - **National Laws**: In Spain, the criminal code (**Article 274 CP**) ^32^ addresses criminal trademark infringement. - **EU Legislation**: The **EU Trademark Regulation (REUT)** ^32^ indicates that EU trademark infringement enforcement follows national laws, and the **EUIPO** ^32^ (European Union Intellectual Property Office) handles trademark registration. - **EUIPO** ^32^ plays a crucial role in enforcing trademark rights within the EU. Overall, the legal actions available to trademark owners provide a comprehensive framework to protect their trademarks, deter infringement, maintain brand integrity, and ensure fair competition within the market. Transfer and licensing of a trademark ------------------------------------- **Transfer** - **Concept**: Transferring a trademark involves the owner relinquishing ownership rights to another party. This transfer can cover the entire trademark or just a portion of its rights, such as for specific goods or services. - **Requirements**: - **Written Agreement**: A written contract is necessary, usually including details of the goods or services covered, the geographical scope, and the transfer price. - **Signature**: The transfer agreement needs to be signed by both parties and witnessed by authorized individuals. - **Registration**: The transfer must be recorded in the relevant trademark register (either national or EU) to be valid. - **Consequences**: - **Succession**: The new owner gains the same rights and responsibilities that the original owner had for the trademark. - **Restrictions**: Unless explicitly stated, the transfer of the entire undertaking usually implies the transfer of the trademark. - **Examples**: - **A company selling its product line to another company**: The new owner acquires the trademark rights for those products. - **A company divesting some of its brands**: The trademarks related to those specific brands are transferred to the new owner. **Licensing** - **Concept**: Trademark licensing allows the owner to grant permission to another party to use the trademark for specific goods or services. This is done without transferring ownership of the trademark. - **Types**: - **Global vs. Partial**: Global licenses cover all goods or services associated with the trademark; Partial licenses only cover a specific category. - **Exclusive vs. Non-exclusive**: Exclusive licenses prevent the owner from granting licenses to other parties; Non-exclusive licenses allow multiple parties to use the trademark under agreement. - **Duration**: Licenses can be granted for a fixed period (like a year or several years) or for the entire duration of the trademark registration. - **Rights**: The licensee gains the right to use the trademark for the designated goods or services under specific conditions outlined in the license agreement. - **Obligations**: - **Quality Control**: The licensee typically has the obligation to ensure goods or services meet specific quality standards associated with the trademark. - **Reporting**: Depending on the license agreement, the licensee may be required to regularly report about their activities and sales related to the licensed products. - **Control Rights of The Trademark Owner**: The owner retains certain control rights, such as monitoring the licensee\'s activities, ensuring compliance with quality standards, and the ability to terminate the license under specific conditions. - **Examples**: - **A sports brand licensing its trademark for clothing**: The clothing maker can then sell clothes with the sports brand\'s logo, but they do not own the trademark itself. - **A technology company licensing its software trademarks to other developers**: The software can be sold to consumers using the technology company\'s trademark branding. **Key Takeaway**: Transferring and licensing a trademark are powerful tools to expand a brand\'s reach, enter new markets, and generate revenue. However, it is crucial to understand the legal considerations and specific requirements to ensure the validity and effectiveness of any transfer or license agreement. Surrender, revocation and invalidity of a trademark --------------------------------------------------- Here's a detailed breakdown of surrender, revocation, and invalidity of a trademark, with examples: **1. Surrender** - **Definition**: A voluntary act by the trademark owner to relinquish all rights to the trademark. ^40^ - **Process**: The owner submits a written declaration to the relevant trademark office (OEPM in Spain, EUIPO in the EU) signifying their intent to surrender. - **Consequences**: The trademark is removed from the register, and the owner loses all rights associated with it. - **Reasons**: A trademark that is simply not used or no longer relevant to a company may be surrendered. **2. Revocation** - **Definition**: The official cancellation of a registered trademark due to various grounds set forth by law. ^40^ - **Process**: - **Application**: A party (often the owner of a prior trademark) can file an application for revocation with the trademark office. - **Grounds**: Revocation is based on legal grounds established by the REUT (EU) or national law (like Spain\'s LM). - **Reasons for Revocation**: - **Lack of Genuine Use**: The trademark holder has not genuinely used the trademark for a continuous period of five years.^41^ - **Generic Term**: The trademark has become the common name for a product or service in the trade. ^41^ - **Deceptive Signs**: The trademark is misleading to the public, particularly as to the nature, quality, or geographical origin of the goods or services. ^41^ - **Consequences**: The trademark is removed from the register, and the owner loses all rights associated with it. **3. Invalidity** - **Definition**: A trademark can be declared invalid if it did not meet the necessary legal requirements at the time of registration or if it violates the rights of other trademark holders. - **Types**: - **Absolute Invalidity**: The trademark itself is considered inherently deficient, often based on absolute grounds for refusal of registration. ^35^ This includes cases where the trademark doesn't meet a legal definition or is deceptive, misleading, or contrary to public policy. - **Relative Invalidity**: The trademark is invalid in relation to a pre-existing trademark. ^36^ This is based on considerations regarding similarity, confusion, or infringement of prior rights. - **Partial Invalidity**: When the invalidity is related to only specific goods or services within the trademark registration. ^37^ - **Consequences**: The trademark is declared invalid, and the owner loses all rights associated with it. **Grounds for Invalidity** - **Bad Faith Filing**: An applicant files the trademark application with the intention to deceive or mislead others. ^35^ - **Trademarks Infringing Absolute Grounds**: The trademark registration violated absolute grounds for refusal. ^35^ - **Prior Trademark Rights**: The new trademark is similar or identical to a pre-existing registered trademark that covers similar goods. ^36^ This is also known as a "likelihood of confusion" scenario. - **Shape**: Trademarks based on shapes that are inherent to the product\'s nature, essential for a technical result, or add significant value to the product may be invalid. ^14^ **Examples of Invalidity** - A trademark for a product claiming to be "lactose-free" is later found to contain lactose. This violates public policy and is considered a deceptive sign, leading to a potential declaration of invalidity. - A trademark for a specific type of shoe is found to be almost identical in appearance and used for similar shoes as a prior registered trademark. The similarity can lead to the trademark's invalidity. **Remember**: Understanding these concepts about trademark sur

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