EU Competition Law Tools for Assessing Business Agreements
In the European Union (EU), competition law plays a crucial role in ensuring fair competition among businesses. The EU competition rules aim to prevent anti-competitive practices that can harm consumers and the market. Therefore, it`s essential for businesses to understand the competition law rules and comply with them to avoid hefty fines and legal issues. In this article, we`ll explore the EU competition law tools for assessing business agreements.
Types of Business Agreements
Before delving into the competition law tools, it`s essential to understand the types of business agreements that require assessment. The following are the most common types:
1. Vertical Agreements: These are agreements between businesses operating at different levels of the supply chain, such as manufacturers and retailers.
2. Horizontal Agreements: These are agreements between businesses operating at the same level of the supply chain, such as competitors.
3. Distribution Agreements: These are agreements between suppliers and their distributors.
4. Licensing Agreements: These are agreements between a licensor (owner of intellectual property rights) and a licensee (user of the rights).
EU Competition Law Tools
The EU competition law tools for assessing business agreements include:
1. Block Exemption Regulations (BERs): BERs are rules that exempt certain types of agreements from the prohibition of anticompetitive behavior. For example, the Vertical Restraints BER exempts specific vertical agreements, such as selective distribution, from the prohibition.
2. Guidelines: The European Commission (EC) issues guidelines to provide businesses with practical guidance on how to comply with the competition law rules. For instance, the Guidelines on Vertical Restraints provide guidance on vertical agreements.
3. Case Law: Case law is the body of past court decisions that provide guidance on how competition law applies to specific situations. Businesses can refer to case law to understand how the competition law rules apply to their agreements.
Assessing Business Agreements
To assess whether a business agreement complies with the EU competition law rules, businesses must conduct a competition law analysis. The analysis involves the following:
1. Market Definition: The first step is to define the relevant market for the agreement. The relevant market includes the product market and the geographic market.
2. Market Power: The next step is to determine whether the parties to the agreement have significant market power. Market power means the ability to act independently of competitors and customers.
3. Anti-Competitive Effects: The final step is to assess whether the agreement has anti-competitive effects. Anti-competitive effects include price increases, reduced quality, and reduced innovation.
The EU competition law rules are complex and require a thorough understanding to ensure compliance. Businesses must assess their agreements to ensure they comply with the competition law rules. The EU competition law tools, such as BERs, guidelines, and case law, provide guidance on how to comply with the rules. A competition law analysis, including market definition, market power, and anti-competitive effects, can assist businesses in assessing their agreements. By complying with the EU competition law rules, businesses can avoid legal issues and contribute to fair competition in the EU market.