Keywords

Summary



Keywords

1 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - PROHIBITION - NON-COMPETITION CLAUSES IN AN AGREEMENT FOR THE TRANSFER OF AN UNDERTAKING - PERMISSIBILITY - CONDITIONS

( EEC TREATY , ART . 85 ( 1 ))

2 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - EFFECT ON TRADE BETWEEN MEMBER STATES - CRITERIA - AGREEMENT COVERING THE WHOLE TERRITORY OF A MEMBER STATE

( EEC TREATY , ART . 85 ( 1 ))

3 . MEASURES ADOPTED BY THE COMMUNITY INSTITUTIONS - OBLIGATION TO STATE REASONS - EXTENT - DECISION APPLYING THE COMPETITION RULES

( EEC TREATY , ART . 190 )

4.ACTION FOR A DECLARATION THAT A MEASURE IS VOID - COMMISSION DECISION ADOPTED PURSUANT TO ARTICLE 85 ( 1 ) OF THE TREATY - COMPLEX EVALUATION OF ECONOMIC MATTERS - JUDICIAL REVIEW - LIMITS

( EEC TREATY , ARTS . 85 ( 1 ) AND 173 )

5 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - PROHIBITION - EXEMPTION - DUTY OF THE UNDERTAKING CONCERNED TO SHOW THAT ITS REQUEST IS WELL FOUNDED

( EEC TREATY , ART . 85 ( 3 ))

Summary

1 . THE FACT THAT NON-COMPETITION CLAUSES ARE INCLUDED IN AN AGREEMENT FOR THE TRANSFER OF AN UNDERTAKING IS NOT OF ITSELF SUFFICIENT TO REMOVE SUCH CLAUSES FROM THE SCOPE OF ARTICLE 85 ( 1 ) OF THE TREATY . IN ORDER TO DETERMINE WHETHER OR NOT SUCH CLAUSES COME WITHIN THE PROHIBITION IN ARTICLE 85 ( 1 ), IT IS NECESSARY TO EXAMINE WHAT WOULD BE THE STATE OF COMPETITION IF THOSE CLAUSES DID NOT EXIST . IF NO NON-COMPETITION CLAUSE IS LAID DOWN , AND IF THE VENDOR AND THE PURCHASER REMAIN COMPETITORS AFTER THE TRANSFER , IT IS CLEAR THAT THE AGREEMENT FOR THE TRANSFER OF THE UNDERTAKING CANNOT BE GIVEN EFFECT . THE VENDOR , WITH HIS PARTICULARLY DETAILED KNOWLEDGE OF THE TRANSFERRED UNDERTAKING , WILL STILL BE IN A POSITION TO WIN BACK HIS FORMER CUSTOMERS IMMEDIATELY AFTER THE TRANSFER AND THEREBY DRIVE THE UNDERTAKING OUT OF BUSINESS . AGAINST THAT BACKGROUND NON-COMPETITION CLAUSES INCORPORATED IN AN AGREEMENT FOR THE TRANSFER OF AN UNDERTAKING IN PRINCIPLE HAVE THE MERIT OF ENSURING THAT THE TRANSFER HAS THE EFFECT INTENDED . BY VIRTUE OF THAT VERY FACT THEY CONTRIBUTE TO THE PROMOTION OF COMPETITION BECAUSE THEY LEAD TO AN INCREASE IN THE NUMBER OF UNDERTAKINGS IN THE MARKET IN QUESTION .

NEVERTHELESS , IN ORDER TO HAVE THAT BENEFICIAL EFFECT ON COMPETITION , SUCH CLAUSES MUST BE NECESSARY TO THE TRANSFER OF THE UNDERTAKING CONCERNED AND THEIR DURATION AND SCOPE MUST BE STRICTLY LIMITED TO THAT PURPOSE . WHERE THOSE CONDITIONS ARE SATISFIED SUCH CLAUSES DO NOT COME WITHIN THE SCOPE OF THE PROHIBITION LAID DOWN IN ARTICLE 85 ( 1 ).

2 . IN ORDER THAT AN AGREEMENT BETWEEN UNDERTAKINGS MAY AFFECT TRADE BETWEEN MEMBER STATES IT MUST BE POSSIBLE TO FORESEE WITH A SUFFICIENT DEGREE OF PROBABILITY ON THE BASIS OF A SET OF OBJECTIVE FACTORS OF LAW OR FACT THAT IT MAY HAVE AN INFLUENCE , DIRECT OR INDIRECT , ACTUAL OR POTENTIAL , ON THE PATTERN OF TRADE BETWEEN MEMBER STATES , SUCH AS MIGHT PREJUDICE THE REALIZATION OF THE AIM OF A SINGLE MARKET IN ALL THE MEMBER STATES . ANY SUCH AGREEMENT OR PRACTICE RESTRICTING COMPETITION AND EXTENDING OVER THE WHOLE TERRITORY OF A MEMBER STATE BY ITS VERY NATURE HAS THE EFFECT OF REINFORCING THE COMPARTMENTALIZATION OF MARKETS ON A NATIONAL BASIS , THEREBY HOLDING UP THE ECONOMIC INTERPENETRATION WHICH THE TREATY IS INTENDED TO BRING ABOUT .

3 . ALTHOUGH , WHEN ADOPTING A DECISION APPLYING THE COMPETITION RULES , THE COMMISSION IS REQUIRED BY ARTICLE 190 OF THE EEC TREATY TO STATE THE FACTUAL MATTERS JUSTIFYING THE DECISION , TOGETHER WITH THE LEGAL CONSIDERATIONS WHICH HAVE LED TO ITS ADOPTING IT , THAT ARTICLE DOES NOT REQUIRE IT TO DISCUSS ALL THE MATTERS OF FACT AND OF LAW WHICH MAY HAVE BEEN DEALT WITH DURING THE ADMINISTRATIVE PROCEEDINGS . THE STATEMENT OF THE REASONS ON WHICH A DECISION ADVERSELY AFFECTING A PERSON IS BASED MUST ALLOW THE COURT TO EXERCISE ITS POWER OF REVIEW AS TO THE LEGALITY OF THE DECISION AND MUST PROVIDE THE PERSON CONCERNED WITH THE INFORMATION NECESSARY TO ENABLE HIM TO DECIDE WHETHER OR NOT THE DECISION IS WELL FOUNDED .

4 . ALTHOUGH AS A GENERAL RULE THE COURT UNDERTAKES A COMPREHENSIVE REVIEW OF THE QUESTION WHETHER OR NOT THE CONDITIONS FOR THE APPLICATION OF ARTICLE 85 ( 1 ) ARE MET , IT IS CLEAR THAT IN DETERMINING THE PERMISSIBLE DURATION OF A NON-COMPETITION CLAUSE INCORPORATED IN AN AGREEMENT FOR THE TRANSFER OF AN UNDERTAKING THE COMMISSION HAS TO APPRAISE COMPLEX ECONOMIC MATTERS . THE COURT MUST THEREFORE LIMIT ITS REVIEW OF SUCH AN APPRAISAL TO VERIFYING WHETHER THE RELEVANT PROCEDURAL RULES HAVE BEEN COMPLIED WITH , WHETHER THE STATEMENT OF THE REASONS FOR THE DECISION IS ADEQUATE , WHETHER THE FACTS HAVE BEEN ACCURATELY STATED AND WHETHER THERE HAS BEEN ANY MANIFEST ERROR OF APPRAISAL OR MISUSE OF POWERS .

5 . WHERE AN EXEMPTION FROM THE PROHIBITION OF RESTRICTIVE AGREEMENTS IS BEING APPLIED FOR UNDER ARTICLE 85 ( 3 ) OF THE TREATY IT IS IN THE FIRST PLACE FOR THE UNDERTAKINGS CONCERNED TO PRESENT TO THE COMMISSION THE EVIDENCE INTENDED TO ESTABLISH THE ECONOMIC JUSTIFICATION FOR AN EXEMPTION .