CARTELS

This type of agreement, censured by Article 81 EC, assumes cooperation by the parties involved (generally in an oligopoly situation), founded on an exchange of information likely to distort competition. The ruling of 28 May 1998 by the Court of Justice (Case C-7/95 P) establishes jurisprudence on the matter. In this case, the fact that the specific and regular exchange of information on tractor sales in the United Kingdom was practiced by the eight leading manufacturers clearly constituted a cartel.

In November 2008, the European Commission imposed fines totalling more than €1.3 billion on four glass manufacturers for having concluded, between 1998 and 2003, illegal market-sharing agreements and exchanged commercially sensitive information concerning glass deliveries for the automobile sector.

ABUSE OF DOMINANT POSITION

This capacity for a firm to enjoy a position of economic strength that enables it to prevent effective competition being maintained on a relevant market is condemned by Article 82 EC. This draws up a non-exhaustive list of prohibited practices. The principal index of a dominant position is market share: if it is above 50%, a dominant position may be assumed, according to the Court of Justice (Michelin judgement of 9 November 1983).

In March 2004, the Commission fined Microsoft €497 million for abuse of dominant position on the operating systems market by linking the sale of Windows with that of Media Player. Furthermore, Microsoft had to reveal information on interfaces in order to ensure interoperability with other competitors and offer equipment providers a version of Windows without the pre-installed multimedia player. Considering that Microsoft had not provided sufficient information to competitors on interoperability, the Commission imposed new sanctions of €280 million on the company in July 2006.

MERGERS

While the majority of mergers make it possible to broaden the market to the benefit of the economy, some reduce competition by reinforcing or creating a dominant party. The control of mergers, governed by Regulation 139/2004, is the responsibility of the Commission when it involves firms with turnovers in excess of €5 billion, of which at least two have a turnover of €250 million in the EU.

The Commission may prohibit a merger between two competitive firms if there is a market overlap. On this basis, it blocked the acquisition of Aer Lingus by Ryanair, in 2007, considering that the new entity would be in a monopoly situation on 22 routes departing from Dublin, which would result in price increases for passengers.

The Court of First Instance has the competence to judge appeals by undertakings against decisions taken by the Commission in terms of mergers. In June 2002, it invalidated the decision to block the merger between Airtours and First Choice, considering that the negative effects of the merger on competition were not sufficiently proven by the Commission.

STATE AID

Competition restrictions may also be due to governments when they grant public aid to economic operators. Article 87 EC establishes the conditions of their incompatibility. The Court of Justice ruled, on 24 July 2003, that setting up or granting subsidies for services of general economic interest constitutes state aid compatible with Community law if the advantage gained offsets the excess costs due to the accomplishment of these public service obligations (Altmark Trans judgement, Case C-280/00).

On 20 May 2008, the Commission declared as illegal the measure setting up a fishing hazards prevention fund (FPAP), instituted from November 2004 to January 2006 by France, to partially offset the high fuel costs borne by fishing enterprises. It ordered France to recover the illegally granted aid of approximately €70 million.

The principal index of a dominant position is market share