1£®European Competition Law Overview
1.1 Application of Competition Law in EU
European Competition Law is applicable in all economic fields. Not only traditional economic entities, but also monopolized state owned enterprises, such as broadcasting, energy and post are under the regulation of EU competition law with the exception of special economic sections of agriculture and transportation.
The core position of competition law in EU has been imitated by many country members of EU. Member states have formulated competition law or have remedied their former competition law so that their domestic law is in accordance with EU competition law. 1£¨E.-J. Mestmaecke£¬1988£©
1.2 Regulations of EU competition law on limited competition behaviors
The provision of item 1, article 81 in EU agreement has not only concluded a general provision but also has pointed out a series of conditions of competition restriction. The conditions are as follows:
Condition 1: to fix the purchase or sales price or any other transaction conditions directly or indirectly;
Condition 2: to restrict or control production, market, technological development or investment;
Condition 3: to split market or commodity source;
Condition 4: to apply different transaction conditions to objects under the same situation so that the objects would be faced with discrimination and stay in disadvantageous position of competition;
Condition 5: to force other objects to accept additional conditions (such as binding selling) that have no relations with contract object either in nature or in commercial convention.2£¨Lenz ¡¢Hrsg£¬1991£©
Agreements that could be exempted from the jurisdiction of the competition law mainly include the following types: solely sales agreements; solely purchase agreements; specialized agreement; cooperation agreement in the research and development fields; franchise agreement and technology transfer agreement. Besides, when European Commission is determining whether certain agreement could be exempted according to provision 240, 1996, three standards would be adopted, namely, market shares; sales value and the expiration of cartel. 3£¨Ingo Schmidt£¬1987£©
The Hoffman-La Roche case4 addressed the nature of ¡®abuse¡¯. The courts stated that it is: ¡® an objective concept relating to the behavior of an undertaking in a dominant position which is such as to influence the structure of a market where , as a result of the very pressure of the undertaking in question, the degree is weakened and which, through resources and methods different from those which conditions normal competition in products or services on the basis of transactions of commercial operators, has the effect of hindering of the maintenance of the degree of competition still existing in the market or the growth of that completion.¡¯
1.3 Execution of EU competition law
1.3.1 Executive organizations of EU competition law
1.3.2 Trial procedure of EU competition law
1¡¢Release of denial certificate
2. Applying for pardon procedure
3. Exclusion of lawbreaking behaviors
1.3.3 Law relief of European competition law
2£®Case study on OD
2.1 Case summary
2.2 Suspected violation of EU competition law by OD
2.2.1 EU competition law is applicable for the business of OD.
2.2.3 New reward system introduced by OD has restricted competition.
2.2.4 Tying contracts of OD has restricted competition.
2.2.6 The merger between OD and BBRB in Belgium should be censored.
In order to restrain the internal economic centralization and monopoly trend within European Community, EC has formulated and published an act to control merger among enterprises. On December 2.2.8 The National Competition Authorities and the Commission wish to conduct a ¡®dawn raid¡¯ in the four EU territories.

Reference:

Students must answer the following question
LLM International Trade
LLM International Commercial Law
LLM International Information Technology Law
Question
EU Competition Law Resit Assignment 2005
Submission 1pm 10 August 2005

Oz Drinks [OD] is an Australian brewer of alcoholic beverages, with its headquarters in Sydney and a European headquarters in London. It has entered into an exclusive distribution agreement with Aberbooze Ltd., an alcohol distribution company, based in Aberdeen.

Aberbooze has a network of distribution warehouses and individual stores in Scotland, the Czech Republic, Germany and the Netherlands.

Oz Drinks has informed Aberbooze that the retail price of Australian wine in Scotland must be ¡ê6 whilst in the Czech Republic and Germany, the price must be €6. The price in the Netherlands is to be set at between €8 and €10. In the case of the Czech Republic and Germany, OD has stated that transportation costs are the reason for the price differential, whilst in the Netherlands, OD states that market research illustrates that Dutch customers are prepared to pay a premium for Australasian wine. The wine crates supplied by OD to Aberbooze contain an RFID chip which allows OD to track shipments across Europe. OD has decreed that wine crates must only be delivered to the named country of supply. If OD discovers that crates destined for one EU country are delivered to another EU country, then a fine of €1000 per crate is payable by Aberbooze and in serious cases termination of the contract will follow.

OD has also introduced a new reward system. OD has informed Aberbooze that if it sources 20% of its Australian wine requirements from OD then Aberbooze will receive a 10% discount. If Aberbooze sources 50% of its requirements from OD, the discount increases to 30% and if Aberbooze sources 90% of its requirements from OD then the discount will be increased to 50%.

Oz Drinks also produce a range of Australian beers. 'Strewth' beer is brewed by OD and is unique in being the strongest beer in the world. Aberbooze has been given an EU-wide licence to sell and market this beer by OD. OD has informed Aberbooze that 'Strewth' beer must be sold complete with a 'stubby' holder, a rubberised container for keeping beer cold. OD has also offered to supply Aberbooze with 100 free cooler cabinets in which to sell 'Strewth' beer. However, it is a condition that Aberbooze must also stock these cooler cabinets with 'Billabong Brown,' a syrupy low alcohol ale that has not been selling well in Australia and the rest of the world. Each cooler cabinet must be stocked with 70% of 'Billabong Brown.'

The Cold Beer company, based in Glasgow, Scotland, has asked Oz Drinks to supply it with a million 'stubby' holders. Oz Drinks holds the design and trade mark rights for 'stubby' holders. Oz Drinks has refused the request.

Oz Drinks has decided to begin brewing 'Strewth' beer in the EU, due to the increasing distribution costs of importing the beer from Sydney. The Scottish Executive is keen to attract OD to Cruden Bay, Aberdeenshire. The Executive has offered OD a tax free loan to buy a factory in Cruden Bay. In addition, for 4 years, the Executive will give a rebate on corporation tax worth ¡ê70,000. Smaller companies wishing to relocate to Cruden Bay have only been offered the tax free loan.

Belgian Beers 'R' Best B.V. [BBRB], the largest brewer in Belgium, has commenced talks with Oz Drinks, with a view to merging. The worldwide alcohol brewing market has seen major consolidation in the last few years.

The National Competition Authorities and the European Commission have received letters of complaint from a number of customers in Germany, the Netherlands, Scotland and the Czech Republic.

The National Competition Authorities and the Commission are working in close cooperation with one another and wish to conduct a 'dawn raid' in the four EU territories. In particular, the officials wish to inspect the homes of the Managing Directors of Aberbooze and Oz Drinks. They have also intimated a desire to refuse to allow the Company Secretaries of both firms to contact their legal representatives during such a raid and to seal off rooms and confiscate files and laptops during the proposed investigation.

Identify, discuss and critically evaluate the legal issues raised by the scenario.

Your answer should include adequate legal authority. Your essay should be no longer than 4,000 words. This maximum word count does not include footnotes. However, footnotes should be used judiciously. Excessive wordage will be penalised. Your attention is also drawn to the ABS Rules on Plagiarism.

Plagiarism (i.e. presenting the thoughts or writings of others as your original work, without properly identifying and referencing the source), falsifying or fabricating data, copying from another student's work, etc. are unacceptable behaviour. Any allegations of such cheating in assessments will be reported to one of the Assistant Deans of the Aberdeen Business School, and dealt with as academic misconduct in accordance with the University's Academic Regulations. Aiding and abetting another student to commit academic misconduct will be dealt with in the same way. The Assistant Dean has the authority to apply a range of penalties in proven cases.