13. Text 2 comprehension questions

Read the text again and answer these questions.

1 What are the three main areas of concern of competition law?

2 What is the difference between restrictive and anticompetitive practices?

3 On what five principles is the EC competition policy based?

4 What is ‘preventive supervision of mergers’?

5 What is ‘liberalisation of certain sectors of the economy’?

6 What are possible justifications of restrictive agreements?

7 In what situation is a merger likely to attract the attention of the OFT?

13. Text 2 true-false statements

Confirm or refute these statements. Begin with a short answer, e.g. ‘Yes, it is/has/does, etc.’ or ‘No, it isn’t/hasn’t/doesn’t, etc.’ and add one sentence to prove your point.

1. Suppliers are free to fix minimum resale prices at which their goods may be sold by dealers.

2. Reaching a dominant position on the market is illegal.

3. EC competition law is not concerned with fairness of state aid allocated to businesses on the internal market.

4. Resale price maintenance is an example of a horizontal arrangement.

5. EC competition law is not part of the UK law.

6. The UK Competition Commission has no powers to disallow existing mergers.

7. Member States exercise control over mergers with a European dimension.

15. Anticompetitive activities

Law

Match the anticompetitive practices with the examples below. Write in the spaces provided the name of the violation (in some cases more than one).

price-fixing tie-in-arrangements

territorial allocation predatory pricing

abuse of a dominant position creating barriers to entry

bid rigging information exchange cartel

1. A foreign producer of ceramic tiles is trying to get a foothold in the German market. Its operations are seriously undermined by a discount agreement between German manufacturers aimed at protecting them from competition from imports.

2. A large supermarket chain sells nearly 1,000 popular products at below cost price and uses local price cuts and promotions to put pressure on smaller competitors.

3. Five gas utility companies in a country all agree to raise the price of gas.

4. Four companies producing components for the motor industry draw up an agreement which relates to prices to be charged and prices to be paid to suppliers of raw materials. They also agree to share technical and commercial expertise.

5. A bank requires that customers who wish to obtain credit should open an account with the bank.

6. Several local construction companies secretly agree on which of them should win a contract.

7. Four car glass manufacturers from different countries control about 90 per cent of the European market for new and replacement car glass used in windows and sunroofs. They draw up an agreement that involves splitting Europe into four zones, with each company operating in one zone.

8. A British firm with a Community dimension specializing in the production of specialist medical equipment has obtained a 40 per cent share of the market. It charges very high prices and also conducts a vicious price war against a small producer of the same product in Denmark.

9. A foreign company needs a local partner in order to surmount complex bureaucratic procedures favouring domestic suppliers.