Table Of ContentTHE APPLICATION OF THE COMPETITION RULES
(ANTITRUST LAW) OF THE EUROPEAN ECONOMIC COMMUNITY
TO ENTERPRISES AND ARRANGEMENTS EXTERNAL
TO THE COMMON MARKET
THE APPLICATION OF THE
COMPETITION RULES (ANTITRUST LAW)
OF THE EUROPEAN ECONOMIC COMMUNITY
TO ENTERPRISES AND ARRANGEMENTS
EXTERNAL TO THE COMMON MARKET
BY
BOAZBARACK
GIRTON COLLEGE
CAMBRIDGE
SPRINGER SCIENCE+BUSINESS MEDIA, LLC 1981
This book was submitted as a dissertationfor the degree of Doctor of Philosophy
in the University of Cambridge (June 1980).
Library of Congress Cataloging in Publication Data
Barack, Boaz.
The application ofthe competition rules (antitrust law) ofthe European Economic Community
to enterprises and arrangements external to the Common Market.
Bibliography: p.
1. Antitrust law-European Economic Community countries. 1. Title.
Law 343.4'072 81-2816
344.0372 AACR2
ISBN 978-94-017-4484-3 ISBN 978-94-017-4482-9 (eBook)
DOI 10.1007/978-94-017-4482-9
© 1981. Springer Science+Business Media New York
Originally published by Kluwer. Deventer. The Netherlands in 1981
Softcover reprint of the hardcover 1s t edition 1981
Ali rights reserved. No part of this book may be reproduced, stored in a retrieval system, or
transmitted in any form by any means, electronic, mechanical, photocopying, recording or
otherwise, without the written permission of the publisher.
I
ACKNOWLEDGMENT
This work is dedicated primarily to the late Prof. Jacques Van Damme
under whose supervision I worked at the College of Europe, Belgium,
where I pursued part of my research. I have benefitted no end from
his wide knowledge and experience in the legal field and enjoyed his
outstanding personality during our working hours. Professor Van
Damme suddenly passed away last summer, and never lived to see this
work completed.
To my supervisor at Cambridg~, Mr. P.J. Allott, lowe thanks for his
cooperation and for patiently bearing with my efforts at writing in a .
language which is not my mother-tongue. It was with Mr. Allott's
recommendation that I benefitted from the immeasurable help of the
Commission of the European Communities, which both provided me with
documents andarlBnged personal meetings with Commission officials.
Grateful acknowledgement is due to the following bodies, who provided
financial assistance and enabled me to carry out this study: Girton
College, Cambridge for their research scholarship; the British Council
(Israel), for their studentship; The Leo Baeck Lodge (London) and the
Minna-James-Heinemann-Stiftung (West Germany) who came to my help when
lack of finance became crucial in the final stage of the research; and
to the Belgian Ministry of National Education and Dutch Culture which
enabled me towork for a period of time at the College of Europe,
Bruges.
III
TABLE OF CONTENTS
Table of Cases xi
Bibliography xviii
List of Abbreviations xxviii
CHAPTER I THE INTERNATIONAL DIMENSIONS OF THE EUROPEAN
ECONOMIC COMMUNITY COMPETITION RULES 1
1. IDENTIFICATION OF PROBLEMS CONCERNING THE
SCOPE OF ANTITRUST LAWS 1
A. At the International Level
B. At the European Economic Community Level 4
2. METHODOLOGY IN THE STUDY OF THE APPLICATION
OF THE COMMUNITY COMPETITION RULES TO ENTER
PRISES AND ARRANGEMENTS EXTERNAL TO THE
COMMON MARKET 8
3. THE SOURCES FOR LIMITATIONS ON THE
JURISDICTION OF THE COMMUNITY IN ANTITRUST
MATTERS 11
A. The International Law Governing Juris
diction in Antitrust Matters With
Reference to Community Competition Law 11
(1) The Relevance of International Law
in Determining the Scope of Community
Competition Rules 11
(2) The Theory of Jurisdiction in
International Law 13
(3) Difficulties in the Application of the
Principles of Jurisdiction of
International law to the Community
Jurisdiction in Antitrust Matters 15
B. The Limitations on Community Jurisdiction
in Antitrust Matters with Foreign
Elements According to the Community
Legislation 25
(1) Community Competition - Conflict of
Laws Rules 26
(2) Terms in Articles 85 and 86 Implying
Jurisdictional Limitations 27
CHAPTER II THEORIES AND PRINCIPLES IN THE APPLICATION OF
COMMUNITY COMPETITION RULES TO NON-COMMUNITY
ENTERPRISES 40
1. "UNDERTAKINGS" AND THE ECONOMIC UNIT THEORY 40
A. The Economic Unit Theory in the Community
Case Law 43
B. Technicalities and Operation of the
Economic Unit Theory 53
IV
Page
(1 ) The Guiding Principles 53
(2) Implementation of the Guiding Principles
in the Case Law 58
(3) The Standards of Proof Required by the
Economic Unit Theory 66
2. "AGREEMENTS BETWEEN UNDERTAKINGS" AND THE
CONCEPT OF AN INTRA-ENTERPRISE CONSPIRACY 74
A. The Intra-Enterprise Conspiracy Concept
in Decisions by the Commission 75
B. The Court of Justice and the Intra-
Enterprise Conspiracy Concept .81
C. The Confusion Concerning the Rationale
and Operation of the Intra-Enterprise
Conspir~cy in Community Law 87
(1 ) Plurality of Acta:s 89
(2) The Need to Cooperate 91
(3) Anticompetitive Object or Effect 93
D. Conclusions on the Scope of Application of
the Intra-Enterprise Conspiracy Concept in
Communit y Law 94
3. THE APPLICATION OF THE COMMUNITY COMPETITION
RULES TO NON-COMMUNITY ENTERPRISES MERELY ON
THE BASIS OF "EFFECTS" ON TRADE AND ON
COMPETITION WITHIN THE COMMON MARKET 97
A. An "Effects Doctrine" in the Community
Case Law 97
(1 ) The Commission and an "Effects
Doctrine" 98
(2) The Court and an "Effects Doctrine" 107
B. Limits on the Application of an "Effects
Doctrine" in Community Law. as Based on the
Intensity of thenEffects" Within the
Common Market 117
CHAPTER III TYPES OF PROHIBITED ARRANGEMENTS WITH FOREIGN
ELEMENTS AND THE VARIOUS FACTORS FOR THEIR
ASSESSMENT 122
1. THE FUNCTION AND OPERATION OF THE REQUIREMENTS
THAT ARRANGEMENTS "MAY AFFECT TRADE BETWEEN
MEMBER STATES" At\[) HAVE AS THEIR "OBJECT OR
EFFECT THE PREVENTION, RESTRICTION OR
DISTORTION OF COMPETITION WITHIN THE COMMON
MAA~T" 1M
A. The Criterion of "May Affect Trade Between
Member States" 124
v
Page
(1) Scope and Meaning of the Requirement 124
(2) Must the Effect on Trade Between Member
States be Non-Negligible? 129
(3) Must the Effect on Trade Between Member
States be Actual or Can it be Possible? 130
(4) May the Effect on Inter-State Trade
be Indirect? 131
B. The Criterion that the "Object or Effect"
of the Practice is "The Prevention,
Restriction or Distortion of Competition
Within the Common Market" 132
(1) Relations Between the Requirement of
Effect on "Trade Between Member States"
and the Requirement of Effect on
"Competition Within the Common Market" 132
(2) "Prevention, Restriction or Distortion of
Competition" as an "Object or Effect" of
the Prohibited Arrangement 134
(3) Impact on Competition of the Required
Effects 140
(4) Complementary Comments Relating to
Article 86 144
2. TYPES OF pROHIBITED ARRANGEMENTS WITH FOREIGN
ELEMENTS AND THEIR ASSESSMENT IN COMMUNITY LAW 148
A. Arrangements Concerning Exports From the
Common Market 149
(1) National Joint-Selling Agencies for
Exports 151
(2) Division of Export Markets by Bans on
Exports to Certain Non-Member States 152
(3) Prohibitions on Exports to all Non-
Member States 153
(4) Control of Export Quantities by
Community Enterprises 157
(5) Exclusive-Dealing Agreements with Non
Community Enterprises Relating to
Exports to Non-Member States 159
(6) Cooperation Agreements Between Community
Enterprises in Respect of Exports 162
(7) Specialization Agreements for Promoting
Sales Outside the Common Market 164
B. Arrangements Concerning Imports Into the
Common Market 165
(1) Voluntary-Import Restraints in
Arrangements Between Community and
Non-Community Enterprises 166
(2) Other Types of Restraints on Imports in
Arrangements Between Community and Non-
Community Enterprises 170
VI
(3) Exclusive Import Agreements Between
Non-Community Producers and Community
Distributors (for Part of the Common
Market or for the Whole of It) 174
(4) Import Prohibitions in Arrangements
Between Community Enterprises 176
(5) The Use of Industrial Property Rights
in Arrangements Prohibiting Imports
from Non-Member States 178
C. International Restrictive Business
Arrangements 182
(1 ) World-Wide Market Sharing Agreements
(Including the Use of Industrial
Property Rights) 183
(2) International Cooperation Between
Community and Non-Community
Enterprises 186
(3) Mergers Betweeen Community and Non-
Community Enterprises 189
D. The Nature of the Limitations on the
Application of the Competition Rules to
Arrangements with Foreign Elements with
Regard to the Type of the Arrangements
Concerned 190
(1 ) Are the Limitations a Result of Strict
Interpretation of the Rules or of
Philosophy Behind the Law? 190
(2) The Change of Approach Through the
Case Law 155
(3) Interpretation of the Competition Rules
as if Having a Qualified "Foreign Trade"
Clause 199
(4) Comments on the Application of Article
86 in Situations with Foreign Elements 200
(5) Is the Law Applicable to Foreigners
Different? 202
3. THE EXTENSION OF THE TERRITORIAL SCOPE OF THE
COMPETITION POLICY IN AGREEMENTS BETWEEN THE
EEC AND THIRD COUNTRIES 204
A. The Free Trade Area Agreements 204
(1) Structure and Principles of the
Agreements 204
(2) Implementation Arrangements 206
(3) The Legal Consequences of the
Competition Clauses 208
VII
B. Partial Free Trade Agreements, Association
Agreements and Cooperation Agreements 216
CHAPTER IV THE ENFORCEMENT JURISDICTION OF THE ERUOPEAN ECONOMIC
COMMUNITY IN RESPECT OF NON~COMMUNITY ENTERPRISES
AND CONDUCT ABROAD 219
1. THE REQUIREMENTS OF PERSONAL JURISDICTION 221
A. The Community Rules of Service of Process
in Competition Matters 221
(1) The Commission's Procedure 221
(2) The Court's Procedure 223
B. Service of Process to Non-Community
Enterprises in Community Case law 224
(1) Practice in the Service of Notices
of Objections 224
(2) Practice in the Service of the
Commission's Final Decisions 229
(3) Service by "Knowledge"; Scope of the
Requirement 233
(4) What is the Proper Connection Between
Service and Jurisdiction in Community
law? 237
1. EXTRATERRITORIAL DISCOVERY ORDERS AND
INVESTIGATIVE MEASURES 240
A. Notification 242
(1) The Application of the Notification
Provisions to Non-Community
Enterprises 242
(2) Notification as a Discovery Technique 244
(3) Information and Documents Relevant to
Notification and in Pursuance of It 246
B. Measures of Discovery and Investigation
other Than Notification and Their Extra-
territorial Application 247
(1) The Relevant Rules and Their Scope 247
(2) The Extraterritorial Scope of Discovery
Orders in Community Case law 251
C. legal Considerations of the Commission in
Issuing Extraterritorial Discovery Orders 258
(1) The Range of Situations in Which
Extraterritorial Discovery Orders May
Be Issued 258
(2) DefencesAvailable Against Discovery
Orders 262
(3) Foreign legal Obstacles to the
Disclosure of Documents 267
