Is The Safe Harbour Open For Restrictions Of Competition By Object? - An Examination Of The Condition “To An Appreciable Extent” In Light Of EU Competition Law

Abstract: The general goal of the Treaty on the functioning of the European Union is to create a social market economy, where free competition is crucial. The Competition rules, governing the actions of the parties on the Swedish and EU market, aim to prevent conduct that may restrict effective competition. From an economic point of view it is necessary to have the ability to influence the market in order to restrict effective competition. The condition, that a restriction of competition must have an appreciable effect is therefore at the centre of the question of market power. In this paper I discuss the necessary depth and sophistication of the market definition required to satisfy the appreciability requirement in relation to agreements that restrict competition by object. I also discuss what the relevant factors and thresholds are in the assessment such agreements. The definition of the relevant market has been considered a necessary precondition in order to establish whether an agreement appreciably restrict competition. Although, the EU courts have stated that the market must only be defined, where it would be impossible without such a definition to find that the prohibition has been infringed. The reasoning follows from case law stating that it is not necessary to analyse agreements in their economic and legal context once it has been established that they obviously restrict competition. The obviousness of the restriction may be inferred primarily from the nature of the agreement and from a summary assessment of the circumstances relevant in the case. Perhaps, guidance as to the obviousness of the restriction comes from asking whether it is clear that the market shares, without being precisely determined, far exceed 5 %. In addition to defining the market in order to satisfy the conditions in 2 ch. 1 § SCA and Art. 101(1) TFEU, it is necessary to define the market in sufficient detail to satisfy the essential requirement of legal certainty. The application of the appreciability requirement in cases where the agreement restrict competition by object is debated within the EU. However, it seems as though both Swedish and EU courts have settled that it is necessary to apply the condition in object as well as effect cases. The assessment of the appreciability condition is divided into a quantitative and a qualitative aspect. The quantitative analysis generally considers the position and importance of the parties and the structure on the market. There is no clear guidance as to the level of the market share threshold from either the EU guidelines or the Swedish and EU courts, in relation to object restrictions. The uncertainty regarding the appreciable effects of an agreement may, however, start to become evident where the market share of the undertakings moves below 5 %. The qualitative aspect considers whether the restriction in itself is insignificant. This analysis takes into account the nature of the agreement and whether an established restriction is limited by objectively ascertainable factors, such as national legislation.