Competition Law and State Aid
Competition law and State aid
This domain tests Arts 101 and 102 TFEU and the State aid regime. You need the legal elements, the economic reasoning and the procedural consequences.
Core rules
- Art 101 prohibits agreements, decisions or concerted practices between undertakings that prevent, restrict or distort competition, have as their object or effect such restriction, and affect trade between Member States. Art 101(3) requires efficiency, a fair share for consumers, indispensability and no elimination of competition.
- Art 102 prohibits abuse of a dominant position, such as exclusivity, predatory pricing, refusal to supply or loyalty rebates. Dominance is not itself unlawful.
- State aid under Art 107(1): aid granted by a State through State resources, selective advantage, distortion of competition and effect on trade. Notification is required under Art 108; exemptions exist under Art 107(2) and (3).
- Block exemptions and de minimis notices reduce compliance burdens.
Worked example
Two rival suppliers agree to divide customers by territory and exchange future price lists. The agreement is between undertakings, restricts competition by object and affects intra-EU trade. It is prohibited by Art 101(1). The parties cannot rely on Art 101(3) merely because the arrangement is convenient; they would need to prove efficiencies, consumer benefit and indispensability.
Traps
Art 101 requires at least two undertakings; a unilateral policy may fall under Art 102 if the firm is dominant. A dominant firm need not intend to abuse. State aid requires selectivity and State resources as separate conditions. Not all aid is unlawful; it may be exempt or notified.