Undertakings

Hofner and elser v macrotron

• an employment office owned and organized by the state was held to be an undertaking when head hunting for clients even though it made no charges

• ECJ said:

  • “the concept of an undertaking, in the context of competition law, covers any entity engaged in an economic activity, regardless of the legal status of the entity or the way it is funded”

The concept of undertaking embraces a company, partnership, sole trader or an association. A trust company authroised to police a cartel was held by the commission to be an undertaking. (Italian cast glass)

Aeroports de paris v commission

• ECJ held that ADP operated under official powers and occupied government land did not prevent the application of article 82.

Christian Poucet v Assurances Generals de france (AGP)

• ECJ held that a French regional office administering a compulsory social security scheme was not an undertaking because the contributions were based on social solidarity and proportional to income.

• They bore no relationship risk and could not have been carried on the private sector.

FENIN

• CFI confirmed the commission’s rejection of a complaint on the ground that hospitals buying from the private sectors were not undertakings when acting in the exercise of public activities even if they bought large quantities in favourable terms and enjoyed substantial market power.

• They did not resell what they bought but used it to perform a public function.

• That judgment is contrary to the one in UK Better Care case

  • CFI stated in principle, the act of purchasing itself is not sufficient to turn a public body into an undertaking when the product is not acquired for an economic activity.

Bodson Case

• ECJ ruled that concessions granted by communes acting as public authorities were not agreements between undertakings

• The local authorities were not carrying on an economic activity but an administrative activity.

Custom agents in Italy are classified by Italian law as liberal professions, but are still undertakings. They provide services for pay and accept commercial risks. Their activities have commercial character.

Viho v Commission

• the ECJ confirmed that the corporate group fell outside of art 81(1)

• Export bans imposed on a subsidiary did not infringe article 81 although those imposed on dealers independent of viho had been held to do so and attracted a fine.

• The case law is on wholly owned subsidiaries and partly owned companies has not been worked out yet.

Commercial Solvents

• the conduct of a 51% subsidiary was attributed to its parent when the subsidiary had followed the policy decided by the parent.

• A fine was imposed jointly and severally on the Italian subsidiary and its us parent

Where a subsidiary disobeyed instructions not to discourage imports, the parent had done nothing wrong and that the ECJ decided that it was the subsidiary that should be fined. (BMW Belgium v Commission)

Irish Sugar

• held over 51% of shares in SDL and had the power to adopt a common policy.

• The commission treated the companies as jointly dominant.

Should one infer that a parent and the affiliate more than half owned that does not control day to day is not a single undertaking?

• answer is, sorta… as long as there’s an economic link between them it can arguably be one undertaking

A state owned company that is privatized and no longer subject to control by its former parent, agreements between them may become subject to art 81.

Where a subsidiary sold by a company in the private sector, a geographic restriction of competition between it and another member of the former group of companies may start to infringe art 81(1) (Quantel International)