The Gazette 1992

GAZETTE

JANUARY/FEBRUARY 1992

any form of cartel will always be p r oh i b i t ed under t he Ac t. In contrast, an arrangement such as a joint venture wh i ch infringes Section 4 (1) may be permitted under Section 4 (2) where it is seen ultimately to benefit the market. It is also wo r th noting that Section 4 (1) will apply to the decisions of trade associations. It was not apparent from the initial draft of the Competition Bill as to whether this wou ld be the case, but, following an amendment intro- duced by the Minister, it would now appear that trade associations are subject to review under Section 4 of the Act. The parties to an agreement which appears to restrict competition within the meaning of Section 4 (1) may notify their agreement to the Comp e t i t i on Au t h o r i ty for its approval under Section 4 (2). Generally, a restrictive agreement may be permitted under Section 4 (2) where, ultimately, it brings more benefit than harm to the market. For example, an exclusive dis- tribution agreement may infringe Section 4 (1); in particular, if ex- clusivity forecloses competition from the distributor's competitors. However, an exclusive agreement may be permitted under Section 4 (2) provided that it does not contain any p r ov i s i ons w h i ch undu ly restrict competition. The type of provision in an exclusive distri- bution agreement wh i ch might be unacceptable under Section 4 (2)

wo u l d be any a r r a n g eme nt whereby the supplier dictated the prices and conditions at wh i ch the distributor would resell the goods supplied under the agreement. Approval is granted under Section 4 (2) in the form of a licence. Four conditions are listed in Section 4 (2) wh i ch must be satisfied if a licence is to be granted. Generally, t he ag r eement mu st imp r ove production or distribution or the provision of services or technical or economic progress whilst allowing consumers a fair share of the resulting benefit. At the same time, the agreement must not contain unnecessary restrictions and must not allow the parties the possibility of s u b s t a n t i a l ly e l i m i n a t i ng competition. Licences are granted for a specified period, though this may be ex- tended subsequently, and may be granted subject to conditions. Alternatively, if the Competition Authority decides that an agree- ment does not restrict competition within the meaning of Section 4 (1), it may issue a certificate to that effect. Certificates are granted under Section 4 (4) of the Act. It is likely that parties will apply for certificates and licences in the alternative. A de c i s i on on a l i cence or certificate may be appealed to the High Court. Appeals may be taken by the Minister and companies or trade associations "concerned", or any other person "aggrieved", by a licence or certificate.

One problem that companies will face, at least for the time being, is the absence of block exemption regulations. At the EC level, an agreement wh i ch infringes Article 85 (1) is automatically exempted and approved if it complies with the terms of an EC Commission block exemption regulation. This saves companies the time and costs involved in notifying agreements to the EC Commission for individual exemption under Article 85 (3). The Competition Authority has indi- cated that similar regulations may be introduced in due course. In the meantime, Irish companies may have to notify agreements to the Authority in circumstances where a block exemption regulation could ope r a te to app r ove t h em automatically. Section 5 - the abuse of a dominant position Section 5 prohibits the abuse of a dominant position. It should be stressed that dominance as such is not unlawful, rather, it is the abuse of a dominant position that is prohibited by the Act. In assessing issues under Section 5 one must firstly determine whether a company is dominant and, if so, whether it has abused its dominant position. In relation to dominance, it is necessary to define the relevant market and the company's position in that market. The relevant market is determined by reference to the relevant product and geographical markets.

Doyle Court Reporters Principal: Áine O'Farrell Court and Conference Verbatim Reporting Specialists in Overnight Transcription 2, Arran Quay, Dublin 7. Tel: 722833 or 862097 (After Hours) Fax: 724486 E^ceCtence in %Sporting since 1954

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