The Gazette 1993

GAZETTE

SEPTEMBER 1993

The Competition Act and EEC Block Exemptions

Essential Structure of Competition Rules The essential structure of the competition rules is the same in the Treaty of Rome as in the Act and need not detain us long: (i) Anti-competitive agreements or concerted practices between firms are prohibited. (ii) This prohibition can be suspended where the 'four conditions" are met: • resulting economic or technical benefits • consumers get a fair share of these benefits • restrictions are indispensable • competition is not eliminated. (iii) Only the Competition Authority or, under the Treaty, the Commission can decide if the conditions for suspension are met. If they are met, then the prohibition will be suspended either by way of individual decision on the case or by a block/category decision. An individual decision to suspend the prohibition will only be given if the arrangement is notified in the first place. Article 85.3 of the Treaty for a suspension of the prohibition in Article 85.1 by complying with the terms of one of the 12 Block Exemption Regulations issued to date by the Commission. These covered a range of well recognised categories of commercial behaviour whose restrictive effects are deemed to be more than offset by the economic efficiencies they give rise to. Examples are exclusive distribution, exclusive purchasing, franchising, motor vehicle distribution and servicing, know-how licensing etc. Under the Competition Act, the (iv) Restrictive arrangements can qualify automatically (i.e. no need for prior notification) under

Competition Authority is empowered to issue category licences, the domestic equivalent of EEC block exemptions. To date, the Authority has issued one category licence on motor fuel supply arrangements and recently circulated a draft one covering exclusive distribution agreements, (v) The Competition Act covers arrangements whose objects or effect arise within the State, whereas Article 85 of the Treaty is confined to arrangements to the extent that they affect trade between Member States. Before focusing on EEC block exemptions, it is worthwhile reiterating that the Irish and EEC rules represent two separate laws, despite the near identity in their substantive wordings and the "analogy with Articles 85 and 86 of the Treaty" cited in the long title to the Competition Act. The Act, is the exclusive creation of the Oireachtas which was under no Community obligation to enact it. The Oireachtas chose to follow the Treaty model for our domestic competition rules. Precedents under EEC competition law will obviously be of persuasive value in interpreting the Act but they will not in any way fuse the two codes into one legal order. Article 85.3 Exemptions and National Competition Rules - Views of Commentators It is interesting to note the hesitancy among some of the main commentators in drawing conclusions on this question. The following excerpts give the flavour:

Denis Cagney

j by Denis Cagney, Solicitor*

If your client has a restrictive agreement that comes within the | terms of an EEC Block Exemption Regulation, is he protected from our own Competition Act? Should he notify the Competition Authority? The relationship between EEC and national legislation where these apply concurrently to a given field of activity may at first appear a rather academic concern to the practising solicitor or his client. Where that field is competition policy and the activity comes within a Block Exemption Regulation (individual exemptions are a rare enough animal - particularly in j Ireland) the relationship can become a S very practical concern. In this article I | propose to outline the key elements in this relationship and suggest how I EEC block exemption may, in certain j circumstances, be a useful guide to practical compliance with our Com- I petition Act and may even - dare I say it - reduce the workload of businesses and their legal advisers. But beware, not all the greyness which enshrouds this area will be dispersed.

"In conclusion, it would appear that the position as regards the status and effects of Community exemptions is undecided as to whether all, some or none need necessarily be respected by national law."

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