Exam 21: Regulating the Competitive Environment

During the 1980s,the U.S.Justice Department took the offensive and aggressively enforced American antitrust laws in order to signal to the business community that any transactions that in violation of antitrust laws would be prosecuted.

Consider in what ways the histories of the U.S.,Japan,and Europe may explain their respective laws regarding market competition.

The European Commission has given exemptions in all of the following areas except:

EU competition law applies only to agreements and transactions that:

The European Court of Justice has shown little reluctance to find competition conspiracies between a European subsidiary and its American parent.

The Europeans view the monopoly in a patent as a danger to competition that should be minimized as much as possible.

The Europeans have structured their system to provide for resolution of competition law issues after the transaction has taken place,typically through litigation.

Due to the fact that foreign competition law violations offer few,if any,damage awards,there is very little private litigation.

The European Parliament has criticized the European Commission for its flexible approach in the granting of block exemptions from normal competition rules for vertical agreements.

Through what is called a block exemption,the European Commission grants an automatic competition exemption to a variety of different types of transactions and agreements.

Prohibitions against agreements that restrict competition in the United States by the Justice Department are reviewed in the context of determining such an arrangement would enhance or inhibit a competitive market place.

The substance of many countries' antitrust law is very similar in focusing on two types of activity.The two types of activities are:

The Airtours v.Commissioner of European Communities case involved the question of whether a merger between two members of the oligopoly in the short haul segment of the airline industry would create a "collective dominant" business firm.

In smaller countries,there tends to be a relatively lower tolerance for market domination.

The European Court of Justice has issued a decision giving franchisor-franchisees great flexibility in structuring.

Compare and contrast the approaches of the EU and the U.S.with regard to IPR issues (patents,know-how transfer agreements).

Under the European Commission's block exemption,the parties whose agreements fall under certain exempted categories only have to seek de minimis approval for their transactions to be considered exempt under competition law.

The analytical framework established by American antitrust law distinguishes between actions that are wrong per se and actions to which the rule of reason applies.

In what ways is the U.S."rule of reason" analysis inappropriate and appropriate under EU competition laws?

Antitrust law in the European Union are implemented by the Commission of the European Communities and are known as competition law.