Articles 101 and 102 of the TFEU

Definition

Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) are legal provisions that govern competition law within the EU. Article 101 prohibits agreements, decisions, and concerted practices that may affect trade between member states and have as their object or effect the prevention, restriction, or distortion of competition. Article 102 addresses the abuse of a dominant market position by one or more undertakings, which can harm competition and consumer welfare. These articles are crucial in maintaining fair competition in the EU market, which is essential for international antitrust enforcement.

5 Must Know Facts For Your Next Test

1. Article 101 covers both horizontal agreements (between competitors) and vertical agreements (between businesses at different levels of the supply chain), targeting anti-competitive practices like price-fixing or market-sharing.
2. Article 102 aims to prevent abuses such as predatory pricing, exclusive dealing, or refusal to supply by dominant companies, which could undermine competition in the market.
3. The enforcement of Articles 101 and 102 is primarily the responsibility of the European Commission, which has the authority to investigate potential violations and impose fines.
4. Fines for breaching Articles 101 or 102 can be substantial, reaching up to 10% of a company’s total global turnover, demonstrating the EU's commitment to maintaining competitive markets.
5. Both articles not only apply to companies based in the EU but also to non-EU companies if their practices affect trade within the EU, emphasizing their international enforcement reach.

Review Questions

• How do Articles 101 and 102 interact with each other in promoting competition within the EU?
  • Articles 101 and 102 complement each other in fostering a competitive environment in the EU. Article 101 targets anti-competitive agreements between businesses that can distort market dynamics, while Article 102 focuses on preventing abuses by firms that hold a dominant position in the market. Together, they create a framework that not only discourages collusion but also addresses inequities stemming from market power, ensuring a level playing field for all competitors.
• Discuss how the enforcement mechanisms for Articles 101 and 102 reflect international standards for antitrust regulation.
  • The enforcement mechanisms for Articles 101 and 102 align with global antitrust principles by prioritizing consumer welfare and competitive markets. The European Commission plays a central role in investigating breaches and imposing penalties, which is similar to practices in jurisdictions like the United States. Additionally, these articles demonstrate a commitment to proactive regulation that prevents anti-competitive behavior before it occurs, mirroring efforts made by other countries to ensure fair competition internationally.
• Evaluate the implications of Articles 101 and 102 on non-EU companies operating within Europe regarding antitrust compliance.
  • Articles 101 and 102 have significant implications for non-EU companies as they must adhere to these regulations when their actions impact trade within the EU. This means that international businesses cannot ignore EU competition laws even if they are not based in Europe. Non-compliance can result in hefty fines and legal challenges, compelling these companies to integrate antitrust compliance into their business strategies globally. This regulatory reach emphasizes the EU's commitment to maintaining fair competition not just locally but on an international scale, influencing how businesses worldwide approach their operations in relation to competition law.

Related terms

Competition Policy: A set of policies and laws aimed at promoting competition and preventing monopolistic practices in markets.

Merger Control: Regulatory processes that assess and approve or reject mergers and acquisitions to prevent anti-competitive market structures.

Antitrust Law: A collection of laws that regulate business practices to promote fair competition for the benefit of consumers.