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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
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Fax: 724486
E^ceCtence in %Sporting since 1954
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