GAZETTE
SEPTEMBER 1993
The Competition Act and
EEC Block Exemptions
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.
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.
(iv) Restrictive arrangements can
qualify automatically (i.e. no need
for prior notification) under
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
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:
"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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