‘Articles 101 and 102 TFEU must be interpreted consistently’: Superleague and the EU system of undistorted competition
In Superleague, the Court held that ‘Articles 101 and 102 TFEU must be interpreted consistently’. It is difficult to claim that this statement is novel or groundbreaking. After all, both provisions are parts of a ‘system ensuring that competition is not distorted’.
It is therefore only natural that the various components of the legal order are construed in the same way: if they were not, there would not even be a system worthy of the name. In this sense, the EU treaties require the consistent interpretation of Articles 101 and 102 TFEU.
This idea may well be evident, but its implications are not discussed particularly often in EU competition law circles. Fortunately, it was addressed at the beginning of the month during the annual conference of the Global Competition Law Centre.
One of the implications that was discussed in Bruges is one that has been touched upon relatively regularly on this blog, which is the fact that some practices are abusive by object under Article 102 TFEU.
This conclusion is apparent not only when one considers the reality of the case law, but as a matter of consistency. If, in a given economic and legal context, a practice is found to restrict competition by its very nature under Article 101(1) TFEU, it would make little (or no) sense to require an analysis of its effects under Article 102 TFEU.
A second implication of the consistent application of Articles 101 and 102 TFEU follows from the first one. ‘By object’ conduct is presumed to be capable of having restrictive effects.
This presumption can be rebutted. This point was made explicit in Murphy (as far as Article 101(1) TFEU is concerned) and Intel (and then Servizio Elettrico Nazionale and Unilever; as far as Article 102 TFEU is concerned).
A third implication relates to the methodology to assess anticompetitive effects. Again, it would make little sense to follow a different approach (or to rely on different benchnmarks) to evaluate the impact of a practice.
In the context of Article 101 TFEU, it is well established that the effects of an agreement must be assessed by reference to the relevant counterfactual (the Court’s judgment in Generics addressed this requirement at some length).
It would be difficult to justify the application of a different methodology under Article 102 TFEU. There are, after all, practices that can be assessed under either Article 101 or 102 TFEU and (as Generics itself shows), in some instances, both provisions can apply together to the same set of facts.
This is a point that was addressed by Advocate General Kokott in her Opinion in Google Shopping. The Opinion identified an erroneous interpretation of Article 102 TFEU in the first-instance judgment (see para 172).
The General Court, Advocate General Kokott explained, incorrectly conflated the temporal dimension of the analysis (actual vs potential effects) and the issue of the counterfactual. This is so insofar as the first-instance judgment claimed that assessing anticompetitive effects against the counterfactual is tantamount to requiring evidence of actual effects.
Advocate General Kokott, by contrast, did not question, generally speaking, the relevance of the counterfactual when assessing effects under Article 102 TFEU.
She simply noted (wholly uncontroversially) that Google’s argument artificially focused on one aspect of the analysis and was therefore incapable of substantiating the claim that the General Court had erred in law.
A fourth implication has to do with the very meaning of the notion of effect. Landmark Article 101 TFEU rulings such as Delimitis make it clear that a restrictive effect is more than a competitive disadvantage and more than a limitation of a firm’s freedom of action.
As already suggested, it would be very difficult to justify construing the notion of effect differently under Article 102 TFEU (by arguing, for instance, that a mere competitive disadvantage is sufficient to trigger the prohibition).
A fifth implication is one that captures well the central idea behind this entry. The Court has repeatedly held that, in an Article 102 TFEU case, a dominant firm can show that the efficiency gains resulting from a practice outweigh any actual or potential anticompetitive effects.
This possibility is not supported by the letter of Article 102 TFEU, but makes perfect sense if one considers that it mirrors Article 101(3) TFEU, thereby suggesting, in line with the above, the idea that both provisions, which are part of the same system, must be interpreted consistently.
Chillin'Competition 
Dear Pablo,
You seem to understand “consistently” as “equally”. I do not think it follows from the requirement to apply Articles 101 and 102 consistently with each other that they should be applied equally, for instance with regard to the assessment of anti-competitive effects. There are at least two differences between the scope of both provisions which justify, if not mandate, differentiated assessment.
First, Article 102 obviously requires a dominant position, which implies that competition in such a situation is already weakened (and this is a legal assumption with legal consequences, as we know from Hoffmann – La Roche, Post Danmark II, etc). Not so, of course, for Article 101, which means that this provision applies to conduct by undertakings with substantially less (collective) market power. One and the same type of conduct surely could have different effects, and could even be presumed to have different effects, depending on the degree of market power of the undertaking(s).
Second, as soon as dominance has been established under Article 102, there is a special responsibility not to further weaken competition. There is no such obligation under Article 101. This may also affect the threshold for establishing liability under the respective provisions.
In both cases, my phrasing is cautious (“could have”, “may”). Your claims, however, are very strong ones (“it would make little sense to follow a different approach”, “it would be very difficult to justify”, etc) and I read your post as saying that there is no reason to apply the tests for finding (potential) anti-competitive effects under Articles 101 and 102 differently. Therefore, any meaningful material difference between situations under Articles 101 and 102 respectively will challenge the merits of your claim. Since I think these two points are indeed meaningful differences, it does not follow from the “consistency” requirement that anti-competitive effects should be assessed equally in both provisions.
Best wishes,
Justin
Justin Lindeboom
29 March 2024 at 3:54 am
Thanks, as always, for your very thoughtful comment. It is always great to get your views.
My impression is that you are missing a key piece of the puzzle in your analysis. It implicitly assumes that Articles 101 and 102 TFEU have distinct spheres of application, where they do not.
As the case law of recent years shows, the two provisions can apply, either alternatively or cumulatively, to the same set of facts. Superleague, Generics and Van den Bergh Foods come to mind.
What are the implications? That Article 101 TFEU can apply to agreements involving a dominant undertaking (which, as you rightly point out, has a special responsibility) and thus in an economic and legal context where the conditions of competition are significantly weakened.
In spite of this fact, it would still be necessary to, among others, establish the effects against the relevant counterfactual, or to conduct an evaluation of the restrictive impact of the agreement on competition. The need to evaluate the effects against the counterfactual in an Article 101 TFEU case does not disappear merely because one of the parties to the agreement is dominant.
As a result, the inconsistent interpretation of both provisions would lead to outcomes that would be difficult to justify both in theory and in practice. This point became dramatically apparent in cases Van den Bergh Foods. It is not a surprise that, when confronted with the cumulative application of Articles 101 and 102 TFEU in Superleague, the Court of Justice sought to avoid such outcomes.
Pablo Ibanez Colomo
29 March 2024 at 8:01 am
Dear Pablo,
Thank you for your response. I did not assume, however, that Articles 101 and 102 necessarily have distinct spheres of application. My point is that in a situation where both provisions are applicable, the analysis is not necessarily the same and there is no need for them to be the same.
You write that “[t]he need to evaluate the effects against the counterfactual in an Article 101 TFEU case does not disappear merely because one of the parties to the agreement is dominant.”
But this is not the point at all and I nowhere suggested that the analysis under Article 101 as such would differ depending on whether one of the undertakings has a dominant position.
My point is that in such a situation, Article 102 would also apply and the fact that there is a need to scrutinise the counterfactual under Article 101 does not imply that you also need to scrutinise the counterfactual under Article 102. There is nothing inconsistent or even incoherent about the conclusion that the same conduct, if done by a dominant undertaking, can violate Article 102 but not Article 101 (neither do I find it difficult to justify in view of the differences that I mentioned before). They are distinct provisions with distinct terms and accompanying doctrine.
Best wishes,
Justin
Justin Lindeboom
30 March 2024 at 2:31 pm
Thanks so much for clarifying your point.
What I find particularly intriguing about your perspective is that a dominant undertaking would not have any less of a special responsibility (and the conditions of competition would not be any less weakened) where the behaviour is examined under Article 101 TFEU.
In other words: the factors which, you suggest, could justify a different treatment under Article 102 TFEU may also be at play under Article 101 TFEU. Which is what warrants the application of a common analytical framework (that is, the very idea at which the Court hints in Superleague).
The idea that the outcome of a case (same facts, same economic and legal context) depends on whether it is examined under one provision or the other is one that I would always find difficult to justify (and, indeed, explain to my students). I am therefore not surprised by the Court’s stance.
The same is true, by the way, of merger control (another component of the system of undistorted competition). Merger cases routinely involve dominant undertakings. I struggle to see what would justify examining differently tying conduct under, respectively, Article 102 TFEU and Regulation 139/2004.
Pablo Ibanez Colomo
30 March 2024 at 2:58 pm
Hi Pablo,
Great post as always.
I agree with you that the case law suggests that fundamental concepts (e.g. procompetitive, anticompetitive effects) should be interpreted consistently across the board regardless of the existence of different legal tests or techniques to establish legal outcomes. In this vein, I agree that the case law suggests that by-object abuses exist and that the term refers to practices at least capable of having anticompetitive effects (as per Intel but even earlier e.g. Michelin II, 241). Would you consider that the absence of any plausible procompetitive explanation is the litmus test for establishing this type of abuse (as in case of restrictions by object under Art. 101 – a point made clear especially in Generics)? Would you also consider naked restraints (e.g. Intel) as a subcateogry of by-object abuses?
I am also wondering what do you make of the argumentation developed here according to which “the alleged presence of an ‘object’ and ‘effect’ dichotomy under Article 102’ is a ‘crucial legal misconception’. If for instance Art 102 is interpreted as solely and exclusively prohibiting dominant undertakings from adopting pricing practices which have an exclusionary effect on its equally efficient actual or potential competitors (Telia Sonera, Post Danmark I) then this reading of the case law would be correct. But the Court interject an ‘inter alia’ which in my view allows for other tests (e.g. structual effects analysis or a less efficient competitor test).
The implication of prof. Akman’s interpretation though would be that the CoJ ‘can reformulate its jurisprudence to adopt and endorse a more (or less) effects-based approach’. In my view the restriction-by-object category is not necessarily formalistic (as implied in the article) and also not at all incompratible with an effects based approach. On the contrary it seems to me that having (and further developing) by-object abuses would alsoo be in line with what can be a ‘workable and dynamic effects based approach'(to use the Commission’s vocabulary).
Very interested in your views!
Kind regards,
Stavros
Stavros Makris
8 April 2024 at 11:29 am
Thanks, Stavros, as ever, for enriching the conversation.
These are great points, and it looks like we agree across the board.
First, in the need to have a common overarching framework to Articles 101 and 102 TFEU. In the absence of such a framework, the meaning of the concepts ‘restriction’ and even ‘competition’ would vary depending on the applicable provisions.
Second, we seem to agree re the reality of the case law. As you know well, I am interested in the positive analysis of the law. From a positive perspective, as you rightly point out, the existence of a ‘by object’ category of abusive practices is unquestionable (and necessary for consistency purposes). If anything, the Court has been more explicit about it in recent years.
Third (and really important), ‘by object’ does not equal formalism (and/or the adoption of a ‘form-based approach’), and certainly not in the case law of the Court, as I explained here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4570358
Pablo Ibanez Colomo
8 April 2024 at 11:36 am