Exclusive Dealings are Anti-competitive: Parable or Realism

By S. Chaitanya Shashank, Subhadeep Ray Choudhary, School of Law, KIIT University

Editor’s Note: Exclusive Dealing agreements are agreements to sell a product on condition that the buyer takes all or effectively all of the requirements of that product from the seller. Such agreements have possible anticompetitive effects, but may also have redeeming efficiencies. To understand completely the ambit of this concept under the Competition Act, there is a need to study the relationship between the modern day economic theory and vertical restraints, as competition law is entirely concerned with the study of markets and markets do not function without the connotations of economics.

EXCLUSIVE DEALERSHIP AGREEMENT: GENERAL AND INDIAN CONTEXT      

Backdrop And Introduction

Competition is “a situation in which people or organizations compete with each other or something that not everyone can have.[i] Although it is not defined in law but is generally understood to mean the process of rivalry to attract more customers or enhance profit. Competition law deals with market failures on account of restrictive business practices in the market. Modern day competition law is generally accepted to have had its foundations in the Sherman Act (1890) and the Clayton Act (1914) both instituted in the United States[ii]. India, since attaining Independence in 1947, for the better part of half a century thereafter, adopted and followed policies comprising what are known as Command-and-Control laws, rules, regulations and executive orders[iii].

The governing legislation in the cosmic field of competition laws in India is the Competition Act of 2002(hereinafter Competition Act) which replaced the Monopolies and Restrictive Trade Practices Act, 1969 The main object of the Act is to shift the focus from curbing monopolies to promoting competition both in domestic and the international field.[iv] The nitty-gritty focus of the Competition Act is to benefit the consumers and prohibit anti-competitive agreements which finds situate in Section 3 of the Competition Act, 2002. This section declares any such agreements to be void. It covers agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision. Further, the Competition Act, 2002 empowers the Competition Commission to enquire and pass orders as it may deem fit in accordance with other provisions of the Act, in relation to agreements referred to in Section 3 which are entered into outside India but having an effect in Competition in India.

KINDS OF VERTICAL RESTRAINTS

The following are the vertical restraints specifically stated as to be considered anti-competitive if they fall under the prescription of the sub-section 4 of Section 3. The explanation to this subsection enshrined under Section 3 gives an inclusive definition of each of the vertical restraints.

  • Tie-In Arrangement: Tying is the practice of a supplier of one product, requiring a buyer also to buy a second product, the tied product.[v] A tie-in arrangement would arise only where the intending purchaser of a product or service is required by the supplier to purchase some other product or service.[vi]
  • Exclusive Supply Agreements: An exclusive supply agreement includes an agreement that restricts the purchaser from acquiring any goods or services from anyone other than the seller or any other person who may be nominated[vii].
  • Exclusive Distribution Agreements: An exclusive distribution agreement includes an agreement that stipulates limiting, restricting or withholding the output or the supply of any goods, or allocating any area or market for the sale of any goods[viii].
  • Refusal To Deal: An agreement providing for refusal to deal includes any agreement that restricts by any method, the persons or classes of persons to whom goods may be sold or from whom the goods may be bought[ix]. There are some circumstances in which a refusal on the part of a dominant firm to supply goods or services can amount to abuse of a dominant position[x].
  • Resale Price Maintenance: Resale price maintenance means the imposition of a condition by a seller fixing the price at which his purchaser may resell the goods. The Competition Act, 2002 prohibits it because it is a clog on the free play of the market forces which alone shall determine the prices at which goods are sold[xi].

EXCLUSIVE DEALING

Exclusive Dealing agreements are agreements to sell a product on the condition that the buyer takes all (or effectively all) of its requirement of that product from the seller[xii]. Such agreements have possible anticompetitive effects, but may also have possible redeeming efficiencies. The major anti-competitive concerns are that such agreements might foreclose enough of the market to rival competition to impair competition. In an oligopolistic market which means the first type of imperfectly competitive market, is a market with only a few sellers each offering a product similar or identical to that of others[xiii] Economists measure a market’s domination by a small number of firms with the statistics called the ‘concentration ratio, which is the percentage of total output in the market supplied by the largest firms in the market.[xiv] In such a market, exclusive dealing agreements might aid oligopolistic coordination by effectively allocating the market, making it difficult to increase market share by decreasing the prices.[xv] Some positive effects of such agreements are, since, they might reduce uncertainty about future sales at the contractually set price it can lower risk-bearing costs or inventory costs, or give firms the contractual commitments they need to invest in expanding their capacity in a way that achieves economies of scale. Exclusive dealership might also encourage relation specific investments between the seller and buyer that increase their efficiency only with each other.[xvi]

POSSIBLE ANTICOMPETITIVE EFFECTS

The major anticompetitive concern is that such agreements might foreclose enough of the market to rival competition to impair competition. Such foreclose might impede rival efficiency, entry, existence or expandability, any of which can anti-competitively increase the power of the foreclosing firm[xvii]. In most industries, there are economies of scale, so that firms can lower their cost, which is called minimum efficient scale[xviii]. Foreclosure can similarly deprive rivals of economies of scope of if without the foreclosure, rival expansion would have enabled them to offer a variety of products that can be more efficiently produced or sold together than separately. Further, even if rivals are able to achieve their minimum efficient scale and scope of production, foreclosure that bars rivals from the most efficient suppliers[xix] or means of distribution[xx] can also impair rival efficiency by increasing their costs. Most of the market can impair rival efficiency by simply slowing down rival expansion even though it does not outright prevent the expansion[xxi]. Similarly foreclosure can take the form of seller- buyer collaboration to exploit downstream buyers by precluding rival competition[xxii].

POSSIBLE REDEEMING EFFICIENCIES

An enterprise or association of enterprises is liable under Section 3, only when, they enter into an agreement relating to production or supply of goods or rendering of services which causes or is likely to cause appreciable adverse effect on competition within in India[xxiii].

Although exclusive dealing agreements can have many possible anticompetitive effects, they also have much possible redeeming efficiency that explains why they are often used even by firms without market power who are not foreclosing a substantial share of any market. Exclusivity avoids this risk while still providing the seller with at least the assurance that the buyer taking it can profitably use.[xxiv] When the buyers are distributors, exclusive dealing might encourage manufacturers to spend on things like advertising that will increase foot traffic to its distributors without fear that customers will be diverted to other brands[xxv].

Another possible efficiency justification might reflect the economies of contracting. Modern economic theory on contracts emphasizes that often the optimal performance that contracting parties want to specify is not verifiable. It means that the parties are confident that the deviations will not be detected and proven in a Court of Law[xxvi].

The common thread in prohibition of “Anti-competitive Agreements[xxvii]as well as “abuse of dominant position[xxviii] is that both seek to sustain competition in the markets and are to be enforced “ex post”.

In short, exclusive dealing can have precompetitive efficiencies. This, the general modern view in antitrust economies is that exclusive dealing agreements have sufficient mixed effects that they should be neither per se illegal nor per se legal. Instead, they should be judged under a rule of reason that weights the likely or actual anticompetitive effects any efficiency justifications[xxix].

EXCLUSIVE DEALERSHIP AGREEMENT AND INDIAN CONTRACT ACT, 1872.

The concept of ‘restraint of trade’ is very famously infamous in the common law as well as in the contract law. ‘Restraint of trade’ receives a bad treatment in law and is considered to be strictly void under section 27 of the Indian Contract Act, 1872. One of the ways in which such restraint can be exercised is by way of entering into any sort of sole dealing agreements whereby the wholesaler or the manufacturer of some goods requires a distributor to distribute his goods only exclusively for certain period of time in return of some remuneration thereby closing a particular channel of distribution for other players in the market. Thus, he gains a better chance of promoting his goods in comparison to other players and that is not a fair game or a fair means of competition.[xxx]

In the leading case of Satyavrata Ghosh v. Kurmee Ram Bangor[xxxi] it was stated that “A contract which has for its object a restraint of trade is, prima facie void”. Under the pretext of Section 27 of Indian Contract Act, 1872 if there exists a contract whether in partial or in general restraint of trade such that every such agreement is void. Section 27[xxxii] of the Contracts Act is general in terms, and declares all agreements in restraint void pro tanto, except in the case specified in the application and unless a particular contract can be distinctly brought within Exception I there is no escape from the prohibition[xxxiii]. A negative covenant, if subsisting during the existence of contract, must not be greater than necessary to protect the interest of employer, nor unduly harsh and oppressive to the employee”[xxxiv]

EXCLUSIVE DEALING IN CONTEXT OF INTELLECTUAL PROPERTY

In the intellectual property context, exclusive dealing occurs when a license prevents the licensee form licensing, selling, distributing, or using competing technologies. Exclusive dealing agreements are evaluated under the rule of reason[xxxv]. In determining whether an exclusive dealing arrangement is likely to reduce competition in a relevant market, the agencies will take into account the extent to which the arrangement:

1)    Promotes the exploitation and development of the licensors technology, and

2) Anti-competitive forecloses the exploitation and development of, or otherwise constraints competition among, competing technologies[xxxvi].

VERTICAL RESTRAINT IN EUROPEAN UNION

Background

The Rome Treaty of 1957[xxxvii] established what is known as the European Union[xxxviii]which currently has 27 Member States. The Rome Treaty was renamed the Treaty on the Functioning of European Union (“TFEU”) by the Lisbon Treaty with effect from 1 December, 2009. The TFEU consists of 358 Articles.[xxxix] EU Competition law is contained in Chapter 1 of Title VII of Part Three, which consists of Articles 101 to 109.[xl] It is necessary to read these provisions in conjunction with the objectives and principles laid down in the TFEU and also the Treaty on European Union (‘TEU’). Article 3(3) provides that one of the EU’s objectives is a highly competitive social market economy.[xli] Much of the EU law is concerned with the elimination of obstacles to the free movement of goods, services, persons and capitals; the removal of these obstacles in itself promotes competition within the Union. The Lisbon Treaty repealed Article 3(1)(g) of the EC Treaty that established as one of the activities of the European Community, the achievement of a system of undistorted competition. Although, in Kornkurrensverket v Telia Sonera Sverige AB[xlii] the Court of Justice referred to Article 3(3) TEU and Protocol 27 on the Internal Market and Competition (annexed to TEU and TFEU), as if it was in no manner different from Article 3(1) (g) EC.

With almost 497 million citizens[xliii], the EU combined generates an estimated 30% of the world’s nominal gross domestic product. At the European summit of 22 and 23 June 2007, in Lisbon, it was greed that both the Treaty on European Union and the Treaty establishing the European Community will be amended by a new Treaty of Lisbon to have most provisions of the European Constitution included. In the EC Treaty, the principal competition rules were set out in the Articles 81 to 89 of the EC Treaty and are positioned in the Part Three, Policy of the Community, Title VI, Common Rules, Chapter 1. They relate to anti-competitive behavior by an enterprise, which has an effect on trade between Member States, and are aimed at preserving and enhancing competition rules by different means.[xliv]

Vertical Restraints And Economics

It is evident that the EC competition policy comprises a delicate balance of multiple objectives. Three Community objectives that promote competition within the Community are central: an open trade free policy, the internal market and an active competition policy.

Credible competition policy requires competition law enforcement: Cartel cases, merger cases, abuse of dominance cases.[xlv] But competition policy is not only about cases. It is about putting in place the condition for companies to deliver better goods and services to the consumers.[xlvi] In European Union, the model or concept of a ‘social market economy’ takes a central position. Article 2(3) of the Treaty of Lisbon reads as ‘The Union shall establish an internal market’. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of environment.[xlvii]

The competition process leads not only to competitiveness and greater economic efficiency, but also to increased social and consumer welfare, which plays an important role in the EU Treaty. The focus on consumer benefit can be evidenced by the wording of the competition rules itself.

Vertical restraints may be explained according to the provisions contained in agreements between a supplier and acquirer of goods and services. The assumption is that the output of the supplier and output of the acquirer are complimentary. Vertical restraints typically restrict the supplier from supplying and the acquirer from acquiring the same or similar goods or services. They also restrict the entering into supply agreements with certain potential acquirers. Similarly, terms that impose minimum, fixed or maximum resale prices and conditions that the acquirer shall resell a minimum or fixed quantity of the acquired goods or shall provide specific services in connection with their resale, constitute vertical restraints. Vertical agreements may arise in a channel of distribution between firms at different levels of trade or industry for ex., between a manufacturer and wholesaler, a supplier and customer or a licensor of technology and his license.

A channel of distribution is the structure of intra-company organization units and extra-company agents and dealers, wholesale and retail, through which a commodity, product, or service is marketed. Channel strategy is one of the most challenging and difficult components of international marketing programs. With larger multinational companies, operating via country subsidiaries, channel strategy is an integral part of the total marketing program and must either fit or be fitted to product design, price and communications aspects of the total marketing program. Smaller companies are often blocked by their inability to establish effective channel arrangements.[xlviii]

The core problem to vertical restraints in the past was the Commission’s adherence to the doctrine of economic freedom. However, this approach had two flaws. First, this approach can be applied to virtually every contract. And secondly under this approach there is no principle which provides a means to distinguish between a benign and an anti-competitive restriction.[xlix] The impact on competition and efficiency of any vertical agreements and distribution system very largely depends very largely on the market context and the barriers to entry.

The impact of the draft Commission Regulation on the application of Article 81(3) of the Treaty on categories of vertical agreements and concerted practices was discussed in Committee X’s sessions at the Business Law International Conference in Barcelona in September 1999. The Commission adopted a new Block Exemption Regulation (BER), Regulation (EC) No. 2790/1999 on December 22, 1999. These regulations covered distribution and supply agreements.

Vertical agreements of the category defined in this Regulation can improve economic efficiency within a chain of distribution or production by facilitating better coordination between the participating undertakings; in particular, they can lead to a reduction in the transaction and distribution costs of the parties and to an optimization of their sales and investment levels.[l]

The Earlier Commission Regulation 4087/88 included a variety of clauses thereby including all the key matters to be included in franchising agreements. A significant factor to be seen while drafting a franchising agreement under the old Regulation was picking up (amending where appropriate) or discarding the clauses contained in the rules provided in the Regulation. The result was that the basic form and contents of all franchising agreements in Europe were dictated by the contents of Regulation 4087/88.[li]

The BER and the guidelines represented a radical change in the treatment of vertical agreements. It was the first important step by the Commission in its comprehensive modernization process towards the so-called more economic based approach. The Commission believed that in the field of competition law economics is an unavoidable companion according to the modern economic thinking.[lii]

It can be presumed that, where the share of the relevant market accounted for by the supplier does not exceed 30%, vertical agreements which do not contain certain types of severely anti-competitive restraints generally lead to an improvement in production or distribution and allow consumers a fair share of the resulting benefits; in the case of vertical agreements containing exclusive supply obligation, it is the market share of the buyer which is relevant in determining the overall effects of such vertical agreements on the market.

ARTICLE 101(3) – TFEU

All the Member States of the EU have systems of competition law, principally modeled on Articles 101 and 102. Some Member States require that domestic law should be interpreted consistently with the EU rules, thereby reinforcing the alignment of EU and domestic laws. Under the regime introduced by Regulation 1/2003[liii] the Commission shares the competence to apply Articles 101 and 102 with national competition authorities (‘NCAs’) and national courts. The NCAs and national courts can also apply the relative domestic laws to agreements or practices, for the application of Article 101 and 102 wherever it is required. In its report on the functioning of Regulation 1/2003 the Commission reported that Article 3(1) had led to a very significant increase in the application of Articles 101 and 102, thereby ‘making a single legal standard a reality on a very large scale’.[liv] Recital 8 of the Regulation 1/2003 states that it is necessary to create a ‘level playing field’ for agreements within the internal market. It means that an agreement prohibited under EU competition law, should be treated in the same manner by an NCA or national court. The national competition law should also be on the same footing and should not be stricter to it; this may be termed as ‘convergence rule’.[lv]

Those agreements which are prohibited by Article 101(1) and do not satisfy Article 101(3) are void ab initio by the virtue of Article 101(2). Article 101(1) prohibits those agreements, decisions by associations of undertakings and concerted practices that are restrictive of competition. Those agreements in particular are prohibited, which fix purchase or selling prices, control the market, keeping one party in an advantageous position, make contracts subject to obligations on other parties which have no connection with the subject of such contract.[lvi] The Treaty does not define an ‘undertaking’. The European Court of Justice held in Hofner and Elser v Macrotron GmbH[lvii] that the concept of an undertaking encompasses every entity engaged in an economic activity regardless of the legal status of the entity and the way in which it is financed.  The fact that an organization lacks a profit-motive or does not have an economic purpose does not in itself mean that an activity is not economic. Activities provided on the basis of ‘solidarity’ or in the exercise of public power are not economic.[lviii] Article 101 does not apply to agreements between two or more legal persons that form a single economic entity: collectively they comprise a single undertaking and there is no agreement between undertakings.

The application of Article 101(3) to agreements, in particular by the Commission, was for many years controversial. In essence the complaint of many commentators was that Article 101(1) was applied to broadly, catching many agreements that were not detrimental to competition at all.[lix] Article 2 of the Regulation 1/2003 confirms well settled case law that burden of proof is on the Commission, the NCAs or the person opposing an agreement in a national court to show that it infringes Article 101(3). The Commission must examine the arguments and evidence put forward by the undertaking relying on Article 101(3). Article 101(3) foreshadowed the advent of block exemptions by providing that the prohibition in Article 101(1) could be declared inapplicable both in relation to agreements and to categories of agreements.

CONCLUSION

To sum up, Section 3 of the Competition Act, 2002 is an inclusive provision which provides for five different kinds of vertical agreements: tie-in agreements, exclusive supply agreements, exclusive distribution agreements, refusal to deal and resale price maintenance. It is immaterial whether the effect of the agreement is anti-competitive in nature; the fact that it is causing or likely to cause an appreciable adverse effect will render the agreement anti-competitive. The laws in EU and US are also on the same plane substantially. But the place where the Indian law is lacking is at the practicality of powers being exercised by the Competition Commission. Of course, the Commission has the power to take suo motu action against enterprises entering into any such agreements, but there have been very few instances where the Commission has taken any such cognizance and acted upon it. Another area where the Indian law is blatantly falling behind is that even while enjoying substantial powers, the investigating officers do not take any strict actions to better the situation.  More often than not, the report submitted by the investigating officer lacks the potency which is required, as there is a lack of efficient human resource to work for it. So no actions are taken due to the materiality which is lacking. It can be concluded that only providing substantive law on a particular field is insufficient, as in reality for the enforcement of anti-competitive laws in any country the procedural laws should also be given equal importance so that together the substantive and procedural laws create a fair competition market with the prime object of consumer welfare.

Edited by Kanchi Kaushik

[i]8th Edition, Oxford Learner’s Advance Dictionary.

[ii]See www.ftc.gov (Last updated Sept. 25, 2013).

[iii]Id.

[iv] See Avtar Singh, Competition Law: Introduction , (1st ed. 2012).

[v]See,Whish & Bailey, COMPETITION LAW: ABUSE OF DOMINANCE, 689 (7th ed. 2012, Oxford University Press).

[vi]T.Ramappa,Competition Law in India: Policy, Issues, and Developments, 101 (2nd ed. Oxford University Press, Delhi).

[vii]Standard Oil Co. of California v. United States, 337 U.S. 293 (1949) “The US Supreme Court held that this requirement under the agreement violated section 3 of the Clayton Act, 1914, as it restricted access for its retailers of other channels of procuring gasoline and petroleum products and that therefore, competition had been foreclosed in a substantial share of the line of commerce.”

[viii]Timken Roller Bearing Co. v. United States, 341 U.S. 593 (1951) the Court found that, under agreements between them, the corporation’s (the appellant corporation, a British corporation and a French corporation), had allocated trade territories among themselves; fixed prices on products of one sold in the territory of the others; cooperated to protect each other’s markets and to eliminate outside competition, and participated in cartels to restrict imports to, and exports from, the United States. The court concluded that appellant had violated the Sherman Act as charged, and entered a comprehensive decree designed to bar future violations.

[ix] The term Refusal in this context includes a constructive refusal, for example by charging unreasonable prices, by imposing unfair trading conditions for the supply in question or by unduly delaying or degrading the supply of the product in questions.

[x]United States v. Parke, Davis & Co., – 362 U.S. 29 (1960), The evidence showing that the defendant had announced a policy of refusing to deal with retailers who failed to observe the defendant’s suggested minimum resale prices or that the defendant would have discontinued direct sales to those retailers who failed to abide by the announced policy, and only permit the retailers to resume purchasing its products after they had indicated willingness to observe the policy which was said to be in violation of the Sherman Act.

[xi]Dr. Miles Medical Co. v. John D. Park & Sons Co, 220 U.S. 373 (1911) , whereby the agreement between Dr. Miles Medical Co. (manufacturer of proprietary medicines) and the wholesale distributing agents, required among other obligations, that the goods were to be sold at not less than prices indicated therein. In the case of retailers, they were not to sell at less than the full retail price as printed on the packages. The wholesalers and retail agents were also prohibited from selling the proprietary medicines at any price to wholesale or retail dealers who were not accredited agents of the Dr. Miles Medical Company.

[xii]Elhauge & Geradin,Global Competition Law And Economics: Vertical Agreement That Restrict Dealing With Rivals, 454 ( Hart Publishing, Oxford and Portland, 2007).

[xiii]Id.

[xiv] See N. Gregory Mankiw, PRINCIPLES OF ECONOMICS, 345 (4th Edition, 2007, Thomson South-Western)

[xv]See,P Bolton and M Dewatripont, Contract Theory, 456( , MIT (MA) 2005).

[xvi]Id.at 458.

[xvii]Id.

[xviii]The anticompetitive effect is not necessarily eliminated if the unforeclosed market can sustain merely one rival, for if one rival exits it would be less likely to undercut monopoly pricing since it knows of will make less profit in the long run if it did. Rather, to avoid this anticompetitive effect, the unforeclosed market must be large enough to susutain the number of rivals at their minimum efficient scale that is sufficient to prevent such coordination.

[xix]Krattenmaker and Salop, ,Anticompetitive Exclusion (1986) 96 Yale LJ, 234;SC Salop and DT Scheffman, Raising Rivals Costs, (1983) 73 Am Econ Rev 267 (Special Issue).

[xx]Le Page’s v 3M, 324 F.3d 141 at 159-60.

[xxi]JE Hodder and YA Illan, “Declining prices and optimality when costs follow an experience curve’ (1986) Managerial & Decision Econ 229; AM Spence, The Learning Curve and Competition, (1981) 12 Bell J Econ 49.

[xxii]Supra note 1.

[xxiii]G.R. Bhatia, Assessment of Dominance : Issues And Challenges Under The Indian Competition Act, 2002,http://www.manupatrafast.com/articles/PopOpenArticle.aspx?ID=8de19f8a-5bbd-42b6-a96a-692a0f376625&txtsearch=Subject:%20Commercial (last updatedSept. 30, 2013).

[xxiv]Id. at 456.

[xxv] H.P. Marvel, Exclsuive Dealing, (1982) 25 JL & Econ 1.

[xxvi]Supra note 15.

[xxvii] § 3 of the Competition Act.

[xxviii] Id at § 4.

[xxix]Supra note 1 at 458- 459.

[xxx]Milap C. Dholakia, Competition Law- Exclusive  Supply Agreements – No Exclusivity  Under  Competition Lawhttp://www.taxmann.com/TaxmannFlashes/flashart16-5-10_1.htm (last updated Nov. 6, 2013).

[xxxi]Satyavrata Ghosh v. Kurmee Ram Bangor,[1954] SCR 310.

[xxxii]See § 27 of The Indian Contract Act, 1872.

[xxxiii]Id.

[xxxiv]Superintendence Company of India v. Krishan, 1980 AIR 1717.

[xxxv]Tampa Electric Co. v Nashville Coal Co, 5 Led 2d 580: 365 US 320 (1960) (evaluating legality of exclusive dealing under S. 1 of the Sherman Act and S.3 of the Clayton Act and evaluating legality of exclusive legality of eclusive dealing under S. 5 of the Federal Trade Commission Act.).

[xxxvi]Avtar Singh, “Competition Law: Prohibition of certain agreements“,21, (1st ed. 2012).

[xxxvii]Treaty establishing the European Coal and Steel Community (Paris, 18 April 1951) had earlier established a special regime for coal and steel which contained provisions dealing specifically with competition; this Treaty expired on 23 July 2002.

[xxxviii] The original name ‘European Economic Community’ was replaced by the ‘European Community’ by the Maastricht Treaty of 1992, which, in turn was subsumed into European Union by the Lisbon Treaty of 2009, 13 December 2007; it follows that references are now to EU, not to EC, competition law.

[xxxix] Kornkurrensverket v Telia Sonera Sverige AB Case C-52/09, [2011] ECR I-000.

[xl]Whish & Bailey, COMPETITION LAW: ABUSE OF DOMINANCE, 50 (7th ed. 2012)).

[xli]Id. at 50.

[xlii] Kornkurrensverket v Telia Sonera Sverige AB Case C-52/09, [2011] ECR I-000.

[xliii]Doris Hildebrand, The Role of Economic Analysis in the EC Competition Rules, 7 (3rded, Kluwer Law International).

[xliv]Id.

[xlv]Neelie Kroes, Being Open About Standards, European Commission for Competition Policy (Open Forum Europe, Brussels, 10th June 2008).

[xlvi]Id.at 7, 8.

[xlvii] Title I, Common Provision Article 3, Treaty on European Union, Consolidated Version of the Treaty on European Union, (2012) Official Journal C 326, 26/10/2012 P. 0001 – 0390.

[xlviii]Id. at 258.

[xlix]Id. at 278.

[l]Supra note 13.

[li] InigoIgartua, How Will the New Vertical Restraints Regulations Affect Franchising?, International Business Lawyer, (2000) Vol. 28 No 4.

[lii]See,Whish & Bailey, COMPETITION LAW: ABUSE OF DOMINANCE, 279 (7th ed. 2012, Oxford University Press).

[liii] Council Regulation (EC) No 1/2003, Official Journal of the European Communities L1/1.

[liv] SEC (2009) 574 ¶ 151, Commission Staff Working Paper, Communication From The Commission To The European Parliament And Council Report on the functioning of Regulation 1/2003.

[lv] See the European Commission’s Guidelines on the application of Article [101(3) TFEU] OJ [2004] C 101/8, ¶ 14.

[lvi] Treaty on the Functioning of European Union, Official Journal of the European Union, C 83/88.

[lvii]Hofner and Elser v Macrotron GmbH Case C-41/90[1991] ECR I-1979, at ¶21 [1993] 4 CMLR 306.

[lviii]Supra note 4, at 86.

[lix]Id. at 114.

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