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Review Test Submission: Test & Feedback - Unit 01 (a1314)H

Review Test Submission: Test & Feedback - Unit 01(a1314)

User Shaun LAWLER

Course LL.M LPC - Stage 2 - Part Time Evening - International Competition/Anti-Trust Law andPractice, 2012/15 - L6ATP01-A

Test Test & Feedback - Unit 01 (a1314)

Started 16/03/14 16:53

Submitted 16/03/14 16:58

Status Completed

Score 9 out of 10 points

TimeElapsed

5 minutes.

Instructions Answer the following questions

Question 1

Match the following institutions to the correct jurisdiction.

Question Correct Match Selected Match

Office of Fair Trading B.

United Kingdom

B.

United Kingdom

Federal Trade Commission C.

United States of America

C.


European Commission A.

European Union

A.

European Union

Sectoral Regulators B.

United Kingdom

B.

United Kingdom

Department of Justice C.


C.


ResponseFeedback:

Well done. The institutions considered here are some of the main bodieswithin the European Union, the United Kingdom and the United States.(Note that the CMA is expected to take over the competition functions ofthe OFT in April 2014.)

Question 2

Match the following legislation to the correct legal system.


The Sherman Act A.

US law

A.

US law

Articles 101 and 102 C.

EU and UK law

C.

EU and UK law

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http://elite.law.ac.uk/webapps/blackboard/execute/courseMain?course_id=_69818285_1

The Competition Act B.

UK law only

B.

UK law only

The Clayton Act A.

US law

A.

US law

The Enterprise Act B.

UK law only

B.

UK law only

ResponseFeedback:

Well done. In this context, Articles 101 and 102 are both EU and UKlegislation (as the Treaty articles form part of UK law). However, the reverseis not true. UK legislation can only be used in the UK.

Question 3

Infringement decisions made by the Office of Fair Trading under UK/Europeancompetition rules can be appealed (in the first instance) to which ONE of the followinginsitutions?

Selected Answer:

D. The Competition Appeal Tribunal

Correct Answer:

D. The Competition Appeal Tribunal

ResponseFeedback:

Well done. As with some other areas of law, competition law has aspecialist court which deals with substantive appeals, the CompetitionAppeal Tribunal. Further appeals can be made to the Court of Appeal andbeyond. The General Court is part of the CJEU.

Question 4

Is the following statement TRUE or FALSE?

'The Office of Fair Trading, the European Commission and the Department of Justice allhave powers to impose criminal sanctions on parties which breach competition rules.'

Selected Answer: True

Correct Answer: False

ResponseFeedback:

Sorry, but that's incorrect. The European Commission cannot imposecriminal sanctions. The Office of Fair Trading has powers to imposecriminal sanctions for breaches of UK and European rules. The Departmentof Justice is the only body under the US system with powers to imposecriminal sanctions.

Question 5

Bigdeal Limited is looking at ways in which it can maintain and develop its customerbase. Which ONE or MORE of the following strategies can Bigdeal Limited employ toensure that customers come to it rather than to its competitors?

Selected Answers:

Offer cheaper prices.

Produce new and innovative products.

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Offer excellent customer service.

Offer a combination of the strategies outlined above.

Correct Answers:

Offer cheaper prices.

Produce new and innovative products.

Offer excellent customer service.

Offer a combination of the strategies outlined above.

ResponseFeedback:

Well done. Bigdeal Limited can decide to initiate any of the strategies,either in isolation, or in combination. Although price competition isimportant, it should be remembered that it is not the only way in which acompany can compete.

Question 6

Complete the following sentence by selecting ONE correct option:In general terms, the wider a relevant market is defined, the market share of individualoperators on that market will:

Selected Answer:

B. Decease

Correct Answer:

B. Decease

ResponseFeedback:

Well done. There is a direct relationship between the relevant market andmarket share. Generally, the wider the market is drawn, the lower marketshare figures will be.

Question 7

Complete the following sentence by selecting ONE correct option:In general terms, the narrower the relevant market is defined, the market share ofindividual operators on that market will:

Selected Answer:

A. Increase

Correct Answer:

A. Increase

ResponseFeedback:

Well done. Again this demonstrates the relationship between relevantmarket and market share. It also underlines the importance of establishingthe correct relevant market.

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Question 8

Fill in the missing blanks to complete the following sentence.

From an economic perspective markets are divided into two elements. First, the [X] sidewhich describes the supply of products to the market, and secondly, the [Y] side whichdescribes the purchase of products from the market.

Specified Answer for: X supply

Specified Answer for: Y demand

Correct Answers for: X

Evaluation Method Correct Answer Case Sensitivity

Exact Match supply

Exact Match Supply

Correct Answers for: Y


Exact Match demand

Exact Match Demand

ResponseFeedback:

Well done. Economists will often refer to the supply and demand sides of amarket. Given competition law's close relationship to economics, it is essentialthat lawyers understand these basic economic principles.

Question 9

When establishing the correct relevant market the competition authorities will sometimesuse the 'SSNIP' test. What does SSNIP stand for? Choose from ONE of the following.

Selected Answer:

C. Small but significant non-transitory increase in price.

Correct Answer:

C. Small but significant non-transitory increase in price.

ResponseFeedback:

Well done. The SSNIP test is one of the main ways in which competitionauthorities establish both the relevant product and geographic markets.

Question 10


'The European Competition Network (ECN) is concerned with matters that arise betweenthe European Commission and the US competition authorities, such as the Departmentof Justice.'

Selected Answer: False


ResponseFeedback:

Well done. The ECN concerns the relationship between the EuropeanCommission and the competition authorities within the various MemberStates of the European Union. As such one of the primary objectives of theECN is to ensure the uniform application of European competition rules.

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Friday, 30 May 2014 11:48:58 o'clock BST

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User Shaun LAWLER



Started 23/03/14 12:27

Submitted 23/03/14 12:38

Status Completed


TimeElapsed

11 minutes.

Instructions Attempt the following questions

Question 1

What is the main difference between the Chapter I prohibition in the Competition Act1998 and Article 101(1)? Choose from ONE of the following.

SelectedAnswer:

A. The Chapter I prohibition applies to agreements and the otherarrangements that it describes if they may affect trade within the UK whereasArticle 101(1) applies to agreements and other arrangements only if theymay affect trade between EU Member States.

CorrectAnswer:

A. The Chapter I prohibition applies to agreements and the otherarrangements that it describes if they may affect trade within the UK whereasArticle 101(1) applies to agreements and other arrangements only if theymay affect trade between EU Member States.

ResponseFeedback:

Well done - the only significant difference between the two is thatArticle 101(1) can apply only if the arrangement may affect trade betweenEU Member States. The Chapter I prohibition applies where the effect is ontrade within the UK. The other statements are untrue. The Chapter Iprohibition can apply to concerted practices and Article 101(1) applieswhere the prevention, restriction or distortion of competition is the effect ofthe arrangement even if it is not the parties' object.

Question 2

Bigdeal Limited (Bigdeal) is keen to ensure that the price at which customers buy itsproducts is kept at a controlled level. In this regard, Bigdeal orders its wholly owned retailoutlets situated all over Europe to charge a common price. Due to this pricing policycustomers cannot obtain the product cheaper by shopping around, as the price is thesame at each outlet.

Bigdeal's pricing policy breaches Article 101(1). Is this statement TRUE or FALSE?

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ResponseFeedback:

Well done. For there to be a breach of Article 101(1) there has to be anagreement between undertakings. As the retail outlets are wholly owned byBigdeal and therefore form part of the same economic entity, although thereis an agreement, it is not 'between undertakings' for the purposes of Article101(1).

Question 3

Your client is proposing to buy another company by purchasing its entire share capital.During the due diligence process it becomes clear that the target has engaged in seriousanti-competitive behaviour. In an attempt to avoid any future liability relating to thisbehaviour, which ONE or MORE of the following commercial strategies could your clientadopt?

SelectedAnswers:

A. Walk away from the deal.

B. Insist on extensive warranties which can be called on in the event that afine is imposed.

CorrectAnswers:

A. Walk away from the deal.

B. Insist on extensive warranties which can be called on in the event that afine is imposed.

C. Abandon the share purchase and instead enter into an asset purchasearrangement for the elements of the target in which it is interested.

ResponseFeedback:

That's incorrect. Your client can use any of these commercial strategies toavoid a fine being imposed on it. In this scenario the client can (1) simplyrefuse to do any deal - walk away, (2) do the same deal but make sure it isprotected as much as possible - warranties, or (3) do another type of dealthat removes the potential liability - asset purchase.

Question 4

For the purposes of Article 101(1) what is the main difference between an 'objects'infringment and an 'effects' infringement? Choose from ONE of the following options.

SelectedAnswer:

B. The authorities do not have to prove that there was an impact oncompetition when considering an objects infringement. For effectsinfringements, the authorities have to establish that there was an appreciableeffect on competition.

CorrectAnswer:

B. The authorities do not have to prove that there was an impact on

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competition when considering an objects infringement. For effectsinfringements, the authorities have to establish that there was an appreciableeffect on competition.

ResponseFeedback:

Well done. As you correctly note the main difference between the twobroad categories of infringement is the evidential burden placed on theinvestigating authority.

Although certain types of anti-competitive behaviour are more likely to belabelled as 'object' rather than 'effect', there is no prescribed list. Listsoutlining the types of behaviour that can fall within 'object' or 'effect' are onlyindicative and investigatory bodies are not bound by them.

Finally, although objects infringements will generally attract the mostserious sanctions, there is no allocation of sanction to a particular type ofinfringement.

Question 5

Assume that you are advising a client about a distribution agreement which may containa possible breach of the competition rules. Given the geographic impact of theinfringement, you are not sure whether the infringement will be dealt with under UKcompetition rules, or under both UK and EU competition rules. In order to establishwhich set of rules will apply, which ONE of the following guidance notes would youconsult?

Selected Answer:

C. The Effect on Trade Guidelines

Correct Answer:

C. The Effect on Trade Guidelines

ResponseFeedback:

Well done. In order for European competition rules to apply, there has to bean effect on trade between Member States. Without such an effect EUrules cannot apply, although national competition rules may still beapplicable.

Question 6

Leading from the previous question, assume that you have concluded that the distributionarrangement does contain anti-competitive elements and falls under UK rules (inparticular the Chapter I prohibition contained in the Competition Act 1998). You want tosee if there is any way in which the arrangement can benefit from any of the availableexemptions or exclusions outlined below. In what order would you conduct youranalysis?

Correct Answer Selected Answer

1.Notice on Agreements of MinorImportance (NAOMI) 1.

Notice on Agreements of MinorImportance (NAOMI)

2.Vertical Restraints Block Exemption


3.Individual Exemption under s. 9Competition Act 1998 3.

Individual Exemption under s. 9Competition Act 1998

ResponseFeedback:

Well done. The first place to start would be with NAOMI, which can also beused under the UK system. If NAOMI cannot be used (possibly the marketshares of the parties are too high) then the Block Exemption should beconsidered as the market share thresholds are higher; an agreement is

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exempt from the Chapter I prohibition if it does not affect trade betweenMember States but otherwise falls within a category of agreement which isexempted by the Block Exemption.Finally, if neither NAOMI or the Block Exemption can be used (usually dueto high market share or the fact that the arrangement contains hard-corerestrictions), the final option is to see if it can benefit from individualexemption.

Question 7

In order for a party to rely on the individual exemption contained in Article 101(3), whichONE or MORE of the following factors must be satisfied?

SelectedAnswers:

A.

The agreement must contribute to an improvement in the production ordistribution of goods or the promotion of technical or economic progress.

B.

Consumers must get a fair share of any resulting benefit.

C.

The agreement does not impose on the undertakings restrictions which arenot indispensable.

D.

The agreement will not afford the undertakings the possibility of substantiallyeliminating competition.

CorrectAnswers:

A.

The agreement must contribute to an improvement in the production ordistribution of goods or the promotion of technical or economic progress.

B.

Consumers must get a fair share of any resulting benefit.

C.

The agreement does not impose on the undertakings restrictions which arenot indispensable.

D.

The agreement will not afford the undertakings the possibility of substantiallyeliminating competition.

ResponseFeedback:

Well done. Article 101(3) contains a cumlative test whereby all fourelements must be established.

Question 8

The primary US prohibition relating to anti-competitive agreements is contained in s.1 ofthe _______________.

Selected Answer: sherman act

Correct Answer:


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Exact Match Sherman Act 1890

Exact Match Sherman Act

Exact Match sherman act 1890

Exact Match sherman act

Exact Match Sherman act

Exact Match Sherman act 1890

Response Feedback: Well done.

Question 9


'The US system, although different in detail is very similar to the European systemregulating anti-competitive behaviour. For example, hard-core restrictions are alsocapable of being exempted under US rules similar to those contained in Article 101(3)'.



ResponseFeedback:

That's incorrect. Under the US system certain activities are identifiedas 'per se' violations. These violations cannot be justified under anycircumstance. This differs significantly from the position under theEuropean system. Article 101(3) provides for the possibility of even seriousanti-competitive behaviour to be exempted in limited circumstances - thispossibility simply does not exist under the US system.

Question 10

Although a very small category of infringements will be considered as 'per se' violations,the vast majority of US cases will concern an examination of the purpose and applicationof the arrangement, and in particular, the balancing of its pro and anti-competitive effects.What is this analysis commonly referred to? Choose from ONE of the following options.

Selected Answer:

D. The Rule of Reason.

Correct Answer:

D. The Rule of Reason.

ResponseFeedback:

Well done. The Rule of Reason is used in the vast majority of US anti-trust investigations.

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User Shaun LAWLER



Started 30/03/14 20:43

Submitted 30/03/14 20:52

Status Completed


TimeElapsed

8 minutes.


Question 1

Is the following statement TRUE or FALSE?'A company has to deal with rules relating toanti-competitive agreements or rules relating to abuse of market power, but not both.'



ResponseFeedback:

Well done. Companies with market power have to comply with bothsets of rules.

Question 2

Which ONE or MORE of the following factors may be taken into considerationwhen assessing whether an undertaking is dominant for the purposes of Article 102?

Selected Answers:

A. Market share

B. Barriers to entry

C. Period over which the undertaking has been dominant

D. Financial resources of the undertaking

Correct Answers:

A. Market share

B. Barriers to entry

?

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C. Period over which the undertaking has been dominant

D. Financial resources of the undertaking

ResponseFeedback:

Well done. All of the above factors could be taken into consideration.Although some factors may play a greater role in establishing dominance -for example market share - it will not be the only factor.

Question 3

Which ONE of the following four statements correctly reflects the relationship betweenmarket share and dominance for the purpose of Article 102?

SelectedAnswer:

C.

'There is a presumption of dominance where the market share of anundertaking is over 50%. It is unlikley that an undertaking will hold adominant position where its market share is below 40%.'

CorrectAnswer:

C.

'There is a presumption of dominance where the market share of anundertaking is over 50%. It is unlikley that an undertaking will hold adominant position where its market share is below 40%.'

ResponseFeedback:

Well done, C was the correct statement. Market share figures set up anumber of presumptions which are capable of being rebutted.

Question 4

Complete the following sentence by filling in the missing blanks.In order for the competition authorities to impose liability under Article 102 they have toestablish both [X] and [Y].

Specified Answer for: X dominance

Specified Answer for: Y abuse



Exact Match abuse

Exact Match Abuse

Exact Match Dominance

Exact Match dominance



Exact Match abuse

Exact Match Abuse

Exact Match Dominance

Exact Match dominance

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ResponseFeedback:

Well done. Both dominance and abuse have to be established before liabilitycan be imposed under Article 102.

Question 5

Megacorp has suffered a slowdown in sales of widgets (in which it is dominant) due to adifficult trading environment. It is very keen to reverse this slide and in order to boostsales has decided to retail its products at below cost price.Which ONE of the following describes Megacorp's strategy?

SelectedAnswer:

D.

Megacorp's strategy amounts to predatory pricing which is an abuse forthe purposes of Article 102.

CorrectAnswer:

D.

Megacorp's strategy amounts to predatory pricing which is an abuse forthe purposes of Article 102.

ResponseFeedback:

Well done. You correctly indentified the infringement as predatory pricing.Note that there is no question of Megacorp's behaviour being excused justbecause it is operating in difficult financial conditions.

Question 6

Leading on from Question 5, Megacorp is looking to reduce its stock levels. In thisregard it has identified that it holds a huge stock of Product X (this product has neverbeen very successful). In order to reduce its stock of Product X, it introduces a newpolicy which requires customers to purchase Product X whenever they order Product AB(in which it is dominant) from the company.Which ONE of the following describes Megacorp's strategy?

SelectedAnswers:

C.

Megacorp's strategy amounts to tying which is an abuse for thepurposes of Article 102.

CorrectAnswers:

C.

Megacorp's strategy amounts to tying which is an abuse for thepurposes of Article 102.

ResponseFeedback:

Well done. Megacorp's strategy amounts to tying. It is an abuse for adominant firm to make the supply of one product in which it is dominantconditional on the purchase of another.

Question 7

Leading on from Questions 5 and 6, Megacorp is also looking at its credit controlsystems and ensuring that all creditors pay on time. In this regard, it has identifiedMinicorp Limited (Minicorp), which has failed to pay an invoice by the required date.Minicorp has subsequently ordered more of the products, but Megacorp is refusing toship any more products until Minicorp pays the outstanding invoice.Which ONE of the following describes Megacorp's strategy?

Selected B.

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Answers: There is no infringement as Megacorp has objective justification fordoing this.

CorrectAnswers:

B.

There is no infringement as Megacorp has objective justification fordoing this.

ResponseFeedback:

Well done. Although the actions of Megacorp could amount to a refusal tosupply, this potential abuse (as with other potential abuses) may becapable of objective justification. Here the failure by Minicorp to pay theinvoice would give Megacorp objective justification in refusing to supply anymore products.

Question 8

Is the following statement TRUE or FALSE'As long as there is an infringement of section 2 of the Sherman Act, there will also be aninfringement of Article 102.'



ResponseFeedback:

That's incorrect. Although s.2 Sherman Act and Article 102 deal withabuses of market power, they are not identical. For example, under theSherman Act market power may be established by referrence to highermarket share thresholds than those applicable to Article 102. Accordingly,an undertaking may be held to have market power under the Europeanrules but not under the US rules.

Question 9

Which ONE of the following four statements correctly describes the relationship betweenmarket share and monopoly power for the purposes of s.2 Sherman Act?

SelectedAnswer:

D.

'A market share in excess of 70% will give rise to a presumption of monopolypower. A market share below 50% is unlikely to give rise to a finding ofmonopoly power.'

CorrectAnswer:

D.

'A market share in excess of 70% will give rise to a presumption of monopolypower. A market share below 50% is unlikely to give rise to a finding ofmonopoly power.'

ResponseFeedback:

Well done. The US market share thresholds for monopoly power are higherthan those for dominance under Article 102. The US thresholds are notconclusive regarding monopoly power but give rise to presumptions (whichare capable of being rebutted).

Question 10


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'Section 2 Sherman Act differs from Article 102 in that a company can be in breach evenwhere it has yet to obtain market power.'


Correct Answer: True

ResponseFeedback:

Well done. Under s.2 Sherman Act it is an infringement to attempt orconspire to monopolise. Accordingly, a company that does not yet enjoymarket power (or monopoly power) can be in breach under section 2. Thereis no corresponding infringement under Article 102.

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User Shaun LAWLER



Started 23/04/14 09:31

Submitted 23/04/14 09:38

Status Completed


TimeElapsed

6 minutes.


Question 1

Assume that Bigco Limited has been engaged in a serious price fixing cartel (whichinvolved senior employees and directors). The cartel has been investigated andsuccessfully prosecuted by the European Commission (Commission) under Article 101.Which ONE or MORE of the following steps can potentially be taken by theCommission?

Selected Answers: A.

A fine imposed on the company.

D.

Order to cease and desist.

Correct Answers: A.


D.


ResponseFeedback:

Well done. The Commission only has powers to impose fines on thecompany and to order the company to cease and desist in anti-competitivebehaviour.

Question 2

Assume that, instead of the Commission investigating and prosecuting Bigco Limited'santi-competitive conduct, this was done by the Office of Fair Trading (OFT) again usingArticle 101.Which ONE or MORE of the following steps can potentially be taken by the OFT?

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SelectedAnswers:

A.


B.

Application to court for the disqualification of the directors involved.

C.

Criminal prosecution for the individuals involved leading to fine and/orimprisonment.

D.


CorrectAnswers:

A.


B.

Application to court for the disqualification of the directors involved.

C.

Criminal prosecution for the individuals involved leading to fine and/orimprisonment.

D.


ResponseFeedback:

Well done. Although the OFT is using the same legislative base in Article101, it has a much wider range of penalties that it can impose. Thisdemonstrates that the powers of the OFT are derived from national law notEuropean legislation.

Question 3

In the context of a leniency application, what is a 'marker'?Choose from ONE of the following descriptions.

SelectedAnswer:

D. It is the ability of a leniency applicant to ensure the priority of theirapplication.

CorrectAnswer:

D. It is the ability of a leniency applicant to ensure the priority of theirapplication.

ResponseFeedback:

Well done. A 'marker' system is used in many leniency programmes. Themarker system encourages applicants to come forward even where they donot have sufficient information to make a full application. If the applicant cansupply all relevant information required by the time stipulated by therelevant competition authority then the marker will be perfected. In thiscase the application will deemed to have been made at the time the markerwas granted and not the time all relevant information was subsequentlysupplied. The use of a 'marker' is very useful as it encourages even earlierapplications.

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Question 4

Is the following statement TRUE or FALSE?'If a company is fined by the OFT under European rules, it will not be fined for the sameanti-competitive conduct under UK rules.'



ResponseFeedback:

That's incorrect. Although the OFT can use European rules (Articles101/102) and/or UK rules (the Chapter I and II prohibitions) to investigateand prosecute an infringement it will not fine twice for the same conduct.

Question 5

The following terms relate to either the EU, UK or US leniency programmes. Match thefollowing terms to the correct competition authority responsible for that leniencyprogramme.


Type A immunity B.

Office of Fair Trading

B.


Corporate Leniency Program A.

Department of Justice

A.


Penalty plus A.


A.


No-action letter B.


B.


Significant added value C.

European Commission

C.

European Commission

ResponseFeedback:

Well done. Although most competition authorities now have leniencyprogrammes, these programmes can be very different and will containdifferent rules and their own terminology.

Question 6

Fill in the blanks to complete the following sentence.

The Commission and the OFT have powers to fine an undertaking up to 10% of its [X][Y].

Specified Answer for: X annual

Specified Answer for: Y turnover



Exact Match worldwide

Exact Match Worldwide

Exact Match world wide

Exact Match World wide

Exact Match world-wide

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Exact Match World-wide



Exact Match turnover

Exact Match Turnover

Exact Match turn over

Exact Match Turn over

Exact Match turn-over

Exact Match Turn-over

ResponseFeedback:

That's incorrect. The Commission and OFT can fine up to 10% of worldwideturnover. Given that this upper limit is based on turnover and not profit this can,and often does, result in huge fines being imposed.

Question 7

Under which ONE of the following procedures can the Commission reduce the fineimposed on a party by 10%?

Selected Answer:

A. The settlement procedure

Correct Answer:

A. The settlement procedure

ResponseFeedback:

Well done. The settlement procedure can result in a 10% reduction.Commitments and interim measures although widely used, are not directlyrelated to fining levels.

Question 8

You receive an urgent phone call from one of your clients, a director of a major Plc. Hetells you that officials from the Commission are at his home address and require accessin order to search for information relating to an investigation under Aricle 101.He is furious and is refusing to allow the officials saying that as this is his privateaddress and that the Commission has no right to search his home.

Is it TRUE or FALSE that the Commission can search a private address?



ResponseFeedback:

Well done. Under the Modernisation Regulation the Commission does havepowers to raid the home address of a director, manager or other member ofstaff of an undertaking under investigation.

Question 9

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The OFT has wide ranging power in order to investigate alleged infringements of thecompetition rules. Which ONE or MORE of the following powers does the OFT have inregard to an investigation initiated under the Competition Act 1998?


The use of informants.

B.

Obtaining information about telephone numbers contacted.

C.

Installation of bugging devices.

D.

Direct surveillance, such as watching an office or other premises.

Correct Answers: A.

The use of informants.

D.

Direct surveillance, such as watching an office or other premises.

ResponseFeedback:

That's incorrect. Although the OFT does have wide ranging powers, not allof the powers can be used in the context of a civil investigation under theCompetition Act 1998. The remaining two investigatory powers outlinedhere can only be used in the context of a criminal investigation initiatedunder the Enterprise Act 2002.

Question 10

In regard to third party damages actions for the breach of competition rules, why wouldany client be particular keen to avoid being sued in the United States?

Selected Answer:

B. Under the US system, courts can award treble damages.

Correct Answer:

B. Under the US system, courts can award treble damages.

ResponseFeedback:

Well done. The main problem with being sued in the US is the ability of thecourts to award treble damages. With regard to costs, please note thatparties generally bear their own costs under the US system. Finally, theUS system is no more complex than the European/UK system, nor does itrely on factual evidence to a greater extent than other systems.

← OK

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User Shaun LAWLER



Started 27/04/14 16:29

Submitted 27/04/14 16:36

Status Completed


TimeElapsed

6 minutes.


Question 1

Fill in the blank to complete the following sentence.A horizontal agreement is one made between undertakings operating at the ________level of the production chain.

Selected Answer: same

Correct Answer:


Exact Match same

Exact Match Same

ResponseFeedback:

Well done. Horizontal agreements are those between undertakingsoperating at the same level of the production chain, for example, betweenmanufacturers. Horizontal agreements can include some of the mostserious types of anti-competitive behaviour, such as cartels.

Question 2

Which ONE or MORE of the following anti-competitive arrangements would be mostlikley made within a horizontal relationship?

Selected Answers:

A. Bid-rigging

B. Information exchange

D. Price fixing

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Correct Answers:

A. Bid-rigging

B. Information exchange

D. Price fixing

ResponseFeedback:

Well done. Resale price maintenance (RPM) is a form of price fixing but isusually made within the context of a vertical relationship.

Question 3

Price fixing between competitors is one of the most obvious forms of horizontal anti-competitive behaviour. In order for participants to ensure that the price fixing arrangement'works' and that goods are not being sold below the agreed price, which ONE or MOREof the following anti-competitive arrangements are commonly used in conjunction withprice fixing?

Selected Answers: C.

Information exchange

D.

Market sharing

Correct Answers: C.

Information exchange

D.

Market sharing

ResponseFeedback:

Well done. A market sharing arrangement ensures that goods cannot besold on another cartel member's territory. The fact that another member'sgoods are found outside their allotted territory is evidence that thearrangement has been broken and that it is likley that the member isselling below the agreed price. An information exchange can be used tomonitor the cartel. Bid rigging and restrictions on production are notnecessarily used in conjunction with the type of price fixing arrangementconsidered, but are more commonly used as stand-alone infringements.

Question 4

Although a price fixing cartel can reduce or remove price competition betweencompetitors, it may not on its own be sufficient to stop purchasers buying the productfrom the cartel members. In order to prevent purchasers from acquiring the products fromsuppliers outside the cartel, which ONE of the following arrangements is commonly usedin conjunction with a price fixing arrangement?

Selected Answer: C.

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Exclusive purchasing arrangement

Correct Answer: C.

Exclusive purchasing arrangement

ResponseFeedback:

Well done. An exclusive purchasing arrangement requires a purchaser (orpurchasers) to buy all (or most) of their requirement of the product from thecartel. This prevents the purchaser(s) from obtaining all or partof its requirements from other suppliers which are outside the cartel (andtherefore prevents access to a non-cartelised price).

Question 5

Fill in the blank to complete the following sentence.The reason why businesses enter into price fixing arrangements is to ensure that theycan charge prices above the level that the market would normally sustain. This is referredto as a _______ price.

Selected Answer: supra

Correct Answer:


Exact Match supra-competitive

Exact Match supra competitive

Exact Match Supra competitive

Exact Match Supra - competitive

Exact Match Supra - Competitive

Exact Match Supra Competitive

ResponseFeedback:

That's incorrect. A price which is above the level that the market wouldnormally sustain is referred to as the 'supra-competitive' price

Question 6

Price fixing is a very serious infringement. Which ONE or MORE of the following willamount to a price fixing arrangement for the purposes of EU competition law?


Agreeing to sell at the same price.

B.

The exchange of price sensitive information.

Correct Answers: A.

Agreeing to sell at the same price.

B.

The exchange of price sensitive information.

C.

Setting the maximum level of trade discount.

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D.

Jointly agreeing the amount and date of any price rise.

ResponseFeedback:

That's incorrect. The infringement of price fixing is not just limited toagreeing to sell at the same price, but is wide enough to include all of theabove examples. Accordingly, any agreement between parties that involvesprice, pricing information or pricing strategy can amount to price fixing forthe purposes of EU competition rules.

Question 7

Restrictions on production (or quotas) are a serious infringement of competition rules.Choose ONE of the following statements which correctly describes how these types ofarrangements enable the parties to artificially raise the price of products on the market.

SelectedAnswer:

D. As there is less of the product on the market demand will outstripsupply and prices will rise.

CorrectAnswer:


ResponseFeedback:

Well done. By reducing the amount of the product on the market, demandwill outstrip supply. As there are more buyers (demand) than there isproduct available to buy (supply) then prices will rise (as buyers will need topay more to secure supply of the increasingly scarce product).

Question 8


'The Department of Justice has traditionally had limited ability to extradite foreignerscharged with criminal violations of the Sherman Act to the US. However severalforeigners have voluntarily travelled to the US, pleaded guilty to infringements and servedjail time. The reason they have done this is in order to obtain commitments from theimmigration authorities (via the Department of Justice) that they will be able travel to theUS after their imprisonment.'



ResponseFeedback:

Well done. Several business people have served time in US jails in order tobe able to travel to the US freely, even where there was no question of theirextradition.

Question 9


'All arrangements between competitors are bad for competition.'


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ResponseFeedback:

Well done. Although many agreements will be bad for competition, somehorizontal agreements will have pro-competitive effects. For example,research and development arrangements will allow competitors to pool theirresources to develop new products, where one company alone may nothave the resources to undertake such research.

Question 10

Your client is considering a marketing campaign throughout Europe. Due to the cost ofmarketing it wishes to share the cost with a competitor. This is clearly a horizontalarrangement. Which ONE of the following would you consult to ensure that thearrangement does not infringe European competition rules?

Selected Answers:

C. The Horizontal Cooperation Guidelines

Correct Answers:

C. The Horizontal Cooperation Guidelines

ResponseFeedback:

Well done. The Horizontal Cooperation Guidelines give guidance on a widerange of commercial activity, including marketing (or commercialisation)agreements. The two block exemptions do provide exemptions forhorizontal arrangements but not in the case of marketing.

← OK

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User Shaun LAWLER



Started 05/05/14 21:18

Submitted 05/05/14 21:23

Status Completed

Score 7.6 out of 10 points

TimeElapsed

4 minutes.

Instructions Attempt the following questions. You may need to have a copy of the VerticalRestraints Block Exemption (Commission Regulation 330/2010) at hand to answersome of the questions.

Question 1

Fill in the blank to complete the following sentence.

A vertical agreement is an agreement made between parties operating at ________levels of the production chain.

Selected Answer: different

Correct Answer:


Exact Match different

Exact Match Different

Response Feedback: Well done.

Question 2

The term 'vertical agreement' can cover numerous types of commercial arrangements.Which ONE or MORE of the following commercial arrangements are commonly madebetween parties operating at different levels of the production chain?


Distribution agreement

C.

Franchise agreement

E.

Agency agreement

?

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1 out of 1 points


Correct Answers: A.

Distribution agreement

C.

Franchise agreement

E.

Agency agreement

ResponseFeedback:

Well done. Distribution, franchise and agency agreements are commonlymade between parties operating at different levels of the production chain.For example an agency agreement will be between the principal (thesupplier) and the agent. Specialisation and R&D arrangements arecommonly made between parties at the same level of the production chainand will therefore be described as horizontal agreements.

Question 3

You meet a friend who is very excited. He has just purchased a new car, a Ford Focus,which he has been looking to buy for some time. Your friend describes how hepurchased the new car, and that he contacted numerous dealerships before buying fromthe dealership that offered the lowest price.

How would an economist describe the competitive dynamic between the variousdealerships for your friend's custom?

Choose from ONE of the following.

Selected Answer:

Intra-brand competition

Correct Answer:

Intra-brand competition

ResponseFeedback:

Well done. The competitive dynamic between the dealerships to secure thesale of the Ford Focus to your friend is described as intra-brandcompetition (meaning that each dealership is competing against each otherto attract customers for the same branded product).

Question 4

Imagine you are trying to purchase Product X. You approach the exclusive UKdistributor, but are shocked by the very high price it quotes. Undeterred, you approachthe exclusive French distributor. The price it quotes is very much lower, and even withtransport costs, amounts to a huge saving. You attempt to place an order with theFrench distributor, but are informed that due to restrictions in their distribution agreementthey are prevented from supplying customers outside France.This term contained in the French distribution agreement amounts to which ONE of thefollowing restrictions?

Selected Answer:

D. A restriction on responding to a passive sales request.

Correct Answer:

D. A restriction on responding to a passive sales request.

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ResponseFeedback:

Well done. When a customer approaches a seller this is referred to as apassive sales request. Any restriction on responding to a passive salesrequest is generally prohibited under the Vertical Restraints BlockExemption.

Question 5


'Under the Vertical Restraints Block Exemption (VRBE) a supplier can, in limitedcircumstances, prevent a general distributor from actively seeking orders outside itsallotted territory. Therefore, the VRBE allows suppliers to impose export bans ondistributors'.



ResponseFeedback:

That's incorrect. Although the VRBE does allow a supplier to restrict activeselling (in limited circumstances) it does not allow a general export ban tobe imposed on a general distributor. Such a distributor must be able torespond to passive sales requests, and therefore be able to export theproduct or service in these circumstances.

Question 6

Match the following elements contained within the VRBE to the correct VRBE articlenumber.


Pricing restrictions C.

Article 4

D.

Article 5

Non-compete obligations D.

Article 5

C.

Article 4

Exemption from Article 101(1) A.

Article 2

A.

Article 2

Market share thresholds B.

Article 3

B.

Article 3

Export bans C.

Article 4

C.

Article 4

ResponseFeedback:

At least one of your answers was incorrect. The VRBE is structured in thesame way as many other block exemptions. Accordingly, the exemption isat the beginning (Art 2), followed by the market share thresholds (Art 3) andthen the substantive restrictions (Art 4 - pricing restrictions and exportbans, and Art 5 - non-compete obligations).

Question 7

Article 4(a) VRBE prevents restrictions on the buyer's ability to determine its sale price.Which ONE or MORE of the following practices would amount to such a restriction?

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Selected Answers:

A. Imposing a minimum resale price on a buyer.

Imposing a fixed resale price on the buyer.

Correct Answers:

A. Imposing a minimum resale price on a buyer.

Imposing a fixed resale price on the buyer.

ResponseFeedback:

Well done. Clearly fixing a price will breach Article 4. A minimum salesprice will also infringe Article 4. A seller can recommend a resale price orimpose a maximum price, as long as they do not amount to either a fixedor minimum price.

Question 8


'The VRBE allows non-compete obligations as long as they are restricted in time.Generally, a post-termination non-compete is acceptable as long as it does not exceed 5years.'



ResponseFeedback:

Well done. The VRBE makes a distinction between post-termination non-competes (Article 5(1)(b)) and non-competes that operate during the termof the agreement (Article 5(1)(a)). A post-termination non-competeobligation can generally be limited to 1 year (Article 5(1)(b) and 5(3)(d)VRBE).

Question 9

A vertical arrangement whereby the supplier stipulates the type of retailer that can besupplied is referred to as what?

Choose ONE of the following option.

Selected Answer: B.

A selective distribution agreement.

Correct Answer: B.

A selective distribution agreement.

ResponseFeedback:

Well done. A supplier may want to stipulate the type of retailer for anumber of reasons. For example, the supplier may wish to ensure that thesales staff have the requisite technical knowledge to advise customers.This is possible under a selective distribution arrangement.

Question 10

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In order for a selective distribution agreement to fall outside Article 101(1), which ONE orMORE of the following conditions must be satisfied?

SelectedAnswers:

B. The product must necessitate the use of a selective distributionsystem.

C. The criteria used to select resellers must not go beyond what isnecessary.

CorrectAnswers:

A. Resellers must be chosen on the basis of objective criteria.

B. The product must necessitate the use of a selective distributionsystem.

C. The criteria used to select resellers must not go beyond what isnecessary.

ResponseFeedback:

That's incorrect. Selective distribution arrangements are generallyacceptable as long as all the three of the qualitative criteria outlined in thisquestion are established.

← OK

0 out of 1 points



User Shaun LAWLER



Started 12/05/14 09:55

Submitted 12/05/14 10:04

Status Completed


TimeElapsed

8 minutes.

Instructions Attempt the following questions. You may need to consult a copy of the MergerRegulation (139/2004/EC) to answer some of the questions.

Question 1

Match the following institutions to the relevant legislation.


The Department of Justice C.

The Clayton Act

C.

The Clayton Act

The Office of Fair Trading B.

The Enterprise Act 2002

B.

The Enterprise Act 2002

The European Commission A.

The Merger Regulation

A.

The Merger Regulation

The Federal Trade Commission C.

The Clayton Act

C.

The Clayton Act

ResponseFeedback:

Well done. National merger regimes will reflect particular national concerns.Accordingly, there is less likely to be a common approach to mergercontrol. (Note that in April 2014 it is anticipated that the CMA will take overthe competition functions of the OFT.)

Question 2

The Merger Regulation applies to all mergers in the EU.



ResponseFeedback:

That's good. For the Merger Regulation to apply, the concentrationmust have an EU dimension.

?

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1 out of 1 points


Question 3

BigCo is negotiating the purchase of the entire share capital of LittleCo. The parties'combined worldwide turnover (including relevant parent and subsidiary companies) wasEuro 2.2bn for the last financial year.On the basis of these facts merger notification will not be necessary.

Is this statement TRUE of FALSE?



ResponseFeedback:

Well done. Although the transaction will not be of a sufficient size to havean EU dimension for the purposes of the Merger Regulation, it may stillrequire notification under a national merger regime.

Question 4

There will not be an dimension for the purposes of the Merger Regulation where theparties to the concentration each generate a significant percentage of their turnoverwithin the same Member State.What percentage of relevant turnover do the parties have to generate in the sameMember State for this rule to apply? Choose from ONE of the following options.

Selected Answer: C.

Two-thirds of EU-wide turnover.

Correct Answer: C.

Two-thirds of EU-wide turnover.

ResponseFeedback:

Well done. The reason for the two-thirds rule is to ensure that where such asignificant percentage of EU-wide turnover is generated in the sameMember State it is the national competition authority (rather than theCommission) that examines the transaction.

Question 5

Where notification is required under the Merger Regulation, how many days will theCommission have to make an initial review of the transaction (assuming that the partiesdo not offer commitments nor is a request made for the transaction to be referred to aMember State)?Choose from ONE of the following.

Selected Answer: D.

25 working days

Correct Answer: D.

25 working days

ResponseFeedback:

Well done. The Commission has to work to a very strict timetable. Thistimetable ensures that parties to a notified transaction receive an answerquickly.

Question 6

Which ONE or MORE of the following options will the Commission have at the end of the

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initial review stage (Phase I)?

SelectedAnswers:

A.

To clear the transaction.

B.

To clear the transaction subject to conditions.

C.

Launch an in-depth investigation where it has 'serious doubts' about thetransaction's compatibility with the common market.

CorrectAnswers:

A.

To clear the transaction.

B.

To clear the transaction subject to conditions.

C.

Launch an in-depth investigation where it has 'serious doubts' about thetransaction's compatibility with the common market.

D.

To declare that the transaction is outside the Merger Regulation.

ResponseFeedback:

That's incorrect. The Commission could make any one of the four decisionslisted in the question. It should be noted that the vast majority ofnotifications result in them being cleared at the Phase I stage.

Question 7

BigCo Ltd and MiniCo Ltd (both UK companies) have decided to merge. The transactionpotentially falls within the UK merger regime. BigCo Ltd controls 42% of the widgetsmarket in the UK, whilst MiniCo Ltd has 26% of the unrelated UK bloggets market.Given that both companies enjoy market shares above the 25% 'share of supply test'contained in the Enterprise Act 2002, the merger will fall within the UK merger regime. Isthis statement TRUE or FALSE?



ResponseFeedback:

Well done. There has to be an increase in market share for the 'share ofsupply test' to operate. The widget and blogget markets are unrelated. Soalthough the parties' share of these markets is above the threshold, therewill be no increase in the market share held by the merged entity.

Question 8

Under UK merger rules, where the Office of Fair Trading believes there is likely to be asubstantial lessening of competition, it has a general obligation to refer the merger towhich ONE of the following institutions?

Selected Answer: D.

The Competition Commission

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Correct Answer: D.

The Competition Commission

ResponseFeedback:

Well done. Under UK merger rules the Competition Commission willconduct any in-depth investigation (similar to the European system's PhaseII). However, unlike the European system, different institutions are involvedat each stage. Referrals are only made to the Secretary of State wherethere is a relevant public interest issue. (When the CMA takes over thefunctions of the Competition Commission and the competition functions ofthe OFT, this procedure will change.)

Question 9

Under US merger control, if a transaction satisfies the various financial thresholds whatare the parties to the transaction required to do?Choose from ONE of the following options.

SelectedAnswer:

C. Notify the transaction to both the Department of Justice and theFederal Trade Commission.

CorrectAnswer:

C. Notify the transaction to both the Department of Justice and theFederal Trade Commission.

ResponseFeedback:

Well done. Both the Department of Justice and the Federal TradeCommission need to be notified.

Question 10

Is the following statement TRUE or FALSE?'If a concentration has an EU dimension for the purposes of the Merger Regulation and isnotified to the European Commission, no other merger notifications will be necessary.'



ResponseFeedback:

That's incorrect. Although notification to the European Commission willexclude additional notifications to other Member States within the EU, atransaction could still require notification in jurisdictions outside the EU.With many large transactions, numerous notifications may be required invarious jurisdictions around the world.

← OK

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0 out of 1 points



User Shaun LAWLER



Started 20/05/14 09:52

Submitted 20/05/14 09:59

Status Completed


TimeElapsed

7 minutes.

Instructions Attempt the following questions. You will need to consult a copy of theTechnology Transfer Block Exemption Regulation (Commission Regulation772/2004/EC) to answer some of the questions.

Question 1

Which ONE or MORE of the following Intellectual Property (IP) rights will ariseautomatically under UK law?

Selected Answers:

B. Copyright

C. Unregistered design rights

E. Trade Marks

Correct Answers:

B. Copyright

C. Unregistered design rights

ResponseFeedback:

That's incorrect. Copyright and unregistered design rights ariseautomatically. The other rights require registration before they can be usedto protect IP.

Question 2


'If a patent licence does not come within the Technology Transfer Block ExemptionRegulation (TTBER), it will be prohibited under EU competition rules.'

?

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1 out of 1 points




ResponseFeedback:

Well done. In the event that an agreement (including a patent licence) doesnot come within a relevant block exemption (here the TTBER), it may stillbe capable of individual exemption under Article 101(3).

Question 3

Match the following elements of the TTBER to the correct TTBER article number.

QuestionCorrectMatch

SelectedMatch

List of hardcore restrictions prohibited between competingundertakings.

D.

Article4(1)

D.

Article4(1)

The exemption from Article 101(1). B.

Article 2

B.

Article 2

Excluded restrictions prohibited between competing and non-competing undertakings.

F.

Article 5

F.

Article 5

Market share thresholds for competing and non-competingundertakings.

C.

Article 3

C.

Article 3

List of hardcore restrictions prohibited between non-competingundertakings.

E.

Article4(2)

E.

Article4(2)

The definition of competing undertakings. A.

Article 1

A.

Article 1

ResponseFeedback:

Well done. The structure of the TTBER follows the structure of many otherblock exemptions available under EU competition rules.

Question 4

For the TTBER to apply, which ONE or MORE of the following 'entrance requirements'need to be satisfied?

SelectedAnswers:

A. There must be a 'technology transfer agreement'.

B. The agreement must allow the IP rights to be exploited by theproduction of goods or services.

C. The agreement must be bilateral (made between only twoundertakings).

CorrectAnswers:

A. There must be a 'technology transfer agreement'.

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B. The agreement must allow the IP rights to be exploited by theproduction of goods or services.

C. The agreement must be bilateral (made between only twoundertakings).

ResponseFeedback:

Well done. The 'entrance requirements' relating to the TTBER mean,amongst other things, that it will not apply to pure licensing arrangements(where the IP rights are not exploited by production).

Question 5

When will undertakings be considered as 'potential competitors' under the terms of theTTBER?

Choose from ONE on the following options.

SelectedAnswer:

B.

Where the parties could relatively quickly enter the relevant product andgeographic market in response to a small but permanent increase in price.

CorrectAnswer:

B.

Where the parties could relatively quickly enter the relevant product andgeographic market in response to a small but permanent increase in price.

ResponseFeedback:

Well done. The Guidelines that accompany the TTBER state that apotential to compete will generally be satisfied where the parties couldenter the relevant product and geographic market within one to two years inresponse to a small but permanent price rise (paragraph 29).

Question 6

In the case of non-competing undertakings, the TTBER allows a licensor to restrictthe ability of the licensee to respond to passive sales requests.In which ONE of the following circumstances can a passive sales restriction beimposed?

SelectedAnswer:

A. Passive selling into a territory or a customer group awarded to anotherlicensee for the first two years of that licence's operation.

CorrectAnswer:

D. Passive selling into an exclusive territory or an exclusive customer groupawarded to another licensee for the first two years of that licence'soperation.

ResponseFeedback:

That's incorrect. Unlike a standard distribution agreement, restrictions onpassive selling are allowed under the TTBER (in this case, Article 4(2)(b)(ii)).

Question 7

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Is the following statement TRUE or FALSE?'In the event that an agreement contains excluded restrictions under Article 5 TTBER, thewhole agreement will fall outside the block exemption and can only be 'saved' by use ofan individual exemption under Article 101(3).'



ResponseFeedback:

That's incorrect. The exemption provided by the TTBER will not apply toany obligation listed in Article 5. Therefore, if the offending obligation canbe severed from the agreement, the remainder of the agreement will benefitfrom the TTBER.

Question 8

Article 102 can (in limited circumstances) be used to force an IP holder to license its IPrights. The law in this area was developed in a number of influential cases (listed below).

In order to appreciate how the law developed, put the cases in date order (starting withthe earliest).


1.Magill TV Guide/ITP, BBC and RTE

1.Magill TV Guide/ITP, BBC and RTE

2.Oscar Bronner v Mediaprint

2.Microsoft v Commission

3.IMS Health GmbH & Co v NDCHealth GmbH & Co 3.

Oscar Bronner v Mediaprint

4.Microsoft v Commission

4.IMS Health GmbH & Co v NDCHealth GmbH & Co

ResponseFeedback:

That's incorrect. At least one of your answers is in the wrong order. TheCommission and EU courts defined in these cases where the use of IPrights could amount to an abuse for the purposes of Article 102.

Question 9

If you required more information on how the Commission would approach theassessment of abuse relating to IP rights (and more generally), which ONE of thefollowing guidance notes published by the Commission would you consult?

SelectedAnswer:

D. The Technology Transfer Block Exemption Guidelines.

CorrectAnswer:

C. 'Enforcement priorities in applying Article 82 of the EC Treaty to abusiveexclusionary conduct by dominant undertakings.'

ResponseFeedback:

That's incorrect. Remember that the Commission (as with othercompetition authorities) publishes numerous notices and guidance on allaspects of competition law and policy. These are a valuable source ofinformation.

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Question 10

Is the following statement TRUE or FALSE?'US courts have held that imposing a minimum resale price on a licensee within a patentlicence does not violate US anti-trust legislation.'



ResponseFeedback:

Well done. There will be no breach of US anti-trust law where obligationsimposed on a licensee are no more than would have been the case if thelicensor had exercised its patent rights on its own.

← OK

1 out of 1 points

Review Test Submission: Test & Feedback - Unit 09.1 (a1314)H

Review Test Submission: Test & Feedback - Unit09.1 (a1314)

User Shaun LAWLER


Test Test & Feedback - Unit 09.1 (a1314)

Started 27/05/14 14:41

Submitted 27/05/14 15:00

Status Completed


TimeElapsed

18 minutes.

Instructions Attempt the following questions without consulting your notes.

Question 1

BigCo Ltd and MiniCo Ltd (both UK companies) have decided to merge. The transactionpotentially falls within the UK merger regime. BigCo Ltd controls 42% of the widgetsmarket in the UK, whilst MiniCo Ltd has 26% of the unrelated UK bloggets market.Given that both companies enjoy market shares above the 25% 'share of supply test'contained in the Enterprise Act 2002, the merger will fall within the UK merger regime. Isthis statement TRUE or FALSE?



ResponseFeedback:

Well done. There has to be an increase in market share for the 'share ofsupply test' to operate. The widget and blogget markets are unrelated. Soalthough the parties' share of these markets is above the threshold, therewill be no increase in the market share held by the merged entity.

Question 2

Megacorp has suffered a slowdown in sales of widgets (in which it is dominant) due to adifficult trading environment. It is very keen to reverse this slide and in order to boostsales has decided to retail its products at below cost price.

Which ONE of the following describes Megacorp's strategy?

SelectedAnswer:

D. Megacorp's strategy amounts to predatory pricing which is an abusefor the purposes of Article 102.

CorrectAnswer:

D. Megacorp's strategy amounts to predatory pricing which is an abusefor the purposes of Article 102.

ResponseFeedback:

Well done. You correctly indentified the infringement as predatory pricing.Note that there is no question of Megacorp's behaviour being excused just

?

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because it is operating in difficult financial conditions.

Question 3

The following terms relate to either the EU, UK or US leniency programmes. Match thefollowing terms to the correct competition authority responsible for that leniencyprogramme.


Type A immunity B.


B.


Corporate Leniency Program A.


A.


Penalty plus A.


A.


No-action letter B.


C.

European Commission

Significant added value C.

European Commission

C.

European Commission

ResponseFeedback:

That's incorrect. Remember that although many competition authorities willhave leniency programmes, how they operate many differ significantly.Accordingly, a legal advisor may have to research a particular leniencyprogramme, including understanding the terminology used within thatprogramme.

Question 4

Restrictions on production (or quotas) are a serious infringement of the competition rules.Choose ONE of the following statements which correctly describes how these types ofarrangements enable the parties to artificially raise the price of products on the market.

SelectedAnswer:


CorrectAnswer:


ResponseFeedback:

Well done. By reducing the amount of the product on the market, demandwill outstrip supply. As there are more buyers (demand) than there isproduct available to buy (supply) then prices will rise (as buyers will need topay more to secure supply of the increasingly scarce product).

Question 5

The term 'vertical agreement' can cover numerous types of commercial arrangements.Which ONE or MORE of the following commercial arrangements are commonly madebetween parties operating at different levels of the production chain?

Selected Answers:

A. Distribution agreement

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B. Research and development agreement

C. Franchise agreement

D. Specialisation agreement

E. Agency agreement

Correct Answers:

A. Distribution agreement

C. Franchise agreement

E. Agency agreement

ResponseFeedback:

That's incorrect. Distribution, franchise and agency agreements arecommonly made between parties operating at different levels of theproduction chain. For example in the case of an agency agreement it willbe made between the principal (the supplier) and the agent. Specialisationand R&D arrangements are commonly made between parties at the samelevel of the production chain and will therefore be described as horizontalagreements.

Question 6

Bigdeal Limited (Bigdeal) is keen to ensure that the price at which customers buy itsproducts is kept at a controlled level. In this regard, Bigdeal orders its wholly owned retailoutlets situated all over Europe to charge a common price. Due to this pricing policycustomers cannot obtain the product cheaper by shopping around, as the price is thesame at each outlet.Bigdeal's pricing policy breaches Article 101(1). Is this statement TRUE or FALSE?



ResponseFeedback:

That's incorrect. Remember for there to be a breach of Article 101(1) therehas to be an agreement between undertakings. As the retail outlets arewholly owned by Bigdeal they will form part of the same economic entity.Accordingly, although there is an agreement, it is not 'betweenundertakings' for the purposes of Article 101(1).

Question 7

In general terms, the wider a relevant market is defined, the market share of individualoperators will:

Selected Answer:

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B. Decrease

Correct Answer:

B. Decrease

ResponseFeedback:

Well done. There is a direct relationship between the relevant market andmarket share. Generally, the wider the market is drawn, the lower marketshare figures will be.

Question 8

Assume that you have concluded that a distribution arrangement contains anti-competitve elements and falls under UK rules (in particular the Chapter I prohibitioncontained in the Competition Act 1998). You want to see if there is any way in which thearrangement can benefit from any of the available exemptions or exclusions outlinedbelow. In what order would you conduct your analysis?


1.Notice on Agreements of MinorImportance (NAOMI) 1.

Vertical Restraints Block Exemption


2.Notice on Agreements of MinorImportance (NAOMI)

3.Individual Exemption under s. 9Competition Act 1998 3.

Individual Exemption under s. 9Competition Act 1998

ResponseFeedback:

That's incorrect. The first place to start would be with NAOMI, which canalso be used under the UK system. In the event that NAOMI cannot beused (possibly the market shares of the parties are too high) then theBlock Exemption should be considered as the market share thresholds arehigher; an agreement is exempt from the Chapter I prohibition if it does notaffect trade between Member States but otherwise falls within a a categoryof agreement which is exempted by the Block Exemption. Finally, if neitherNAOMI or the Block Exemption can be used (usually due to high marketshare or the fact that the arrangement contains hard-core restrictions), thefinal option is to see if it can benefit from individual exemption.

Question 9

Which ONE or MORE of the following factors may be taken into considerationwhen assessing whether an undertaking is dominant for the purposes of Article 102?

Selected Answers:

A. Market share.

B. Barriers to entry.

C. Period over which the undertaking has been dominant.

D. Financial resources of the undertaking.

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Correct Answers:

A. Market share.

B. Barriers to entry.

C. Period over which the undertaking has been dominant.

D. Financial resources of the undertaking.

ResponseFeedback:

Well done. All of the above factors could be taken into consideration.Although some factors may play a greater role in establishing dominance -for example market share - it will not be the only factor.

Question 10


'If a patent licence does not come within the Technology Transfer Block ExemptionRegulation (TTBER), it will be prohibited under European competition rules.'



ResponseFeedback:

Well done. In the event that an agreement (including a patent licence) doesnot come within a relevant block exemption (here the TTBER), it may stillbe capable of individual exemption under Article 101(3).

← OK

1 out of 1 points

Review Test Submission: Test & Feedback - Unit 09.2 (a1314)H

Review Test Submission: Test & Feedback - Unit09.2 (a1314)

User Shaun LAWLER


Test Test & Feedback - Unit 09.2 (a1314)

Started 27/05/14 15:14

Submitted 28/05/14 10:22

Status Completed


TimeElapsed

19 hours, 8 minutes.

Instructions Attempt the following questions.

Question 1


'Agency agreements fall outside Article 101(1) because the principal and agent areconsidered to be one undertaking for the purposes of EU competition rules.'



ResponseFeedback:

That's incorrect. Although many agency agreements will fall outside Article101(1) this is dependent on the financial risk borne by the agent. As ageneral point, if a significant element of risk is taken on by the agent it willbe considered as a separate undertaking for the purposes of Article 101(1).

Question 2

Under UK merger rules the 'turnover test' will be satisfied where the UK turnover of theenterprise being acquired exceeds what amount?

Choose from ONE of the following options.

Selected Answer: A.

£50 million?

Correct Answer: C.

£70 million?

ResponseFeedback:

That's incorrect. Remember that UK merger rules are very differentfrom EU merger rules.

Question 3

?

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Fill in the blanks to complete the following sentences.

There are two market share thresholds contained in the Technology Transfer BlockExemption Regulation (TTBER). The first, relating to competing undertakings, requiresthat the combined market share of the parties does not exceed [X] per cent. Thesecond, relating to non-competing undertakings, requires that the market share of eachof the parties does not exceed [Y] per cent.

Specified Answer for: X 20

Specified Answer for: Y 10



Exact Match 20

Exact Match twenty

Exact Match Twenty



Exact Match 30

Exact Match thirty

Exact Match Thirty

ResponseFeedback:

That's incorrect. The TTBER, as with most block exemptions, will only applywhere the market share of the parties does not exceed certain limits.

Question 4

Which ONE or MORE of the following UK institutions could be involved in a case subjectto either investigation, prosecution or appeal under the Competition Act 1998?

Selected Answers: B.

The Serious Fraud Office

D.

The Competition Appeal Tribunal

E.

The Office of Communications (OFCOM)

Correct Answers: A.

The Office of Fair Trading

D.

The Competition Appeal Tribunal

E.

The Office of Communications (OFCOM)

ResponseFeedback:

That's incorrect. At least one of your answers was wrong. The SeriousFraud Office is concerned with the investigation of the criminal carteloffence under the Enterprise Act 2002. The Competition Commission is

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primarily concerns with merger review, market investigation and functionsrelating to the privatised utilities. None of these functions derive from theCompetition Act 1998. As a sectoral regulator, OFCOM has concurrentpowers under the Competition Act 1998. (Remember that it is anticipatedthat the Competition and Markets Authority (CMA) will take over thecompetition functions of the OFT and the functions of the CompetitionCommission in April 2014.)

Question 5

Imagine that you need to assess whether a client holds a dominant position for thepurpose of Article 102 (ex Article 82). As part of this assessment you need to establishthe markets on which the client operates. Which ONE of the following guidelines wouldyou consult?

SelectedAnswer:

C.

'Commission's Notice on the definition of relevant market for the purposesof Community competition rules.'

CorrectAnswer:

C.

'Commission's Notice on the definition of relevant market for the purposesof Community competition rules.'

ResponseFeedback:

Well done. Remember there are a huge number of EU and UK guidancedocuments published which cover most aspects of EU and UK competitionlaw. These guidance notes are an extremely useful source of information.

Question 6

Is the following statement TRUE or FALSE?'By applying for immunity from fines under the Commission's leniency programme, youare automatically granted immunity from fines under the national law of the MemberStates.'



ResponseFeedback:

Well done. Where a leniency application is made to the Commission,additional applications may also need to be made to other competitionauthorities.

Question 7

Fill in the blank to complete the following sentence.

______-brand competition describes the competitive dynamic between different brands.

Selected Answer: intra

Correct Answer:


Exact Match Inter

Exact Match inter

Exact Match Inter-

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Exact Match inter-

ResponseFeedback:

That's incorrect. Competition between different brands is described as inter-brand competition. The impact on inter- and intra-brand competition isparticularly relevant when considering vertical arrangements. Make sureyou appreciate the difference.

Question 8

Which ONE or MORE of the following arrangements will commonly be made betweenundertakings operating at the same level of the production chain?

Selected Answers:

A. Price fixing cartel

D. Bid-rigging arrangement

Correct Answers:

A. Price fixing cartel

B. Research and development agreement

C. Specialisation agreement

D. Bid-rigging arrangement

ResponseFeedback:

That's incorrect. The term 'horizontal agreement' (agreements madebetween parties operating at the same level of the production chain)can cover arrangements that are pro or anti-competitive.

Question 9

Below are a number of stages in a typical enforcement action taken by the Commission.Put these stages in the order that they would typical occur (starting at the beginning ofthe investigation).


1. Dawn raid 1. Dawn raid

2. Settlement procedure 2. Statement of objections

3. Statement of objections 3. Imposition of a fine

4. Oral hearing 4. Oral hearing

5. Imposition of a fine 5. Settlement procedure

ResponseFeedback:

That's incorrect. At least one of your answers was wrong.Although there is no typical investigation, these stages would be found inmost of the enforcement actions that proceed to the imposition of a fine.

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Question 10

Under US rules relating to market power, at what level of market share will a presumptionof monopoly power arise?

Choose from ONE of the following.

Selected Answer: D.

70%

Correct Answer: D.

70%

ResponseFeedback:

Well done. Note that this is only a presumption. Also note that thepresumption arises at a higher market share level than that of 'dominance'under EU and UK rules.

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