“The Claimants submit that the RUK Agreements, AMRAC Agreement and AMRAC Licences are individually and/or collectively contrary to the prohibition established bysection 2(1) of the Competition Act 1998 (the Chapter I prohibition”) further or alternatively Article 81(1) of the EC Treaty because they provide for or give effect to the collective exclusive licensing of the RUK relevant rights to AMRAC on a closed basis.”
“Further or alternatively by virtue of the acts identified above the Defendants or some of them participated in a concerted practice contrary to the Chapter I prohibition further or alternatively Article 81(1) of the EC Treaty because they sought to procure, facilitate and/or give effect to the collective exclusive licensing of the RUK relevant rights to AMRAC on a closed basis (“the Concerted Practice”).”
“The collective exclusive licensing on a closed basis prevents the individual RUK racecourses from being able to market their relevant rights individually. In the absence of such collective exclusive licensing on a closed basis the individual racecourses would be entitled to set prices and other licence conditions independently of one another and in competition with one another. The collective exclusive licensing on a closed basis thus eliminates competition, including price competition, between individual RUK racecourses in respect of the marketing of the RUK relevant rights.”
“The collective exclusive licensing to AMRAC on a closed basis prevents competitors to AMRAC from having the opportunity to negotiate or tender the RUK relevant rights. Such collective exclusive licensing on a closed basis forecloses competition from other actual or potential competitors to AMRAC to the detriment of competition in the market for the provision of images, sound and data to LBOs in respect of horseracing at the RUK racecourses.”
“For the avoidance of doubt, the reference in paragraph 26(a) above to collective licensing which prevented the individual racecourses from setting prices independently of one another and in competition with one another, constituted collective price setting by the Defendant racecourses inter se and/or the Defendant racecourses inter se together with the 1st to 4th Defendants which falls within Article 81(1) as a restriction by object.”
“much about the financial plan and strategy now changes as a result of the Arena decision, but on the positive side, it strengthens our legal position considerably, to the extent that we no longer need to be so measured about our use of exclusivity.”
“what would have competition have been like in the absence of the AMRAC exclusive licence agreements?”
“The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which: a) directly or indirectly fix purchase or selling prices or any other trading conditions; b) limit or control production, markets, technical development, or investment; c) share markets or sources of supply; d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.”
“Any agreements or decisions prohibited pursuant to this Article shall be automatically void.”
“The prohibition rule of Article 81(1) applies to restrictive agreements and concerted practices between undertakings and decisions by associations of undertakings in so far as they are capable of affecting trade between Member States. A general principal underlying Article 81(1) which is expressed in the case law of the Community Courts is that each economic operator must determine independently the policy, which he intends to adopt on the market. In view of this the Community Courts have defined “agreements”, “decisions” and “concerted practices” as Community law concepts which allow a distinction to be made between the unilateral conduct of an undertaking and co-ordination of behaviour or collusion between undertakings.”
“The type of co-ordination of behaviour or collusion between undertakings falling within the scope of Article 81(1) is that where at least one undertaking vis-à-vis another undertaking undertakes to adopt a certain conduct on the market or that as a result of contacts between them uncertainty as to their conduct on the market is eliminated or at least substantially reduced. It follows that co-ordination can take the form of obligations that regulate the market conduct of at least one of the parties as well as of arrangements that influence the market conduct of at least one of the parties by causing a change in its incentives. It is not required that co-ordination is in the interest of all the undertakings concerned. Co-ordination must also not necessarily be express. It can also be tacit. For an agreement to be capable of being regarded as having been concluded by tacit acceptance there must be an invitation from an undertaking to another undertaking, whether express or implied, to fulfil a goal jointly. In certain circumstances an agreement may be inferred from and imputed to an ongoing commercial relationship between the parties. However, the mere fact that a measure adopted by an undertaking falls within the context of on-going business relations is not sufficient.”
"It follows that the concept of an agreement within the meaning of Article 85(1) of the Treaty, as interpreted by the case-law, centres around the existence of a concurrence of wills between at least two parties, the form in which it is manifested being unimportant so long as it constitutes the faithful expression of the parties' intention." [24] After referring to certain cases in which measures adopted in an apparently unilateral manner by a manufacturer had been held to constitute an agreement, the CFI went on to say this at para 71: "
"101 However, such an agreement cannot be based on what is only the expression of a unilateral policy of one of the contracting parties, which can be put into effect without the assistance of others. To hold that an agreement prohibited by Article 85(1) of the Treaty may be established simply on the basis of the expression of a unilateral policy aimed at preventing parallel imports would have the effect of confusing the scope of that provision with that of Article 86 of the Treaty. 102 For an agreement within the meaning of Article 85(1) of the Treaty to be capable of being regarded as having been concluded by tacit acceptance, it is necessary that the manifestation of the wish of one of the contracting parties to achieve an anti-competitive goal constitute an invitation to the other party, whether express or implied, to fulfil that goal jointly, and that applies all the more where, as in this case, such an agreement is not at first sight in the interests of the other party, namely the wholesalers."
“The objective of Article 81 is to protect competition on the market as a means of enhancing consumer welfare and of ensuring an efficient allocation of resources. Competition and market integration serve these ends since the creation and preservation of an open single market promotes an efficient allocation of resources throughout the Community for the benefit of consumers.”
“Vigorous competition between firms is the life blood of strong and effective markets. Competition helps consumers get a good deal. It encourages firms to innovate by reducing slack, putting downward pressure on costs and providing incentives for the efficient organisation of production.”
“In effect, the objective assigned to Article 81(1)EEC, which constitutes a fundamental provision indispensable for the achievement of the missions entrusted to the Community, in particular for the functioning of the internal market ….., is to prevent undertakings, by restricting competition between themselves or with third parties, from reducing the welfare of the final consumer of the products in question…………”
“The assessment of whether or not an agreement has as its object the restriction of competition is based on a number of factors. These factors include, in particular, the content of the agreement and the objective aims pursued by it. It may also be necessary to consider the context in which it is (to be) applied and the actual conduct and behaviour of the parties on the market. In other words, an examination of the facts underlying the agreement and the specific circumstances in which it operates may be required before it can be concluded whether a particular restriction constitutes a restriction of competition by object. The way in which an agreement is actually implemented may reveal a restriction by object even where the formal agreement does not contain an express provision to that effect. Evidence of subjective intent on the part of the parties to restrict competition is a relevant factor but not a necessary condition.”
“If an agreement is not restrictive of competition by object it must be examined whether it has restrictive effects on competition. Account must be taken of both actual and potential effects. In other words the agreement must have likely anti-competitive effects. In the case of restrictions of competition by effect there is no presumption of anti-competitive effects. For an agreement to be restrictive by effect it must affect actual or potential competition to such an extent that on the relevant market negative effects on prices, output, innovation or the variety or quality of goods and services can be expected with a reasonable degree of probability. Such negative effects must be appreciable. The prohibition rule of Article 81(1) does not apply when the identified anti-competitive effects are insignificant. This test reflects the economic approach which the Commission is applying. The prohibition of Article 81(1) only applies where on the basis of proper market analysis it can be concluded that the agreement has likely anti-competitive effects on the market. It is insufficient for such a finding that the market shares of the parties exceed the thresholds set out in the Commission’s de minimis notice. Agreements falling within safe harbours of block exemption regulations may be caught by Article 81(1) but this is not necessarily so. Moreover, the fact that due to the market shares of the parties, an agreement falls outside the safe harbour of a block exemption is in itself insufficient basis for finding that the agreement is caught by Article 81(1) or that it does not fulfil the conditions of Article 81(3). Individual assessment of the likely effects produced by the agreement is required.”
“Negative effects on competition within the relevant market are likely to occur when the parties individually or jointly have or obtain some degree of market power and the agreement contributes to the creation, maintenance or strengthening of that market power or allows the parties to exploit such market power. Market power is the ability to maintain prices above competitive levels for a significant period of time or to maintain output in terms of product quantities, product quality and variety or innovation below competitive levels for a significant period of time. In markets with high fixed costs undertakings must price significantly above their marginal costs of production in order to ensure a competitive return on their investment. The fact that undertakings price above their marginal costs is therefore not in itself a sign that competition in the market is not functioning well and that undertakings have market power that allows them to price above the competitive level. It is when competitive constraints are insufficient to maintain prices and output at competitive levels that undertakings have market power within the meaning of Article 81(1).”
“The creation, maintenance or strengthening of market power can result from a restriction of competition between the parties to the agreement. It can also result from a restriction of competition between any one of the parties or third parties, e.g. because the agreement leads to foreclosure of competitors or because it raises competitors’ costs limiting their capacity to compete effectively with the contracting parties. Market power is a question of degree. The degree of market power normally required for a finding of an infringement under Article 81(1) in the case of agreements that are restrictive of competition by effect is less than the degree of market power required for a finding of dominance under Article 82.”
“In Community competition law the concept of ancillary restraints covers any alleged restriction of competition which is directly related and necessary to the implementation of a main non-restrictive transaction and in proportion to it. If an agreement in its main parts, for instance a distribution agreement or joint venture, does not have as its object or effect a restriction of competition then restrictions, which are directly related to and necessary for the implementation of that transaction, also fall outside Article 81(1). These related restrictions are called ancillary restraints. A restriction is directly related to the main transaction if it is subordinate to the implementation of that transaction and is inseparably linked to it. The test of necessity implies that the restriction must be objectively necessary for the implementation of the main transaction and be proportionate to it. It follows that the ancillary restraints test is similar to the test set out in paragraph 18(2) above. [This paragraph includes an example of a restriction being imposed for the purpose of allowing a distributor to penetrate a new market.] However, the ancillary restraints test applies in all cases where the main transaction is not restrictive of competition. It is not limited to determining the impact of the agreement on intra-brand competition.”
“The application of the ancillary restraint concept must be distinguished from the application of the defence under Article 81(3) which relates to certain economic benefits produced by restrictive agreement and which are balanced against the restrictive effects of the agreements. The application of the ancillary restraint concept does not involve any weighing of pro-competitive and anti-competitive effects. Such balancing is reserved for Article 81(3).”
“If on the basis of objective factors it can be concluded that without the restriction the main non-restrictive transaction would be difficult or impossible to implement, the restriction may be regarded as objectively necessary for its implementation and proportionate to it.”
“(1) the agreement must contribute to improving the production or distribution of goods or contribute to promoting technical or economic progress; (2) consumers must receive a fair share of the resulting benefits; (3) the restrictions must be indispensable to the attainment of these objectives; and (4) the agreement must not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question.”
“ We confess to some difficulty in reconciling the approach of the ECJ in Gøttrup-Klim and Wouters with that of the CFI in Métropole, but find it unnecessary to dwell on the explanation in Métropole as to the rationale that the CFI perceived as underlying cases such as Gøttrup-Klim and Wouters (the latter of course being decided after Métropole). We consider that these two decisions of the ECJ show that the assessment of whether or not a particular arrangement constitutes an infringement of Article 85(1) (now Article 81(1)), or therefore of the Chapter I prohibition, is a rather more flexible exercise than the CFI was perhaps willing to appreciate. It is not enough that the arrangement is apparently anti-competitive, as in Gøttrup-Klim and Wouters. What those cases show is that ostensibly restrictive arrangements which are necessary to achieve a proper commercial objective will not, or may not, constitute an anti-competitive infringement at all. Whether or not they will do so requires an objective analysis of the particular arrangement entered into by the parties, assessed by reference to their subjective "wants" and against the evidence of the particular market in which they made their arrangement. The task then is to consider whether the restrictive arrangement of which complaint is made is "necessary" to achieve the objective. The RCA appellants also submitted that the concept of "necessity" in this context is not an absolute one, but has an element of flexibility about it, for which they referred us to paragraph 109 in the Métropole case in which the court observed that "If, without the restriction, the main operation is difficult or even impossible to implement, the restriction may be regarded as objectively necessary for its implementation." We also accept this last submission: competition law is not an area of law in which there is much scope for absolute concepts or sharp edges. ”
“ 68 Moreover, in a case such as this, where it is accepted that the agreement does not have as its object a restriction of competition, the effects of the agreement should be considered and for it to be caught by the prohibition it is necessary to find that those factors are present which show that competition has in fact been prevented or restricted or distorted to an appreciable extent. The competition in question must be understood within the actual context in which it would occur in the absence of the agreement in dispute; the interference with competition may in particular be doubted if the agreement seems really necessary for the penetration of a new area by an undertaking (Société minière et technique at 249-250). 69 Such a method of analysis, as regards in particular the taking into account of the competition situation that would exist in the absence of the agreement, does not amount to carrying out an assessment of the pro- and anti-competitive effects of the agreement and thus to applying a rule of reason, which the Community judicature has not deemed to have its place under Article 81(1) EC (Case C-235/92 P Montecatini v Commission[1999] ECR I-4539 , paragraph 133; M6 and Others v Commission, paragraphs 72 to 77; andCase T-65/98 Van den Bergh Foods v Commission[2002] ECR II-4653 , paragraphs 106 and 107). 70 In this respect, to submit, as the applicant does, that the Commission failed to carry out a full analysis by not examining what the competitive situation would have been in the absence of the agreement does not mean that an assessment of the positive and negative effects of the agreement from the point of view of competition must be carried out at the stage of Article 81(1) EC. Contrary to the defendant's interpretation of the applicant's arguments, the applicant relies only on the method of analysis required by settled case-law. 71 The examination required in the light of Article 81(1) EC consists essentially in taking account of the impact of the agreement on existing and potential competition (see, to that effect,Case C-234/89 Delimitis[1991] ECR I-935 , paragraph 21) and the competition situation in the absence of the agreement (Société minière et technique at 249-250), those two factors being intrinsically linked. 72 The examination of competition in the absence of an agreement appears to be particularly necessary as regards markets undergoing liberalisation or emerging markets, as in the case of the 3G mobile communications market here at issue, where effective competition may be problematic owing, for example, to the presence of a dominant operator, the concentrated nature of the market structure or the existence of significant barriers to entry - factors referred to, in the present case, in the Decision.”
“UEFA’s joint selling arrangement has the effect that through the agreement jointly to exploit the commercial rights of the UEFA Champions League on an exclusive basis through a joint selling body, UEFA, prevents the individual football clubs from individually marketing such rights. This prevents competition between the football clubs and also between UEFA and the football clubs in supplying in parallel media rights to the UEFA Champions League to interested buyers in the upstream markets. This means the third parties only have one single source of supply. Third-party commercial operators are therefore forced to purchase the relevant rights under the conditions jointly determined in the context of the invitation to bid, which is issued by the joint selling body. This means that the joint selling body restricts competition in the sense that it determines prices and all other trading conditions on behalf of all individual football clubs producing the UEFA Champions League content. In the absence of the joint selling agreement the football clubs would set such prices and conditions independently of one another and in competition with one another. The reduction in competition caused by the joint selling agreement therefore leads to uniform prices compared to a situation with individual selling.”
“Joint selling prevents clubs from taking independent commercial action regarding the exploitation of the media rights pertaining to Premier League matches. In place of twenty clubs, each having a relatively small market share and each pursuing its own media rights policy, the arrangements result in a single (joint) sales organisation with exclusive rights, enjoying significant market share, and pursuing a single sales policy. Markets on which no one possesses market power and whose development would typically be dictated by the demand for rights become subject to the commercial choices made by a joint sales organisation with a significant market share. Markets that would be demand-led thus become supply-driven. As a consequence, the joint sales organisation can, depending on how and to whom the rights are sold, restrict output and create foreclosure problems on downstream markets.”
“The Commission’s consistent policy has been that joint selling constitutes a horizontal restriction of competition under Article 81(1) EC. At the same time, the Commission also acknowledges that joint selling creates certain efficiencies and may, under certain circumstances, fulfil the conditions of Article 81(3) EC and therefore not constitute a violation of Article 81EC. The Commission remedied the negative effects of joint selling by requiring, e.g., the selling of rights in several individual rights packages following an open and transparent tendering process. Moreover, the duration of rights contracts should exceed 3 years and unsold rights would fall back for individual exploitation by the clubs. The above mentioned decisions had the effect of opening up media rights markets to broadcasters and new media service providers by making several different rights packages available while safeguarding the social and cultural aspects of football. This prevented the concentration of all available rights in the hands of a single media operator and ensured that a maximum amount of rights was made available to sports fans. The question if and under which conditions joint selling can be justified on the basis of Article 81(3) has to be examined in the light of the specific circumstances of each individual case.”
“In the upstream market Article 81(1) EC applies to joint selling agreements leading to competition restrictions, like foreclosure and output limitation, that would unlikely have occurred in the absence of the agreements. Joint selling describes, for example, the situation where sport clubs entrust the selling of their media rights to their sports association which then sells the rights collectively on their behalf. A joint selling arrangement is a horizontal agreement which prevents the individual clubs each having a relatively small market share from individually competing in the sale of sports media rights. One price is applied to all rights collectively which constitutes price fixing. In addition the number of rights available in the upstream acquisition market is often reduced which may create barriers to entry on downstream broadcasting markets and may lead to access foreclosure in these markets.”
“… It is important to note that there is no ‘standard’ or ‘one-size-fits-all’ approach that applies to cases involving sports media rights. The Commission will have to carefully assess each individual case in order to determine, where necessary, the appropriate remedy or remedies, taking into account the specific facts and circumstances, in particular also considering the technological developments of the relevant markets.”
“Any agreements or decisions prohibited pursuant to this Article shall be automatically void.”
“….the automatic nullity decreed by Article [81(2)] of the Treaty applies only to those contractual provisions which are incompatible with Article [81(1)]. The consequences of such nullity for other parts of the agreement, and for any orders and deliveries made on the basis of the agreement, and the resulting financial obligations are not a matter for Community law. Those consequences are to be determined by the national court according to its own law.”
“It seems to me, that in applying Article [81] to an English contract, one may well have to consider whether, after the excisions required by the Article of the Treaty have been made from the contract, the contract could be said to fail for lack of consideration or on any other ground, or whether the contract would be so changed in its character as not to be the sort of contract the parties intended to enter into at all.”
“It appears to me that if there was a concerted practice as alleged, if the claimants here were parties to it and if the commencement or continuation of these proceedings is part of that concerted practice, it is at least arguable in the current state of European law that the defendants will have a defence or a claim for compensation. As I have indicated above, even if the defendants make out all of their allegations, there could well be difficult questions of what relief would be appropriate on their counterclaim, but that is not a matter on which I have been addressed.”