Transcript Document

Lucie Bányaiová
COMPETITION LAW I
General
Definition of competition – struggle of various
undertakings – participants on the market – aimed at
• achievement of profit,
• acquisition and maintaining of customers,
• building and improving of position on the market,
and
• out-taking of competitors.
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Lucie Bányaiová
COMPETITION LAW I
General
Roots of Competition Legislation
• Constitution
• Bill of Fundamental Rights and Freedoms
Specific legislation protecting competition
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Lucie Bányaiová
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Means of Protection of Competition
• Private Law Regulation
– general regulation
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unfair competition legislation
• Public Law Regulation
– antitrust (cartels; abuse of dominant position; abuse of
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market power)
merger control
state aid
public procurement
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Lucie Bányaiová
COMPETITION LAW I
Private Law Protection
• Basic principle – stipulated in the Civil Code, Section
2972:
“Whoever participates in economic competition
competitor - may not, in the course of its/her/his
competitive conduct (struggle) or by way of his/her/its
participation in an assoiation for the purpose of
participation in economic competition, abuse his/herits
participation in such economic competition or limit others
in their participation in economic competition.
Wide scope of application – not only direct competitors,
any competitor - anyone who particpates in competition,
i.e. is active on the market.
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Lucie Bányaiová
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Conflict of Laws provisions
• Section 2973: The provisions of the Civil Code relating to abuse and
limiting of economic competition do not cover such activites to the extent
the effecr of such activites/conduct are abroad (unless international
agreements provide otherwise).
• Section 2974: The position of Czech entities and foreign entities are equal
when it comes to participation in economic competition.
• Constitution, Bill of Fundamental Rights, Conflict of Laws Act
• Article 6 of Rome II Regulation (Regulation (EC) No 864/2007 of the
European Parliament and of the Council):
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The law applicable to a non-contractual obligation arising out of an act of unfair
competition shall be the law of the country where competitive relations or the
collective interests of consumers are, or are likely to be, affected.
The law applicable to a non-contractual obligation arising out of a restriction of
competition shall be the law of the country where the market is, or is likely to be,
affected.
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Non-compete clause
Non compete clause must determine the territory, type of
activity or idenitify targets to which the obligation not to
compete relates to. Othetrwise, such non-compete clause will
not be ackwnowledged.
The duration of the noncompete clause is the maximum of 5
years.
Non-compete clauses limiting the restricted party more than
necessary for protection of the other party is prohibited. Upon
request, the court may limit, cancel or invalidate such noncompete clause.
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COMPETITION LAW I
Specific Provisions – Unfair Competition
Definition of Unfair Competition:
Three main features of unfair competition:
• the activity is carried out in economic competition,
• the activity contradicts accepted practices, and
• is able to be detrimental to other competitors.
Any conduct within the above definition of unfair
competition is prohibited and sanctioned.
Where detriment to competitor or contradiction to accepted
practices is claimed with regard to consumers, view of average
consumer is to be taken into account.
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COMPETITION LAW I
Average consumer:
• Consumer who is adequately informed and adequately careful and cautious.
• Cases:
• CJEU: Clinique Laboratories sp. No. C-315/92 average consumer is a
consumer „whose intelligence is not on the verge of dementia and who is
capable to freely decide on the bases of relevant information“
• CJEU: Gut Springenheide sp. No. C-210/96 : „an average consumer is
reasonably well informed and reasonably observant and circumspect“.
• Czech Supreme Court: case No. 32 Odo 229/2006 „the notion of an
´average consumer´is based on a consumer who has sufficient infromation
and is adequately careful and cautious in light of social, cultural and
language factors (as interpreted also by the CJEU).“
• Czech High Court No. 3 Cmo 380/2005: „Advertisment is not the same
thing as a commercial offer. The aim of advertisment is to catch attention
as many addresees as possible. For that is uses short and simple statements
that may be exagerated.“
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Lucie Bányaiová
COMPETITION LAW I
Specific Unfair Competition Offences
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Misleading (deceptive) advertising
Misbranding
Passing off
Parasitic use of reputation
Bribery /Corruption
Disparagement
Comparative advertising
Violation of a trade secrets
Intrusive harrasment/spamming
Endangering health and environment
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Specific Unfair Competition Practices
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Misleading (deceptive) advertising
Presentation of professional skills, products or services with the aim
to support sale or provision thereof that is misleading or able
tocreate misleading perceptions in recipients and as such is able to
influence their conduct in ecnomic competition.
Council Directive 84/450/EEC: any advertising which in any way, including
its presentation, deceives or is likely to deceive the persons to whom it is
addressed or whom it reaches and which, by reason of its deceptive nature,
is likely to affect their economic behaviour or which, for those reasons,
injures or is likely to injure a competitor.
Case: Car boot
Czech High Court No. 3 Cmo 380/2005: „Advertisment is not the same thing
as a commercial offer. The aim of advertisment is to catch attention of as many
addressees as possible. For that is uses short and simple statements that may
be exaggerated. If it contains references to materials with detailed info, it is
not likely to mislead consumers“
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Specific Unfair Competition Practices
• Misbranding
Marking of goods and services in such a way that it
creates an erroneous impression about the country, region
or location where the goods or services so marked
originated or the erroneous impression that the marked
goods or services are made by a certain manufacturer or
that they have special characteristics or quality.
Inlcudes also adjectives e.g. „real“, „original“ attached to
a description of the type/kind of goods
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Specific Unfair Competition Practices
• Passing off
-using a commercial name or special designation (logo) of
an enterprise which is already legitimately used by another
competitor.
-using a special designation of an enterprise, a special
marking or specific design related to products, services or
commercial materials which customers associate with a
particular business of a particular entrepreneur; o
-Imitating competitor’s products, packaging or performance.
Capabile to confuse the competitor with the other
entrepreneur or their products/service, to create an erroneous
notion that a competitor is associated with another
entrepreneur.
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Specific Unfair Competition Practices
• Parasitic use of reputation – free riding
Use by competitor of the reputation of another
competitor’s enterprise, products or services to
gain extra benefits for own or third party’s
business activity which would not otherwise
have been achieved by such person.
Case: Doll Petra - friend of Barbie
Case: Vodafone sheep vs. Shaun the sheep
(Aardman)
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Specific Unfair Competition Practices
• Bribery /Corruption
Activity whereby
– a competitor offers, promises or renders
benefits, directly or indirectly to an individual
who is in management capacity with another
competitor in order to gain advantage over
other competitors through such person’s unfair
behavior, or
– a person mentioned above under a) directly or
indirectly demands, solicits or accepts any kind
of benefit for the same purpose.
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Specific Unfair Competition Practices
• Disparaging
Activity whereby one states or disseminates false
information about products or services of another person
or about the person and its/her/his position, such false
information being detrimental to the aggrieved person.
Disparagement also involves disseminating truthful
information about position, products or services of
another competitor if such information is capable of
causing detriment to that competitor.
Case: T-Mobile vs. Vodafone - Antlers
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Vodafone Advertisment
• „Yes, we could have made a normal advertisement. And
beautiful! Fake snow, fake raindeers, and then lure the
customer… but we said „NO“… if we are to give presents,
then to everyone…“
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The disputed antlers:
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The apology published in daily papers:
„Vodafone Czech Republic a.s. hereby apologises to T-Mobile Czech Republic
a.s. for breaching good morals of competition by placing its advertisment
materials on advertising boards rented for the purposes of Christmas
presentation campaign of T-Mobile Czech Republic a.s. on 5 and 6 December
2006, whereby it severy hindered the rights of T-Mobile Czech Republic a.s. „
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Specific Unfair Competition Practices
• Comparative advertising
Any advertising which explicitly or by implication
identifies a competitor or goods or services
offered by another competitor.
• Case: Telefonica O2 vs. Vodafone – incomparable
tariffs Student Anna case 23 Cdo 1618/2010
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Comparative advertising is admissible if:
• it is not misleading;
• it compares only goods or services meeting the same needs or
intended for the same purpose;
• it objectively compares only such features of the goods or
services which are material, relevant and verifiable, including
their price;
• if in case of comparison with goods with confirmation of origin
such goods are compared with similarly marked goods
• it does not discredit by false information competitor’s
enterprise, goods or services or trademarks or other marking
which are typical of that competitor;
• it does not offer goods or services as imitations or replicas of
goods or services bearing a trademark or protected trade name.
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Specific Unfair Competition Practices
• Violation of a trade secrets
Activity whereby an acting person unlawfully informs
another person about a trade secret which can be used in
economic competition or provides him/her/it with access
to it or unlawfully uses such trade secret to his/her/its
own advantage or to the advantage of a third party.
§ 504 of the Civil Code Trade secrets - facts of
competitive significance that are of importance to the
enterpreneur, can be qualified/specfied, are of
determinable value and are not commonly available in
the business circles and their owner adequately makes
sure they are kept confidential.
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Specific Unfair Competition Practices
Intrusive harrasement/spamming
• Providing information about competitor, its products or
services, as well as offering of goods or services via phone,
fax, email or other means, although such activity is clearly
unwanted by the addressee.
• Promotion disguising identification data of the promoting
person
• Advertising sent to addresses obtained by the enterpreneur
in connection with its business activities is NOT spamming
provided the enterpreneur promotes its own goods/services
and the addressee did not decline the advertising although
it was informed about such possibility to decline further
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COMPETITION LAW I
• Endangering health and environment
Committed by person who produces or introduces
to the market or performs services that are against
the interests to protect health or environment as
such protected by law in order to achieve profit.
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COMPETITION LAW I
Remedies Available for Unfair Competitive Conduct
Persons whose rights have been violated (infringed) or
endangered as a result of unfair competition may
• demand that the offender desists from act constituting unfair
competition;
• demand that the offender removes the unlawful state of
affairs;
• demand compensation of damages incurred as a result of
unfair competitive behavior
• demand that the offender surrenders unjust enrichment
gained by such unfair competitive conduct;
• demand payment of appropriate satisfaction.
Preliminary relief/injunction may be requested.
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Remedies Available for Unfair Competitive Conduct
The right that the offender desists from his/her
unlawful act and removes the unlawful state of
affairs may also be asserted by a legal entity
authorized to protect interests of competitors or
consumers (e.g. Association for Protection of
Consumers).
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CASE STUDY
• Non-alcoholic beverages producer places an advertisment in
TV stating: „MYDRINK tastes the best.“
• Is such advertisement in compliance with law?
• Are competitors right to feel aggrieved? What unfair
competition offences could be triggered?
• Arguments pro and con welcome : )
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