3 The Law and Economics of Anticompetitive Coordination

Abstract

This chapter examines Article 101 TFEU (Treaty on the Functioning of the European Union). All modern competition law regimes outlaw the coordination of independent undertakings where it leads to a restriction of competition. In the European Union, a prohibition system is enshrined in Article 101 TFEU, which holds that ‘agreements between undertakings’ which restrict competition are ‘incompatible’ with the Treaty. Article 101 TFEU is a three-pronged provision. First, Article 101(1) TFEU establishes a prohibition rule, which provides that agreements between undertakings which may affect trade between Member States and which restrict competition are incompatible with the internal market. Second, Article 101(2) TFEU declares that agreements deemed incompatible pursuant to Article 101(1) TFEU are null and void. Third, Article 101(3) TFEU embodies an exception rule which defuses the application of Article 101(1) to agreements that bring a positive net contribution to consumer welfare.