Europeanisation and the restraint of trade doctrine

Abstract

The common law restraint of trade doctrine continues to provide valuable protection in a variety of business contexts. This paper analyses an incompatibility problem that has arisen between that doctrine and EU competition rules (in particular Art 101 Treaty on the Functioning of the EU [TFEU]) as implemented by EU Regulation 1/2003, which, amongst other matters, delineates the interface between national law and EU competition law. According to the High Court, once a court has applied Art 101 TFEU, Art 3 of the Regulation prevents a court from reaching a contrary finding under the restraint of trade doctrine. Thus, the court cannot find a clause is void under the doctrine if the clause comes within the scope of, but is not prohibited by, Art 101 TFEU. In effect, this conclusion displaces the restraint of trade doctrine for parties who are subject to unreasonable restraints that fall foul of the doctrine but are not prohibited by Art 101 TFEU. The interface problem and the possible solution are presented as issues of Europeanisation. The negative impact on national law deriving from an EU measure is portrayed as a ‘top down’ Europeanisation scenario. A contrary ‘uploading’ perspective reveals how and why Art 3 and associated Recitals in Regulation 1/2003 were ‘constructed’. These findings on the intended scope of Art 3 are used to challenge the High Court's view on the negative implications of the Regulation for the restraint of trade doctrine. Finally, this paper offers specific proposals as to how courts in the United Kingdom and Ireland could ensure that the restraint of trade doctrine is not an inevitable casualty of Europeanisation. It argues that when looking for a solution to the ‘top-down’ Europeanisation problem faced by the restraint of trade doctrine, the ‘uploading’ perspective of Europeanisation suggests a solution.