In competition law practice, priority is given to agreements concerning competing undertakings with regard to the competition concerns they raise. In this context, the agreement refers to implicit or explicit associations of will or behavior that form companies in order to derive mutual benefit from them that have the restriction of competition as their object and/or effect. In a judgment of 7 December 2015 (case 259/2013), the Supreme Court of Cyprus provided useful guidance on the definition of the terms “undertaking” and `association of undertakings`. This was an administrative appeal against a Commission decision on the protection of competition. The General Court dismissed the administrative appeal on several grounds; However, the reasons for classifying undertakings as an `association of undertakings` are noteworthy on the basis of the proposed guidelines. Dominant position: Under competition law, a dominant position of one or more undertakings in a given market is able to determine economic parameters such as price, supply and the level of production and distribution by acting independently of their competitors and customers. Acquisition, on the other hand, refers to a company that acquires ownership in order to obtain the right to control all or part of another company. Unlike mergers, companies do not necessarily lose their legal personality in the event of a takeover. The conditions leading to the transfer of control from one undertaking to another shall be recognised as acquisitions. Negative clearance: Negative clearance refers to the fact that the Competition Committee may, at the request of the association or associations of undertakings concerned, find that an agreement, decision, conduct or merger and acquisition infringes Articles 4, 6 and 7 of Law No 4054. Following the examination of negative clearance, negative clearance may be granted to the applicant undertaking or association of undertakings demonstrating that an agreement, decision, conduct or merger and acquisition procedure which is the subject of the application does not infringe Articles 4, 6 and 7 of the Law.
With regard to competition law, for example, an antitrust agreement in which competing companies undertake to set the prices of the product or service in question will limit competition; On the other hand, agreements concluded between suppliers and their distributors in which suppliers impose obligations on distributors may also restrict competition and therefore fall within the competence of the competition rules. (d) not restrict competition to a greater extent than is mandatory for the achievement of the objectives referred to in points (a) and (b). The Court accepted the Commission`s position that the licensed carriers were not employees of the Cypriot Port Authority, but were self-employed – and that they employed third parties to carry out their activities; They could therefore be classified as `undertakings` within the meaning of competition law, provided that they offer services and carry out financial and commercial activities from which they derive financial benefits. The Court of First Instance held that LLPA, as an entity, did not have legal personality on the basis of the information provided to the Commission. In assessing whether the LLPA constituted an `association of undertakings` within the meaning of competition law, the General Court therefore accepted the Commission`s argument that the LLPA falls within that definition since it represents the economic advantages of other different undertakings (that is to say, its members, whose services the LLPA undertook to organise and which it represented before various members of the Council). In addition, the insurance policies submitted listed LLPA as insured. Accordingly, the LLPA was presented as the provision of services and the exercise of activities of a purely financial and commercial nature, irrespective of whether those activities were intended to make a profit. Association of undertakings: refers to all types of associations, with or without legal personality, formed by obligations to achieve certain objectives.
Typical examples of associations of undertakings are associations in which undertakings are represented by natural persons. Similarly, chambers of commerce and industry, professional chambers, trade unions and bar associations are considered professional associations. In the field of competition law, no distinction is made between situations in which agreements are concluded orally and those in which they are concluded in writing. It is important for the existence of the agreement whether the express or implicit union of will or conduct between undertakings leads to the prevention, distortion or restriction of competition on the market. The supervisory authorities shall distinguish between the statutes, which characterise agreements between undertakings, and the internal rules and binding measures, which constitute decisions of an association of undertakings. Circulars and recommendations circulated by associations of undertakings shall be decisions within the meaning of Article 101 TFEU if they are in conformity with the statutes brought to the attention of the members of the association, adopted and applied by them. Mergers and Acquisitions: Mergers in their general definition is the merger of two companies into a single new or existing company. In doing so, companies that join an existing company lose their legal personality. In the case of mergers under a new company, all companies involved in the merger lose their legal personality. Cartels: Cartels considered to be the most harmful form of harm to social welfare refer to explicit or implicit agreements or associations concluded between undertakings in a given market for goods and services in order to reduce or restrict competition in that market. Antitrust agreements generally concern the prices of the product, the quantity of products to be supplied, market shares and the territories in which the products are sold, and they are generally concluded under the name of “gentlemen`s agreement” in modern times.
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