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Doing Business in the EU - Legal Case Report.

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Introduction

EC Competition Law INTRODUCTION In this report, we try to understand and look at how EU competition law can affect the operations of our case company (Atria). This is because the survival and success of Atria will strongly depend on regulations and competition rules in the meat industry set by EU. COMPANY OVERVIEW Atria Oyj is the largest meat-processing company in Finland. It produces and markets whole meat products, sausages, retail-packed meats, poultry products and convenience foods - such as minced meat products, casseroles, microwave meals and soups and salads - made of domestic meat. A major share of the products is sold in Finland via the retail market and catering. Atria Corporation consists of three Atria factories and the subsidiaries Liha and S�ilyke Oy in Forssa, Finland, and Atria Lithells AB and Atria Meat AB in Sweden. Atria Oyj is the biggest exporter in the meat business in Finland. The most important countries for our exports are Sweden, Denmark, Japan, Korea, Norway and the USA. COMPETITION LAW OVERVIEW The regulation of the trade practices by EC has streamline the procedures and manner by which companies are transact and do businesses within the EU. This has brought into the spotlight the conflicting views about the role of EC. Large companies want a reduction in the power of EU, believing that the current power restrict their ability to grow and be globally competitive with their counterpart elsewhere. ...read more.

Middle

Abuse of a dominant position Is prohibited by Article 82 of the EC treaty. Abuse is defined as conduct by a dominant firm that influences the structure of the relevant market or the degree of competition in that market. It includes, i. Directly or indirectly imposing unfair prices or trading conditions, ii. Limiting production or technical development to the detriment of consumers, iii. Applying dissimilar conditions to equivalent transaction, and iv. Incorporating unrelated supplementary obligations into contract. Impact on abuse of dominant position This Article prohibits the abuse of dominant position by companies doing business within the European Union. Atria Oyj for instance, may abuse its dominant position in several ways for instance charging exorbitant prices that undermines competition. Also Atria may abuse its dominant position by limiting production, market or technical developments to the prejudice of consumers. Unjustified refusal to supply meat products to the markets is also considered as abuse of dominant position (Mercado et al, 169, 2001). Limiting the supply of meat products to the markets in an attempt to push prices will have an enormous impact on competition in the markets. In case of any abuse of the dominant position, the commission is responsible for applying the rules specified in article 81 and 82. An obligation to act commences when a third party through a national authority makes a compliant. ...read more.

Conclusion

Types of aid instrument: * Direct Payments * Grants * Interest subsidies received directly by recipient * Tax credits and other tax measures * Tax allowances, exemptions and rate relief * Reductions in social security contributions * Sale or rental of public land or property at prices below market value * Equity participation (including debt conversions) * Soft and Participatory loans We can assume that if Atria will receive any type of aid instrument listed above from any of EU national governments, it will receive infringements from the ECJ. On the other hand, Atria can receive the aid benefits from the national governments, but it should fit the types of aid, which are permissible by Article 87(2), 87(3). CONCLUSION So far Atria has been abiding EC Competition law. Therefore, to sustain their success in the future, the company should continue operating within the EC Competition regulations. Even though, according to own view the EC Law is quite strong. For example, under the restrictive agreement provisions all such agreements are declared illegal unless they are authorized by the EC. Hence, if Atria wants to perceive such agreement, they need to convince the Commission of merits of their proposals. SOURCES 1. Mercado Simon et al, European Business, 4th edition, Prentice Hall, 2001 2. Eurorean Commision Competition, http://europa.eu.int/comm/competition/ 3. J. Reynolds, Business in Europe, 1996 4. EC Competition Law, http://www.eccompetitionlaw.com/ie.htm HELIA EC Competition Law Assignment Doing Business in EU Case company: Atria Oy Nana Osei-Bonsu Frederick Elangwe Svyatoslav Dokuchaev 12. March 2003 2 ...read more.

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