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Competition law

The Court’s treatment of competition law in Karen Murphy was relatively brief. Competition law stands with free movement law as a pillar of the EU’s internal market, but, not least since its principal preoccupation is private practices not measures of public authorities, its detail is not exactly the same.155 The ruling accordingly deals with the detailed ingredients of Article 101 TFEU which are distinct from those associated with Article 56 TFEU, such as, most importantly, the need to find that the arrangements had as their object or effect the prevention, restriction, or distortion of competition. The Court explained that a right holder may in principle grant to a sole licensee the exclusive right to broadcast protected subject matter by satellite and may include territorial restrictions. However, in the light of the Treaty objective of establishing an internal market, agreements which are aimed at partitioning national markets according to national borders or which make the interpenetration of national markets more difficult must be regarded as restrictive of competition within the meaning of Article 101(1).15fi So the problem resided in the additional obligations, beyond exclusivity, designed to ensure compliance with the territorial limitations in the contract: the obligation not to supply decoding devices for use outside the territory covered by the licence agreement. In short, the problem was absolute territorial exclusivity. And the Court, cross-referring to the substantive examination carried out in relation to free movement of services, found in predominantly the same vein that the agreements could not be tolerated under EU law. Here the Court’s treatment was in tune with the general evolution of EU competition law explained previously: the grant of exclusive rights on a territorial basis is not necessarily incompatible with EU law even though it may appear to cause a fragmentation along national lines. But there are limits to this willingness to leave space for the expression of contractual autonomy and a limit is fatally crossed where parties seek to achieve absolute territorial protection.

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