How-to guide: Understanding the competition law prohibitions in Article 101 and 102 TFEU (EU)

Introduction

This guide helps in-house lawyers and compliance professionals in organisations of all sizes and sectors to understand the scope and key elements of the competition law prohibitions contained in Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

Articles 101 and 102 TFEU target anticompetitive business conduct. An understanding of Articles 101 and 102 TFEU should underpin the creation and implementation of a compliance programme and help you to take appropriate steps to identify anticompetitive conduct. Failure to comply with competition law can lead to a variety of possible consequences, including large fines.

This guide includes the following sections:

Overview
Article 101 – anticompetitive agreements
Article 102 – abuse of a dominant position
Territorial scope and application
Liability

This guide can be read in conjunction with How-to guides: How to identify and prioritise competition law risk in your organisation, How to identify and address competition law infringements, and Checklists: Competition law compliance and Meeting with a competitor.

Section 1 – Overview

The TFEU contains two main competition law prohibitions. These are contained in:

Article 101 which prohibits anticompetitive agreements; and
Article 102 which prohibits the abuse of a dominant position.

Please note that the scope of this How-to guide does not cover the EU Merger Regulation or Articles 106-109 TFEU, which contain prohibitions related to member state conduct and state aid.

The European Commission is empowered to enforce the competition prohibitions contained in Articles 101 and 102. In addition, National Competition Authorities and courts are obliged to apply Articles 101 and 102 where they apply national competition law to agreements and practices which may affect trade between member states (Regulation 1/2003).

Section 2 – Article 101 – anticompetitive agreements

Article 101(1) prohibits agreements between undertakings, decisions by associations of undertakings and concerted practices which:

may affect trade between EU member states; and
have as their object or effect the prevention, restriction or distortion of competition within the internal market.

Agreements that are prohibited pursuant to Article 101(1) are automatically void.

The Article 101(1) prohibition applies only where an agreement brings about an appreciable restriction of competition.

2.1 The elements of the prohibition

The main elements of the Article 101(1) prohibition are explained in more detail below.

2.1.1 Undertakings

The concept of an ‘undertaking’ refers to any entity engaged in economic activity (ie, offering goods or services on a market) regardless of the legal status of that entity and the way in which it is financed.

2.1.2 Agreements between undertakings

The Article 101(1) prohibition is concerned with agreements between two or more undertakings, as opposed to the Article 102 prohibition which focuses on unilateral conduct (see section 3 below).

Where two or more entities are so close that, economically, they form what is termed a ‘single economic entity’, the Article 101(1) prohibition will not apply. This may be the case, for example, where a parent company exercises decisive influence over a subsidiary, such that the subsidiary cannot be said to enjoy real autonomy on the market, or in the case of a principal-agent relationship where the agent concludes agreements on behalf of the principal and does not bear real risk on its own behalf. In such cases, there is no agreement formed between undertakings.

The term ‘agreement’ has a wide meaning and covers written or oral agreements whether legally enforceable or not. It also includes so-called gentlemen’s agreements (ie, informal and unwritten agreements). There does not have to be a physical meeting of the parties for an agreement to be reached (eg, an exchange of letters or telephone calls may suffice).

Agreements may be entered into between undertakings operating at the same level of the supply chain (horizontal agreements) or between undertakings operating at different levels of the supply chain (vertical agreements).

2.1.3 Decisions by associations of undertakings

The wording ‘decisions by associations of undertakings’ is intended to cover rules, recommendations and regulations of bodies which are self-standing, usually with members, but that do not necessarily carry on any economic activity of their own. If an association qualifies as an undertaking because it does carry on economic activities then its agreements with other undertakings may also be caught by Article 101(1). Examples of associations of undertakings include trade unions or associations and cooperatives.

2.1.4 Concerted practices

Conduct which falls short of an agreement may still be caught by the prohibition if it amounts to a ‘concerted practice’ (ie, a form of practical cooperation, knowingly entered into between competitors which is intended to amount to a substitution for competition in the market). The concept of a concerted practice implies – in addition to the participating undertakings concerting with each other – subsequent conduct on the market and a relationship of cause and effect between the two. This presumption of a causal connection between competitor contact and subsequent conduct on the market is for the parties to rebut with evidence. Concerted practices may take many forms, one example being information exchanged between parties which reduces competitive uncertainty.

For the purposes of this guide, the term ‘agreements’ is used below to refer collectively to agreements between undertakings, decisions by associations of undertakings, and concerted practices.

2.1.5 Object or effect prevention, restriction or distortion of competition

In order to fall foul of the Article 101(1) prohibition, an agreement must have as its object or effect the prevention, restriction or distortion of competition.

Restriction of competition by object

An agreement will have the restriction of competition as its object where the coordination reveals in itself ‘a sufficient degree of harm to competition’.

Where an agreement has the object of restricting competition, it is not necessary to prove that it has an anticompetitive effect in order to find an infringement of the Article 101(1) prohibition – it is automatically considered to be an infringement (subject to the other elements of the prohibition being met). Examples of agreements which have the object of restricting competition include agreements which:

fix prices;
share markets;
establish collusive tendering (bid-rigging);
exchange sensitive pricing information; and
impose export bans.

When deciding whether there is a restriction of competition by object, consider the agreement’s provisions, objectives, and the economic and legal context. When determining that context, take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question.

Restriction of competition by effect

Where an agreement does not have the object of restricting competition, there is a need to consider whether the agreement has the actual or potential effect of restricting competition. An analysis of the effects of an agreement must be assessed within the context in which it would occur in the absence of the agreement (ie, against a counterfactual).

When analysing the restrictive effects of an agreement, the Commission has stated that:

it is normally necessary to define the relevant market. It is normally also necessary to examine and assess, inter alia, the nature of the products, the market position of the parties, the market position of competitors, the market position of buyers, the existence of potential competitors and the level of entry barriers. In some cases, however, it may be possible to show anti-competitive effects directly by analysing the conduct of the parties to the agreement on the market. It may for example be possible to ascertain that an agreement has led to price increases.

2.1.6 Effect on trade between member states

The Article 101(1) prohibition applies to agreements which may affect trade between member states.

The concept of ‘trade’ is not limited to traditional exchanges of goods and services across borders. It is a wider concept, covering all cross-border economic activity. The concept of ‘trade’ also encompasses cases where agreements affect the competitive structure of the market.

The notion ‘may affect’ implies that it must be possible to foresee with a sufficient degree of probability on the basis of a set of objective factors of law or facts that the agreement or practice may have an influence, direct or indirect, actual or potential, on the pattern of trade between member states.

The requirement that there must be an effect on trade between Member States implies that there must be an impact on cross-border economic activity involving at least two member states.

The ability of the agreement or practice to affect trade between member states must be ‘appreciable’. The assessment of appreciability depends on the circumstances of each individual case; in particular, the nature of the agreement and practice, the nature of the products covered and the market position of the undertakings concerned. The Commission states in its Guidelines on the effect on trade concept that, in principle, agreements are not capable of appreciably affecting trade between member states when the following cumulative conditions are met:

the aggregate market share of the parties on any relevant market within the EU affected by the agreement does not exceed 5%; and
in the case of horizontal agreements, the aggregate annual EU turnover of the undertakings concerned in the products covered by the agreement does not exceed €40 million or, in the case of vertical agreements, the aggregate annual Community turnover of the supplier in the products covered by the agreement does not exceed €40 million.

2.1.7 Appreciability

As noted above, the Article 101(1) prohibition applies only where an agreement brings about an appreciable restriction of competition.

An agreement that may affect trade between member states and that has an anticompetitive object constitutes, by its nature, an appreciable restriction on competition.

When determining whether a restriction of competition by effect is appreciable, the European Commission’s Notice on agreements of minor importance (De Minimis Notice) provides a ‘safe harbour’ for agreements between undertakings if the market share held by each of the parties to the agreement does not exceed 15% on any of the relevant markets affected by the agreement, where the agreement is made between undertakings which are not actual or potential competitors. Such agreements will be considered to have non-appreciable effects on competition.

If undertakings fall outside the safe harbour of the De Minimis Notice, the agreement is not automatically considered to have an appreciable effect on competition; further analysis will be required as to whether or not agreements between those undertakings constitute an appreciable restriction of competition.

2.2 Typical infringing behaviour

According to Article 101(1), the types of agreements that will be caught include the following:

fixing purchase or selling prices or other trading conditions;
limiting or controlling production or investment;
market sharing;
applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; and
making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

The last two types of agreements are usually investigated as Article 102 infringements instead, as they tend to give rise to competition concerns when they are applied by undertakings with significant market power (see section 3 below).

2.3 Examples of anticompetitive agreements

In June 2025, the European Commission imposed fines totalling €329 million on Delivery Hero SE, a global online food delivery service, and Glovoapp23, SA (Glovo), a Spanish-based delivery platform. The companies were found to have breached Article 101(1) TFEU by entering into no-poach agreements, exchanging commercially sensitive information, and allocating geographic markets. All the aforementioned practices were facilitated by Delivery Hero's minority shareholding in Glovo (owning a stake in a competitor is not in itself illegal, but in this specific case it enabled anti-competitive contacts between the two rival companies at several levels).

In November 2024, the European Commission imposed fines totalling €5.7 million on a fashion company, Pierre Cardin, and its licensee for breaching Article 101(1) TFEU. The companies were found to have engaged in agreements that prevented other licensees from selling the company's branded clothing outside their licensed territories and to low-price retailers, thereby restricting cross-border sales within the EU Single Market.

In 2022, the European Commission fined five companies a total of €157 million for participating in a cartel concerning purchases on the styrene monomer merchant market. Unlike most cartels, in which companies collude to increase the selling price of goods or services, in this case, the coordination between companies was on an element of the purchase price of styrene and price-related information was exchanged prior to and during negotiations with sellers.

2.4 Exemptions and exclusions

The presence of a restriction on competition does not necessarily mean that an agreement is prohibited. Exemptions are available either because an agreement falls within a category of agreements which is subject to block exemption or because on an individual basis the agreement has certain pro-competitive efficiencies which outweigh its negative effects.

2.4.1 Agreements exempt from the Article 101(1) prohibition

Block exemptions

The European Commission considers that certain categories of agreements that produce sufficient efficiencies and benefits to outweigh any anticompetitive effects should be subject to block exemption from the scope of the Article 101(1) prohibition. These categories of block exemptions are set out in the block exemption regulations, which detail the criteria that must be met for an agreement to be block exempted (this may include for example, market share thresholds and the non-inclusion of certain restrictions). The type of agreements covered include technology transfer agreements, research and development agreements, and specialisation agreements.

Individual exemption

Where an agreement does not fall within the scope of a block exemption, it may still be exempt individually where it meets certain criteria. Article 101(3) details that the following agreements are exempt from the Article 101(1) prohibition:

those agreements that contribute to improving production or distribution, or promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit; but which
do not impose on the undertakings concerned restrictions which are not indispensable to the attainment of those objectives, or afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products in question.

Undertakings must conduct a self-assessment of whether an agreement that might otherwise infringe the Article 101(1) prohibition satisfies the criteria of Article 101(3). Consider the possible application of the exemption criteria carefully as the burden will be on the organisation seeking to rely upon it to show that the criteria are met.

Although exemption under Article 101(3) may be possible for both restrictions of competition by object and by effect, in practice it is much more difficult to show that an object restriction meets the criteria for exemption.

The European Commission has published Guidelines on the application of Article 101(3) Treaty on the Functioning of the European Union.

Section 3 – Article 102 prohibition – abuse of a dominant position

The Article 102 prohibition prohibits any conduct on the part of one or more undertakings which amounts to an abuse of a dominant position within the EU or a substantial part of it in so far as it may affect trade between member states.

It is clear from the prohibition that possessing a dominant position is not in and of itself a problem, but a company with a dominant position has a special responsibility not to allow its conduct to impair competition.

In contrast to the Article 101(1) prohibition, which is concerned with agreements between undertakings, the Article 102 prohibition is primarily focussed on unilateral conduct.

3.1 The elements of the prohibition

The main elements of the prohibition are explained in more detail below.

3.1.1 Undertaking

The concept of undertaking has the same meaning as in the Article 101(1) prohibition, see section 2.1.1 above.

3.1.2 Dominant position

Dominance has been defined under Community law as a position of economic strength enjoyed by an undertaking, which enables it to prevent effective competition being maintained on a relevant market, by affording it the power to behave to an appreciable extent independently of its competitors, its customers and ultimately of consumers.

Holding a dominant position confers a special responsibility on the undertaking concerned, the scope of which must be considered in the light of the specific circumstances of each case.

The Article 102 prohibition requires that the dominant position must be held within the EU internal market or in a substantial part of it. There is no set test for what constitutes a substantial part of the internal market but a dominant position held within parts of a member state has been found to be sufficient to fall within the Article 102 prohibition.

Determining the relevant market

Before assessing dominance, first establish the relevant markets. In defining a market as part of a dominance investigation, the European Commission will consider two dimensions: the relevant product market and the relevant geographic market. The key question is whether a product or geographic area exercises a sufficient competitive constraint on another product or area to be regarded as being in the same relevant market.

The relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer by reason of the products’ characteristics, their prices and their intended use. Therefore, substitutability is key. The Commission will consider various evidence including evidence of actual substitution, various quantitative tests and views of customers and competitors.
The geographic market comprises the area in which the undertakings concerned are involved in the supply and demand of products or services, and in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those areas. The Commission will take a preliminary view of the scope of the geographic market on the basis of broad indications as to the distribution of market shares between the parties and their competitors, as well as a preliminary analysis of pricing and price differences at national and EU or European Economic Area (EEA) level. This initial view is used basically as a working hypothesis to focus the Commission’s enquiries for the purposes of arriving at a precise geographic market definition. The type of evidence the Commission considers relevant to reaching a conclusion on market definition will include past evidence of diversion of orders to other areas, basic demand characteristics, views of customers and competitors and the current geographic pattern of purchases.

Determining market power

Once the relevant markets have been established, you should carry out an assessment of market power.

This assessment of dominance should take into account the competitive structure of the market, and in particular the factors listed below.

Constraints imposed by the existing supplies from, and the position on the market of, actual competitors (the market position of the dominant undertaking and its competitors). The Commission considers that low market shares are generally a good proxy for the absence of substantial market power. The Commission’s experience suggests that dominance is not likely if the undertaking’s market share is below 40% in the relevant market. However, there may be specific cases below that threshold where competitors are not in a position to constrain effectively the conduct of a dominant undertaking, for example, where they face serious capacity limitations. Such cases may also deserve attention on the part of the Commission.
Constraints imposed by the credible threat of future expansion by actual competitors or entry by potential competitors (expansion and entry).
Constraints imposed by the bargaining strength of the undertaking’s customers (countervailing buyer power).

Market definition and the determination of market power is a complex and nuanced process; seek specialist advice if there is a possibility that your organisation might be in a dominant position in respect of any of its activities.

3.1.3 Effect on trade between member states

The Article 102 prohibition only applies to conduct by a dominant undertaking which may affect trade between member states. See above section 2.1.6 for more details.

3.1.4 Abuse

The categories of conduct which might amount to an abuse are not closed, they are considered below in section 3.2.

3.2 Typical infringing behaviour

Below are examples of the categories of behaviour that may constitute an abuse, and therefore infringements of the Article 102 prohibition:

directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
limiting production, markets or technical development to the prejudice of consumers;
applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; or
making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

The type of behaviours that may be abusive fall into two broad categories: exclusionary abuses (eg, applying dissimilar conditions to similar transactions) and exploitative abuses (eg, imposing unfair purchase or selling prices).

Any conduct on the part of one or more organisations that amounts to the abuse of a dominant position in a market is prohibited.

In 2009 the European Commission published Guidance on the Commission’s enforcement priorities in applying Article 102 to abusive exclusionary conduct by dominant undertakings. In 2023 the Commission published a Communication (and Annex) amending its 2008 Guidance on enforcement priorities concerning exclusionary abuses. On 1 August 2024, the Commission published draft Guidelines on exclusionary abuses. These draft Guidelines aim to enhance legal clarity for businesses assessing potential abuses under Article 102 TFEU. The Commission currently plans to finalise the process for the adoption of the guidelines in the course of 2025. Following the adoption of the Guidelines, the Commission will withdraw the 2008 Guidance on enforcement priorities, as amended by the March 2023 Communication. Further information on Application of Article 102 can be accessed here.

3.3 Example of abuse of a dominant position

In September 2025, the European Commission fined Google €2.95 billion for breaching EU antitrust rules by distorting competition in the advertising technology industry. It did so by favouring its own online display advertising technology services to the detriment of competing providers of advertising technology services, advertisers and online publishers. The Commission ordered Google (i) to bring these self-preferencing practices to an end; and (ii) to implement measures to cease its inherent conflicts of interest along the advertising technology supply chain.

In 2022, the General Court largely upheld on appeal the decision of the European Commission to fine Google for having abused its dominant position by imposing anticompetitive contractual restrictions on manufacturers of mobile devices and on mobile network operators in order to consolidate the dominant position of its search engine. The General Court set the amount of the fine imposed on Google at €4.125 billion (a slight reduction from the fine imposed by the European Commission of almost €4.343 billion).

3.4 Defences and exemptions

While there is no defence set out in Article 102 to an abuse of a dominant position, if a dominant company shows that the conduct was objectively justified, the conduct will not amount to an abuse. In relation to objective justification, it is open to a dominant undertaking to raise a plea of justification and to support it with arguments and evidence to demonstrate that its conduct was objectively necessary. In this context, the Commission will assess whether the conduct in question is indispensable and proportionate to the goal allegedly pursued by the dominant undertaking.

In practice, it is not easy to show that there was an objective justification, although the defence has been accepted in a number of cases.

A dominant undertaking may justify exclusionary conduct on efficiency grounds. The European Commission’s Article 102 Enforcement Priorities Guidance (Article 102 Guidance) explains that conduct leading to foreclosure of competitors may be justified on the ground of efficiencies that are sufficient to guarantee that no net harm to consumers is likely to arise. In this regard, the four conditions laid out in paragraph 30 of the Article 102 Guidance would need to be fulfilled in order for any such justification to succeed.

The Commission makes the ultimate assessment of whether the conduct concerned is not objectively necessary and, based on a weighing-up of any apparent anti-competitive effects against any advanced and substantiated efficiencies, is likely to result in consumer harm.

Section 4 – Territorial scope and application

4.1 Territorial scope of Articles 101 and 102

The territorial scope of Articles 101 and 102 has been the subject of consideration in various cases.

The Commission’s competence to punish anticompetitive conduct adopted by undertakings outside the European Union may be established on the basis of either the:

implementation test; or
qualified effects test.

The Commission considers that in cartel-related activity, conduct consists of the formation of an agreement and the implementation of that agreement. Where implementation takes place within the EU then the Commission’s competence is justified.

Alternatively, under the qualified effects test, the Commission may assert its competence where the conduct is capable of producing immediate, substantial and foreseeable effects on the territory of the European Union.

Section 5 – Liability

The penalties for non-compliance with competition law can be severe. The potential consequences for each are dealt with in turn below.

5.1 Corporate liability

If your organisation is found to have broken competition law, consequences may include the following:

financial penalties;
unenforceability of restrictions in agreements;
decisions requiring agreements or conduct to be modified or brought to an end;
exclusion from tender processes;
private damages claims; and
other business implications.

Each of the above possible consequences is explained in more detail below.

5.1.1 Financial penalties

Infringement of the Article 101(1) or Article 102 prohibitions can lead to the imposition of a fine of up to 10% of worldwide group turnover in the previous business year. The Commission has published Guidelines on the method of setting fines.

In November 2024, the European Commission fined Meta €797 million under Article 102 TFEU. The Commission found that Meta's practices, which included tying its Facebook Marketplace to its social network and using data from competitors' ads exclusively for Facebook Marketplace, amounted to anti-competitive behaviour. Meta is appealing the decision.

5.1.2 Unenforceability of restrictions in agreements

According to Article 101(2), agreements prohibited by Article 101(1) shall be automatically void. If it is possible to sever the offending provisions from the rest of the agreement, the remaining terms will remain valid and enforceable. However, there is no EU-wide principle of severance and so national member state law will be relevant in determining whether severance is possible.

5.1.3 Decisions requiring infringements be brought to an end

Where the Commission finds that there has been an infringement of Article 101(1) or 102, it may issue a decision requiring the parties concerned to bring the infringement to an end. For this purpose, the Commission may impose any behavioural or structural remedies which are proportionate to the infringement committed and necessary to bring the infringement effectively to an end.

Structural remedies can only be imposed either where there is no equally effective behavioural remedy or where any equally effective behavioural remedy would be more burdensome for the undertaking concerned than the structural remedy.

5.1.4 Exclusion from tender processes

Article 57 of Directive 2014/24/EU on public procurement (the Public Contracts Directive) (which has been transposed into the national laws of all member states) provides that contracting bodies running public procurement processes may exclude (or may be required by member states to exclude) an economic operator from participation in a procurement procedure if the contracting authority has sufficiently plausible indications to conclude that the economic operator has entered into agreements with other economic operators aimed at distorting competition.

5.1.5 Private damages actions

Organisations that do not comply with competition laws can be subject to damages claims brought by third parties seeking redress for loss suffered because of an infringement of competition law. For example, the victims of a cartel may seek damages for the higher prices they had to pay for products because of the cartel. Competition damages actions are brought in national courts, although differences between national regimes mean that matters such as which court has jurisdiction to hear a case and which law should be applied are often strongly contested.

5.1.6 Other business implications

Furthermore, in addition to the legal consequences, there may be business implications. Competition investigations can be lengthy and time-consuming. In addition to the legal costs that will necessarily be incurred in the course of an investigation, there will also be an opportunity cost for the business as an investigation will likely divert a significant amount of director and senior management time from their other activities. In addition, the negative impact on a company’s reputation of a finding of infringement can be significant and long-lasting. For more information on the Commission’s investigation procedures, see the Commission’s webpage on antitrust and cartels procedures.

5.2 Individual liability

EU competition law is focussed on sanctioning undertakings and, in contrast to other jurisdictions, does not impose penalties on individuals.