EU Competition LawThe policy of EU competition law was set out in the Treaty of Rome 1957 aiming to create an internal market that could be functional and could ensure fair competition RECOGNISING that the removal of existing obstacles calls for concerted action in order to guarantee steady expansion, balanced trade and fair competitionAim to create or preserve competitive marketsCompanies compete to undercut prices to attract customers, the more companies on the market the better the market.Meaning of Competition “a process of rivalry between firms...seeking to win customers’ business over time”. Meaning of competition lawLaw which seeks to “…protect the process of competition in a free market economy – that is, an economic system in which the allocation of resources is determined solely by supply and demand in free markets and is not directed by government regulation.”Competition law regulates: Agreements and collusion between firms The unilateral behaviour of firms with a certain degree of market power The behaviour of oligopolies and other uncompetitive market structures Mergers and acquisitions State aid (EU level) Benefits of Competition Economic efficiency Lower prices for consumers Consumer choice Innovation Aims of EU competition lawEnforcement of the competition rules is necessary, bot to protect and encourage competition in the market and ensure that the integration of the market by dismantling national barriers to trade. Achieve the three main policy goals: consumer welfare, internal market and competitive processArticle 3(1)(b): Union shall have exclusive competence in the “establishing of the competition rules necessary for the functioning of the internal market”. Articles 101 and 102 TFEU seek to achieve the same aim (namely the maintenance of effective competition within the internal market) on different levels; Continental Can (1973).
Article 101Article 102Content:All agreements between undertakings,decisions by associations of undertakingsand concerted practices which may affecttrade between Member States and whichhave as their object or effect the prevention,restriction or distortion of competitionwithin the internal marketContent:Any abuse by one or more undertakings ofa dominant position within the internalmarket or in a substantial part of it shall beprohibited as incompatible with the internalmarket in so far as it may affect tradebetween Member States.Number of undertakings involved:Conduct must be bi- or multi-lateral,"collusive conduct".Number of undertakings involved:Conduct may be strictly unilateral (conductof one single undertaking). Alternatively:collective dominance.Nature of the prohibitionProhibited in principle; exemptions mayapply: • Individual exemptions under Art.101(3) TFEU;• Block exemptions for certain types ofcases (regulations).