competition/ antitrust principles

Question 1

what is a monopoly/ oligopoly?

Answer 1

• where a company owns such a large share of its market that it has total/ substantial control over trade within that market
• such market dominance can make it hard for competition to arise
• these are heavily regulated deals and may be blocked by regulators on the basis that the outcome would be anti-competitive

Question 2

what is state aid?

Answer 2

• this refers to circumstances where a government gives some form of advantage (usually financial) on a selective basis to domestic companies
• this type of assistance is banned across the EU subject to limited exceptions as it has potential to distort competition and affect trade between member states

Question 3

what is a cartel?

Answer 3

an association of firms, manufacturers or suppliers engaged in a formal agreement to fix prices in particular territories and consequently restrict competition

Question 4

what is gun jumping?

Answer 4

where parties to a proposed merger or acquisition start to act as if the transaction has taken place before receiving formal confirmation from the relevant competition authorities that the transaction can go ahead