Essentials of EU Competition Law

Question 1

Perspectives on “Competition”

Answer 1

• behaviour of economic operators (rivalry, autonomy)

- market structure (competition vs. monopoly power)

Question 2

Why is competition desirable?

Answer 2

Aversion of monopolies for economic reasons:
– allocate scarce resources efficiently
– deadweight loss, net loss for society
– X inefficiency (‘quiet life’)

Aversion of monopolies for policy reasons
– no sympathy for gains monopolist and its shareholders distribution of income
– no sympathy for concentration of power economic and otherwise
– EU: market integration

Question 3

Why competition law?

Answer 3

• theoretical (‘ideal’) versus real world
• protect competitive structure of markets (-> internal market!)
• enhance consumer welfare
• free competition is reconciled with other interests (social causes, environment, R&D)
• important social corrections, protection of services of general interest ↔ social exclusion

Question 4

History of Competition Law

Answer 4

American invention: Sherman Act (1890) against trusts

• > ‘conspiracy in restraint of trade’ + ‘(attempt to)
• > weakened from 1970s

EU: Introduced after WW II: first ECSC, then EEC

Question 5

5 branches of EU Competition Law

Answer 5

1. Restrictive agreements and practices (‘cartels’)
2. Abuse of dominant position/market power
3. Merger control
4. State aid
5. Public undertakings, services of general interest

(not in isolation but in interaction)

Question 6

Restrictive agreements (Art. 101)

Answer 6

All agreements which restrict or distort competition through:

a) directly or indirectly fixing prices or other trading conditions
b) limit or control production, markets, investment, etc.
c) share markets or sources of supply
d) etc.

Question 7

Abuse of dominance (Art. 102)

Answer 7

Abuse by one or more undertakings of a dominant position, insofar as it may affect trade between Member States, such as:

• unfair prices or trading conditions
• limiting production
• applying dissimilar conditions to equivalent transactions
• supplementary obligations
• etc.

Question 8

State aid (Arts. 107-109)

Answer 8

Any aid granted by a Member State or through State resources in any form which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member.

Question 9

Public undertakings & SGEIs (Arts. 37, 106)

Answer 9

Undertaking with services of general economic interest should follow the rules for competition.