Lecture 3 - competition, antitrust & trade law

Question 1

What are problems for legislators of trade law (free trade)?

Answer 1

• Market failures; market is incapable of sorting itself out and handling externalities. Legislation has a direct effect on monopolies and oligopolies, since we are expected to compete.
• Skewed market power balance. In B2C relationships consumer protection laws are needed. In B2B relationships small and mid-sized companies are protected to avoid unfair contracts.

Question 2

What are three characteristics legal rules should possess?

Answer 2

• Be clear and precise
• Be proportionate (serves intended purpose)
• Easy to administrate

Question 3

What are some ways to regulate and single out bad behaviour?

Answer 3

• Ex ante regulation = you must do this!
• Ex post regulation = do what you want as long as you follow general rules.
• Self regulation = self discipline
  Regulations are often very specific with clear do’s and don’ts

Question 4

What does the rule of law consist of?

Answer 4

• Transparency
• Predictability
• Stability
• Enforceability/accountability
• Due process (fair treatment)

Question 5

What are examples of competition laws in the EU?

Answer 5

• Traditional antitrust
• National monopolies, SGEIs, SGIs
• State aid
• Mergers & Acquisitions
• Public procurement