Part 2b - Competition Law Flashcards
1
Q
What does competition law do? (2)
A
- It bans anti-competitive agreements between firms such as agreements to fix prices or to carve up markets.
- It makes it illegal for business to abuse a dominant market position
- Anti-monopoly law is another term
2
Q
Objective of EU competition law
A
- Achieving a highly competitive social market economy by means of removing barriers to trade
- The market must be open for smaller companies
- Must remain an open market
3
Q
Market power
A
- Refers to a firm’s ability to raise price and/or restrict output while facing positive demand
- Dominance: Position of power that allows the company to make decisions independently from customers AND competitors.
4
Q
Indicators to establish market power or dominance:
A
- Market share and relative market share
- Absence of potential competition
- Barriers to enter the market - Deep pockets (well funded)
- Technical and distributional advantages
5
Q
The basis of EU competition law is found in 2 main sources
A
- Treaty of European Union (TEU)
- Treaty of the Functioning of the European Union (TFEU)
6
Q
What is a treaty?
A
This is a legally enforceable agreement between two or more states/countries.
7
Q
Article 101 TFEU
A
Article 101 TFEU
- Prohibits cartels and other agreements that could disrupt free competition.
- Free flow of goods, capital, services and people (No import issues / costs)
This article prohibits coordination between undertakings.
8
Q
Article 102 TFEU
A
- Prohibits abuse of market power by an undertaking
- Regulates monopolies
○ Preventing entities engaged in economic activity who hold a dominant position in a market, from abusing that position.
9
Q
Article 107 TFEU
A
- Concerns the legality of any potential aid that might be granted to entities engaged in economic activity.
- This prevents the distortion of competition.
- No factoring certain enterprises by the states.
