Competition law (definition)
Competition law is a set of norms which prevent monopolies and maintain fair competition at the market
Monopoly (definition)
A position in which one company produces for an entire market or industry
Why is a monopoly bad?
no competition -> limits innovation, monopolist can charge any price it wants or stop production, the quality will be less important and the customer pays for it all
What does competition law? (5)
- Prohibits companies to enter into agreements limiting the competition
- Prevents very big companies from abusing their dominant position
- Prevents governments from distorting the competition
- Prevents monopolies from occurring through merger control
- Recognizes the necessity of some monopolies
Sources of the EU competition law (4)
- TFEU 101 -109 + Protocol no. 27 on the internal market and competition
- The Merger Regulation (Council Regulation (EC) No. 139/2004)
- European Commission delegated acts and soft law
- ECJ case law
Enforcement of EU competition law is done in two ways:
- Ex ante approval of mergers and state aid (reviewing before transaction)
- Ex post investigations (under 101, 102 and 107)
Article 101 TFEU prohibits: (5)
- Undertakings and associations of undertakings to
- Enter in the agreements or engage in concerted practices or make decisions
- Which may affect trade between member states
- Which have as their object or effect the prevention, restriction or distortion of competition within the internal market
- Unless such agreements contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share fo the resulting benefit
Undertakings (definition)
Undertakings are entities engaged in economic activity
Pro-competitive effects (3)
- Block exemptions (pro-competitive effects are generally considered to overweigh anti-competitive effects)
- Individual exemptions (pro-competitive effects of the individual agreement overweigh the anti-competitive effects)
- De minimis (anti-competitive effects are insignificant)
Article 102 TFEU prohibits (3)
- Undertakings to
- Abuse
- Their dominant position
The element of dominance includes two sub-elements:
- Product and geographical market
- Share
SSNIP test
Small but Significant and Non-transitory Increase in Price
Abuse (4)
- Unfair prices or conditions
- Limitation of production supplies or technical development
- Discrimination (different prices in similar contracts)
- Tying (imposition of unnecessary service)
