Competition Law
1.1. Competition Law - Introduction
1.2. Competition Law – The EU Law Substantive Provisions
1.3. Statutory Construction
1.4. Exemptions to Competition Law Provisions Abuse of Dominant Position
1.5. Enforcement of Articles 101 and 102
1.6. Other Areas of Competition Law
, 4. Section Four – Competition Law
4.1 Competition Law - Introduction
Competition law could be seen as the law of ‘economic wrongs’. It addresses the rules of economic
operators in markets, although in liberal economies competition law does not extend to economic
direction.
o Recall here Adam Smith’s economic theory that an economic system works best on a laissez
faire system of economics. This will ensure the benefit of economic welfare of the nation. In
such a system, competition is a good thing as it maximises economic welfare.
o Economic welfare is not the protection of the consumer but rather the protection of the
market. If the market is wealthy, then it will maximise consumer welfare – e.g. freedom of
choice, innovation, best prices.
If competition is desired, why regulate the market? Only the Chicago school believe absolutely in the
unfettered freedom of the market. Most recognise that the market can have flaws – in certain
circumstances, the market fails in its promise and in such scenarios it is legitimate to step in and do
something.
o Thus there are certain rules which it is legitimate to impose upon market operators. In the UK
this is termed competition law, in America ‘antitrust’ law and the law of concurrence in
Europe.
(see h/o) Modern competition law was born from American antitrust law, in particular the Sherman
Act 1890 (see h/o). This law was received to the UK through Germany which in turn received it from
America.
o In order to ensure that national socialism did not recur, Americans imposed competition law.
Attributed to this competition law was the German economic miracle of the 1960s and 70s.
o The German competition law (Gesetz gegen Wettbewerbsbeschränkungen) was in turn
incorporated into the EEC treaty. Recall that most of the provisions of the treaty are
addressed to the member states - but there required to be some provisions addressing relations
between private actors.
It was thought that without the competition rules in the treaty, the creation of a single
market would be pointless.
o The competition rules of the Treaty are therefore a corollary of the rules on the free
movement of goods, persons, services and capital. Indeed, the Court of Justice has said that
EU competition rules are ‘...so essential that without [them] numerous provisions of the
Treaty would be pointless’ (Case 6/72 Europemballage Continental Can v. Commission). At
the same time, in a market economy, competition rules are seen by liberal economists to be
beneficial in themselves, as they are claimed to ensure the greatest economic efficiency and
benefit to the consumer, and, for good or ill, the Union Treaties are thirled to liberal
economics. Article 119 TFEU:
‘1. For the purposes set out in Article 3 of the Treaty on European Union, the activities of the Member States and the
Union shall include, as provided in the Treaties, the adoption of an economic policy which is based on the close
coordination of Member States’ economic policies, on the internal market and on the definition of common objectives, and
conducted in accordance with the principle of an open market economy with free competition.’
1.1. Competition Law - Introduction
1.2. Competition Law – The EU Law Substantive Provisions
1.3. Statutory Construction
1.4. Exemptions to Competition Law Provisions Abuse of Dominant Position
1.5. Enforcement of Articles 101 and 102
1.6. Other Areas of Competition Law
, 4. Section Four – Competition Law
4.1 Competition Law - Introduction
Competition law could be seen as the law of ‘economic wrongs’. It addresses the rules of economic
operators in markets, although in liberal economies competition law does not extend to economic
direction.
o Recall here Adam Smith’s economic theory that an economic system works best on a laissez
faire system of economics. This will ensure the benefit of economic welfare of the nation. In
such a system, competition is a good thing as it maximises economic welfare.
o Economic welfare is not the protection of the consumer but rather the protection of the
market. If the market is wealthy, then it will maximise consumer welfare – e.g. freedom of
choice, innovation, best prices.
If competition is desired, why regulate the market? Only the Chicago school believe absolutely in the
unfettered freedom of the market. Most recognise that the market can have flaws – in certain
circumstances, the market fails in its promise and in such scenarios it is legitimate to step in and do
something.
o Thus there are certain rules which it is legitimate to impose upon market operators. In the UK
this is termed competition law, in America ‘antitrust’ law and the law of concurrence in
Europe.
(see h/o) Modern competition law was born from American antitrust law, in particular the Sherman
Act 1890 (see h/o). This law was received to the UK through Germany which in turn received it from
America.
o In order to ensure that national socialism did not recur, Americans imposed competition law.
Attributed to this competition law was the German economic miracle of the 1960s and 70s.
o The German competition law (Gesetz gegen Wettbewerbsbeschränkungen) was in turn
incorporated into the EEC treaty. Recall that most of the provisions of the treaty are
addressed to the member states - but there required to be some provisions addressing relations
between private actors.
It was thought that without the competition rules in the treaty, the creation of a single
market would be pointless.
o The competition rules of the Treaty are therefore a corollary of the rules on the free
movement of goods, persons, services and capital. Indeed, the Court of Justice has said that
EU competition rules are ‘...so essential that without [them] numerous provisions of the
Treaty would be pointless’ (Case 6/72 Europemballage Continental Can v. Commission). At
the same time, in a market economy, competition rules are seen by liberal economists to be
beneficial in themselves, as they are claimed to ensure the greatest economic efficiency and
benefit to the consumer, and, for good or ill, the Union Treaties are thirled to liberal
economics. Article 119 TFEU:
‘1. For the purposes set out in Article 3 of the Treaty on European Union, the activities of the Member States and the
Union shall include, as provided in the Treaties, the adoption of an economic policy which is based on the close
coordination of Member States’ economic policies, on the internal market and on the definition of common objectives, and
conducted in accordance with the principle of an open market economy with free competition.’
