Law and Ethics 3.
Lecture 1. Refresher on law
Why do we need Law?
à Law enables:
- Cooperation
- Innovation
- Coordination
- Competition
- Efficiency
- Protection
EU law:
- Set of supranational legal acts regulating public and private relationships within the
European Union.
- Based on two EU constitutional acts: Treaty on European Union and Treaty on the
Functioning of the European Union.
Why EU law:
- EU is the 3rd largest economy
- We are in the EU
- 64% of all EU exports is the export from one country to another WITHIN THE EU.
- EU is a single market
- EU law is supranational
History of EU law:
- Need to promote peace and security after the WW II.
- Peace and security are not possible without some economic integration
- 1951 – Treaty of Paris, European Coal and Steel Community
- 1957 – Treaty of Rome, European Economic Community and European Atomic
Agency
- 1992/ 2007 – TEU (Treaty on European Union)
- 2007 – Treaty of Rome amended and renamed to TFEU (Treaty on the Functioning of
the European Union)
Sources of the EU law:
- TEU and TFEU
- EU Regulation
- EU Directive
- EU Framework Decisions and decisions
- EU Commission’s soft law (how soft is soft law?
- EU case law (very influential)
Scope of the EU law:
- EU institutional design
- Four freedoms
- Competition law
,Content of the EU law:
Unique institutional design:
- European Council: leaders of the EU
- European Parliament – directly elected MEPs
- European Commission – appointed by the national governments
- Court of Justice
- Multiple other bodies originating from TEU and beyond it
Four freedoms (of movement):
- Goods: customs duties (28-30 TFEU), taxation (36, 110 TFEU), free movement of
imports and exports (34-35 TFEU);
- Persons: free movement of citizens (20-21 TFEU), free movement of workers (45
TFEU);
- Services: freedom of establishment (49 TFEU), freedom to provide and receive
services (56 TFEU);
- Capital: free movement of capital and payments (63 TFEU)
, Lecture 2. Competition law à
What is competition law?
à Competition Law is a set of norms which prevent monopolies and maintain fair competition
at the market.
Why competition law?
A lack of competition and monopolies present a danger to the market, in particular, to the EU
single market
What is a monopoly?
- A position in which one company produces for entire market or industry
- Occurs when a single seller occupies the entire market, the sold good is unique and
substantial barriers restrict the entry to the market
- Represent an ultimate form of the market failure
Why monopoly is bad:
- Means no market and, thus, no market incentives
- Monopolist can...
o ... Establish any price
o ... Supply an inferior product
o ... Fail to innovate
What competition law does:
- Prohibits companies to enter into agreements limiting competition
- Prevents very big companies from abusing their position
- Prevents governments from distorting the competition
- Prevents monopolies from occurring through merger control
- Recognizes the necessity of some monopolies
History of competition law:
- Competition law first appeared in the common case law doctrine of restraint of trade
- The restraint of trade doctrine challenged the contractual restrictions of the freedom
to conduct business
- Now: competition rules in many countries – from China to Canada, from Russia to the
US
EU: cartelization and war
- One of the oldest EU regimes
- Originated after the World War II
- Before World War II governments supported cartels
- In Germany steel cartel supported and helped the Nazi regime
EU: European coal and steel community
- After the war, the production of coal and steel in both France and Germany was to be
placed under a High Authority, with the participation of other European countries.
- The creation of the European Coal and Steel Community aimed at prevention of
cartels
Scope of competition law:
- The US Sherman Act preceded the EU regime
- But the EU regime is more developed
- We’ll cover the EU competition law
- The competition rules have similar basics across the world despite different sources
and understanding of effects
Lecture 1. Refresher on law
Why do we need Law?
à Law enables:
- Cooperation
- Innovation
- Coordination
- Competition
- Efficiency
- Protection
EU law:
- Set of supranational legal acts regulating public and private relationships within the
European Union.
- Based on two EU constitutional acts: Treaty on European Union and Treaty on the
Functioning of the European Union.
Why EU law:
- EU is the 3rd largest economy
- We are in the EU
- 64% of all EU exports is the export from one country to another WITHIN THE EU.
- EU is a single market
- EU law is supranational
History of EU law:
- Need to promote peace and security after the WW II.
- Peace and security are not possible without some economic integration
- 1951 – Treaty of Paris, European Coal and Steel Community
- 1957 – Treaty of Rome, European Economic Community and European Atomic
Agency
- 1992/ 2007 – TEU (Treaty on European Union)
- 2007 – Treaty of Rome amended and renamed to TFEU (Treaty on the Functioning of
the European Union)
Sources of the EU law:
- TEU and TFEU
- EU Regulation
- EU Directive
- EU Framework Decisions and decisions
- EU Commission’s soft law (how soft is soft law?
- EU case law (very influential)
Scope of the EU law:
- EU institutional design
- Four freedoms
- Competition law
,Content of the EU law:
Unique institutional design:
- European Council: leaders of the EU
- European Parliament – directly elected MEPs
- European Commission – appointed by the national governments
- Court of Justice
- Multiple other bodies originating from TEU and beyond it
Four freedoms (of movement):
- Goods: customs duties (28-30 TFEU), taxation (36, 110 TFEU), free movement of
imports and exports (34-35 TFEU);
- Persons: free movement of citizens (20-21 TFEU), free movement of workers (45
TFEU);
- Services: freedom of establishment (49 TFEU), freedom to provide and receive
services (56 TFEU);
- Capital: free movement of capital and payments (63 TFEU)
, Lecture 2. Competition law à
What is competition law?
à Competition Law is a set of norms which prevent monopolies and maintain fair competition
at the market.
Why competition law?
A lack of competition and monopolies present a danger to the market, in particular, to the EU
single market
What is a monopoly?
- A position in which one company produces for entire market or industry
- Occurs when a single seller occupies the entire market, the sold good is unique and
substantial barriers restrict the entry to the market
- Represent an ultimate form of the market failure
Why monopoly is bad:
- Means no market and, thus, no market incentives
- Monopolist can...
o ... Establish any price
o ... Supply an inferior product
o ... Fail to innovate
What competition law does:
- Prohibits companies to enter into agreements limiting competition
- Prevents very big companies from abusing their position
- Prevents governments from distorting the competition
- Prevents monopolies from occurring through merger control
- Recognizes the necessity of some monopolies
History of competition law:
- Competition law first appeared in the common case law doctrine of restraint of trade
- The restraint of trade doctrine challenged the contractual restrictions of the freedom
to conduct business
- Now: competition rules in many countries – from China to Canada, from Russia to the
US
EU: cartelization and war
- One of the oldest EU regimes
- Originated after the World War II
- Before World War II governments supported cartels
- In Germany steel cartel supported and helped the Nazi regime
EU: European coal and steel community
- After the war, the production of coal and steel in both France and Germany was to be
placed under a High Authority, with the participation of other European countries.
- The creation of the European Coal and Steel Community aimed at prevention of
cartels
Scope of competition law:
- The US Sherman Act preceded the EU regime
- But the EU regime is more developed
- We’ll cover the EU competition law
- The competition rules have similar basics across the world despite different sources
and understanding of effects
