Market Definition
ECONOMICS AND THE THEORY OF COMPETITION
a) Free market
• Businesses provide greater benefit to society as a whole than businesses protected from
competition (state-owned enterprises).
b) Consumer expectations
• Competition ensures that suppliers deliver the best response to consumers' demands in terms of
stimulating efficient production and allocation of resources, as well as high quality and low price
of goods and services for customers.
c) The 'perfect competition model'
• It is comprised of a large number of small independent suppliers, all on a level playing field,
subject to the same competitive pressures from each other and customers.
• Given that there are so many suppliers, they must use their respective resources efficiently and
provide customers with what they want in order to ensure their survival.
d) 'Monopoly' market
• One single supplier, the monopolist, controls an entire market.
• He is able to act as it wishes, to the benefit of its own profits and the detriment of other players in
that market, such as consumers.
SOURCES OF EU COMPETITION LAW
a) Article 101 TFEU
• Prohibits agreements between undertakings, decisions by associations of undertakings and
concerted practices;
• They may affect trade between MS;
• They have the object or effect of prevention, restriction or distortion of competition within
the internal market.
b) Article 102 TFEU
• Prohibits any abuse by one or more undertakings of a dominant position.
• This is in so far as it may affect trade between MS.
c) Merger Regulation 139/2004
ECONOMICS AND THE THEORY OF COMPETITION
a) Free market
• Businesses provide greater benefit to society as a whole than businesses protected from
competition (state-owned enterprises).
b) Consumer expectations
• Competition ensures that suppliers deliver the best response to consumers' demands in terms of
stimulating efficient production and allocation of resources, as well as high quality and low price
of goods and services for customers.
c) The 'perfect competition model'
• It is comprised of a large number of small independent suppliers, all on a level playing field,
subject to the same competitive pressures from each other and customers.
• Given that there are so many suppliers, they must use their respective resources efficiently and
provide customers with what they want in order to ensure their survival.
d) 'Monopoly' market
• One single supplier, the monopolist, controls an entire market.
• He is able to act as it wishes, to the benefit of its own profits and the detriment of other players in
that market, such as consumers.
SOURCES OF EU COMPETITION LAW
a) Article 101 TFEU
• Prohibits agreements between undertakings, decisions by associations of undertakings and
concerted practices;
• They may affect trade between MS;
• They have the object or effect of prevention, restriction or distortion of competition within
the internal market.
b) Article 102 TFEU
• Prohibits any abuse by one or more undertakings of a dominant position.
• This is in so far as it may affect trade between MS.
c) Merger Regulation 139/2004
