The prohibition in Article 101(1) is not absolute. Article 101(3) TFEU provides for a derogation from the prohibition laid down in Article 101(1) where an agreement, although fundamentally anti-competitive, offers advantages (such as the improvement of production or distribution or the promotion of technical or economic progress) which do not affect competition, provided that: This summary provides an overview of Union competition law. According to Mill, there has been a shift in economic theory that has emphasized a more precise and theoretical model of competition. A simple neoclassical model of free markets states that the production and distribution of goods and services in competitive free markets maximizes social prosperity. This model assumes that new companies can freely enter markets and compete with existing companies, or to use legal language, there are no barriers to entry. By this term, economists mean something very specific that competitive free markets offer allocative, productive and dynamic efficiency. Allocative efficiency, also known as Pareto efficiency, according to Italian economist Vilfredo Pareto, means that in the long run, the resources of an economy go to those who are willing and able to pay for it. Since rational producers will continue to produce and sell, and buyers will buy up to the last possible marginal unit of production – or rational producers will reduce their production to the margin with which buyers will buy the same quantity as that produced – there is no waste, the greater number of desires of the greatest number of people will be satisfied and the profit will be perfected, because resources can no longer be redistributed to make someone better. without aggravating anyone else; The company has achieved the efficiency of allocation.
Productive efficiency simply means that society earns as much as it can. Free markets are meant to reward those who work hard, and therefore those who push society`s resources to the limit of their possible production. [61] Dynamic efficiency refers to the idea that companies that are constantly competing must research, create and innovate in order to maintain their share of consumers. This goes back to the idea of the Austro-American political scientist Joseph Schumpeter that an “eternal storm of creative destruction” always sweeps through capitalist economies and leaves corporations at the mercy of the market. [62] This led Schumpeter to argue that monopolies did not need to be broken (as with Standard Oil) because the next storm of economic innovation would do the same. `Entrusting to an undertaking which places telephone equipment on the market the task of drawing up specifications for such devices, monitoring their application and granting them acceptance shall amount to conferring on it the power to determine, at will, which equipment may be connected to the public network, thereby giving it a clear advantage over its competitors: this undermines equal opportunities for entrepreneurs, without which the existence of an undistorted system of competition cannot be guaranteed. Such a restriction of competition cannot be regarded as justified by a public service of general economic interest. [118] The content and practice of competition law varies from jurisdiction to jurisdiction. The protection of consumers` interests (consumer protection) and the ensuring that traders have the opportunity to compete in the market economy are often seen as important objectives.
Competition law is closely linked to the Law on Deregulation of Market Access, State Aid and Subsidies, the privatization of State assets and the establishment of independent sectoral regulators, as well as other market-oriented supply-oriented policies. In recent decades, competition law has been seen as a way to provide better public services. [10] Robert Bork argued that competition laws can have negative effects if they restrict competition by protecting inefficient competitors and if the costs of legal intervention are higher than the benefits to consumers. [11] In a truly competitive market, consumers benefit from price competition, stronger product development, improved specifications and better quality of service between competitors. Competition law deals with agreements or practices that actually or potentially distort competition in a market in a way that is ultimately detrimental to the consumer. Examples of prohibited or risky practices between a company and its competitors from the point of view of EU competition law are listed below. These are called “horizontal problems” because they occur between companies operating at the same level in the supply chain. Most horizontal infringements of competition law are considered to be “object” infringements and are therefore among the most serious forms of infringement. The CJEU`s main competition law cases include Consten & Grundig v Commission and United Brands v Commission. Setting up a cartel case and carrying it out is not an easy task for law enforcement authorities.
EU competition law therefore provides for certain incentive mechanisms to increase the efficiency of the enforcement process: as part of the establishment of the ASEAN Economic Community, the Member States of the Association of Southeast Asian Nations (ASEAN) have committed to adopting competition laws and policies by the end of 2015. [44] Today, all ten Member States have general competition law. Although there are still differences between the Regulations (e.B. as regards the rules on the notification of merger controls or the leniency reporting system)[45] and it is unlikely that there will be a supranational competition authority for ASEAN (similar to the European Union)[46], there is nevertheless a clear trend towards an increase in infringement procedures or antitrust enforcement decisions. [47] The following describes some of the practices of a dominant undertaking that may infringe EU competition law. The development of early competition law in England and Europe progressed with the dissemination of writings such as Adam Smith`s The Wealth of Nations, which first established the concept of a market economy. At the same time, industrialization replaced the individual craftsman or group of craftsmen with paid workers and mechanical production. Economic success increasingly depends on maximizing production while minimizing costs.
As a result, the size of a company became increasingly important and a number of European countries responded by enacting laws regulating large companies that restricted trade. After the French Revolution of 1789, from 14 to 17 June 1791, the law declared null and void the agreements of the members of the same trade which determined the price of an industry or a work, unconstitutional and contrary to freedom. Similarly, the Austrian Penal Code of 1852 stipulated that “agreements […] to increase the price of a commodity. to the detriment of the public should be punished as an offence”. Austria passed a law in 1870 that abolished sanctions, although these agreements remained null and void. In Germany, however, agreements between companies on price increases have been clearly validated in the laws. During the 18th and 19th centuries, ideas were developed in Europe that dominant private companies or legal monopolies could unduly restrict trade. However, when a depression spread across Europe in the late 19th century, known as the Panic of 1873, ideas of competition fell out of favor, and it was believed that companies had to work together by forming cartels to resist the enormous pressure on prices and profits. [30] Agreements with competitors not to purchase from a specific supplier or service provider also carry a risk of compliance with competition. Although it is perfectly legitimate to make a unilateral decision on which supplier to buy from, there may be competition concerns if such issues are discussed between competitors and a common response (e.g.
B a boycott) is agreed. From the point of view of competition law, a merger or acquisition implies the concentration of economic power in the hands of less than before. [90] This usually means that one company buys the shares of another […].