European Community Law - Competition

Value for consumers and greater competitiveness in the European Industry

Competition in the marketplace is a simple and efficient means of guaranteeing consumers products and services of excellent quality at competitive prices. Suppliers (producers and traders) offer goods or services on the market to meet their customers' demands. Customers seek the best deal available in terms of quality and price for the products they require. The best deal for customers emerges as a result of a contest between suppliers.

Competition policy aims to ensure wider consumer choice, technological innovation and effective price competition, thus contributing to both consumer welfare and to the competitiveness of European industry. This is achieved by ensuring that companies compete rather than collude, that dominant companies do not abuse their market power and that efficiencies are passed on to final consumers.



Ensuring effective competition
There are many major areas of action concerning the European competition policy:

Antitrust & cartels: The elimination of agreements which restrict competition (e.g. price-fixing agreements, or cartels, between competitors) and of abuses by firms who hold a dominant position on the market.

Merger control: The control of mergers between firms (e.g. a merger between two large groups which would result in their dominating the market).

Liberalisation: introducing competition in monopolistic economic sectors (e.g. telecommunications).

State aid control: The control of state aid measures by Member State governments to ensure that such measures do not distort competition in the Common Market (e.g. the prohibition of a state grant designed to keep a loss-making firm in business even though it has no prospect of recovery).

Abuse of dominant Position: The aim is to prevent companies with a dominant position in their economic sector from abusing this position and from distorting competition in intra-Community trade. This aim requires preventive intervention to investigate company mergers, since these may create dominant positions.

Concerted practices: A system ensuring that competition in the internal market is not distorted. Thus in the three areas of application of these rules (concerted practices, abuse of dominant position, use of Monopoly practises and state aid), prohibition is limited to practices that have an impact on trade between Member States and excludes those that only affect trade within a State.


The role of the European Commission
Investigation procedures: The Commission has considerable powers to investigate suspected abuses of competition law. The rights of parties under investigation are guaranteed, as is their commercial confidentiality.
 
Penalties for anti-competitive activities: Commission policy would be ineffective if its monitoring and control activities were not accompanied by decisions and penalties. The Commission has considerable powers to prohibit anti-competitive activities, to issue injunctions against, and to impose fines on firms found guilty of anti-competitive conduct. The amount of these fines varies according to the gravity and duration of the anti-competitive activities. It may be as much as 10% of the firm's worldwide turnover.

In state aid cases, the Commission has the power to require that illegally granted aid be repaid by recipients to the public authorities, which granted it.

National and European competition laws
The European Commission has been entrusted by Member States with the power to deal with competition matters at Community level. In some cases, this power is shared with the Member States' own competition authorities and law courts, while in other cases, the authority lies exclusively with the Commission.

Community competition law does not enter into play until such time as trade between Member States is affected by the practices in question. For example, a price-fixing agreement between local companies in a given town will not have any impact on the Community market, and European law is therefore not applicable to this kind of situation.

Most Member States, however, also have their own domestic laws to counter anti-competitive practices. This makes it possible to take action under national law against practices, which do not have any impact on trade between Member States. Enforcement of national competition law is the responsibility of the Member State concerned.

Legal basis of the European competition policy.
The Treaty on European Union states in its principles that the Community's Member States are to adopt an economic policy "conducted in accordance with the principle of an open market economy with free competition". European competition policy is based on a Community legislative framework essentially provided by the EC Treaty (Articles 81 to 90). Further rules to be applied to merger control are provided by a Council regulation (Regulation 4064/89) known as the "Merger Regulation".

Appealing against commission decisions.
All Commission decisions are subject to judicial review by the Community's legal system. An appeal against a Commission decision may be lodged with the Court of First Instance or the Court of Justice of the European Communities.

Prof. Asprogerakas Grivas & Partners in Law has extensive experience in appealing against a Commission decision from basic disputes to difficult, protracted cases. Moreover, we have deep experience to file complaints against European Union member states or other companies operating within the EU for unfair competition practices. Our commitment to our clients is reflected in the longstanding nature of many of our client relationships. We are dedicated to providing not only legal expertise and sound judgment, but timeliness, responsiveness and accessibility with great success in the difficult field of EU law and EU Competition law.
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