Why Do We Have Competition Law

Today, the Treaty of Lisbon prohibits anti-competitive agreements in Article 101(1), including prices. In accordance with Article 101(2), such agreements are automatically null and void. Article 101(3) provides for exceptions where the collusion is intended for distribution or technological innovation, gives consumers a `fair share` of the benefit and does not include unreasonable restrictions that could eliminate competition anywhere (or that are compatible with the general principle of Union law on proportionality). Article 102 prohibits abuses of a dominant position[37], such as price discrimination and exclusive distribution. In accordance with Article 102, European Council regulations may regulate mergers between companies (the current Regulation is Regulation (EC) No 139/2004). [38] The general test is whether a concentration (i.e., a merger or acquisition) with a Community dimension (i.e. a number of EU Member States) could significantly impede effective competition. Articles 106 and 107 provide that the right of Member States to provide public services is not impeded, but that, otherwise, public undertakings must respect the same principles of competition as undertakings. Article 107 establishes a general rule according to which the State may not assist or subsidize private parties in the distortion of free competition and provides for exceptions for charitable organizations, regional development objectives and in the event of a natural disaster. [Citation needed] The English common law of restriction of trade is the direct precursor of modern competition law, which was later developed in the United States. [23] It is based on the prohibition of agreements contrary to public policy, unless the relevance of an agreement has been demonstrated. It has effectively banned agreements to restrict someone else`s trade.

1414 Dyer`s is the first known restrictive trade agreement to be audited under English common law. A dyer had given bail not to practise his trade in the same city as the plaintiff for six months, but the plaintiff had promised nothing in return. When Judge Hull heard the plaintiff`s attempt to enforce this restriction, he exclaimed, “Per God, if the plaintiff were here, he would have to go to jail until he had paid a fine to the king.” The court refused to charge a deposit for the dyer`s breach of contract because the agreement was considered a trade restriction. [24] The English courts then decided a number of cases, which gradually developed competition-related jurisprudence, which was eventually converted into legal law. [25] Under EU law, when a UK company engages in unfair trading practices as part of a cartel or attempts to join forces in a way that would disrupt the market, EU law applies exclusively. Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits agreements between undertakings, decisions by associations of undertakings and concerted practices which are liable to affect trade between Member States and which have as their object the prevention, restriction or distortion of competition. . We have ordered and determined that no merchant or other confederation, conspiracy, coin, imagination or marbles or evil device may manufacture at any time that may oppose or relate to the removal, disruption, defeat or decomposition of such staple foods or anything related to them. Unlike the allocative, productive and dynamically efficient market model, there are monopolies, oligopolies and cartels. If there is only one or a few companies on the market and there is no credible risk of competing companies entering, prices exceed the level of competition, whether at a monopoly or oligopolistic equilibrium price.

Production is also reduced, which further reduces social assistance by creating a windfall effect. The sources of this market power [by whom?] include the existence of externalities, barriers to entry and the problem of the stowaway. Markets cannot be effective for a variety of reasons, so the exception to competition law intervention in the laissez-faire rule is justified if government failure can be avoided. Orthodox economists fully recognize that perfect competition is rarely seen in the real world, and therefore strive for what is called “viable competition.” [63] [64] This follows the theory that if one cannot achieve the ideal, one chooses the second best option[65] using the law to tame market activity when possible. .