The European Union competition law aims to provide a fair trading environment for businesses and consumers by placing restrictions on companies and governments. It focuses on eliminating unfair market advantages, private cartels, monopolies, mergers, and unjust state aid. The European Commission oversees the enforcement of these regulations.
Competition law of the European Union, or EU, is the law governing the power of companies and other entities in Europe. Seeking to provide a fair trading environment for businesses and consumers within EU member states, the European Union places various restrictions on companies and governments. European Union competition law is overseen by the European Commission.
Competition law exists to ensure that business is conducted fairly and openly. Commercial competition is considered a central tenet of capitalism because competition ensures that consumers receive the best possible product at the lowest possible price.
In European Union competition law, the main objective is to eliminate the unfair market advantage of any company. An important element of this is the focus on private cartels or agreements between companies in the same sector. Cartels collude by engaging in anti-competitive practices for the benefit of all companies involved.
A cartel can violate EU competition law by fixing prices, by setting minimum prices for the same product sold by different companies, which drives up prices. Cartel members may also agree to produce only a certain amount of a particular product, making the product scarcer and driving up prices. Cartels can also collude on contractual terms with non-cartel members, which gives them an advantage.
EU competition law also aims to ensure that monopolies do not occur within the EU. A monopoly is the dominance of an industry by a single company, making it very difficult, if not impossible, for smaller companies to become competitive. A company may be allowed to hold a majority market share as long as it does not abuse that power by driving out competitors.
Monopolies can also occur when companies in the same field merge. Mergers and acquisitions are heavily regulated in the EU to ensure they do not give rise to monopolies. European Union competition law scrutinizes all proposed mergers, acquisitions and joint ventures to make sure big companies aren’t simply trying to reduce competition.
Another important element in EU competition law is to ensure that no company receives unjust state aid. As the EU was created to allow for borderless business within member states, any company receiving funding from a government would automatically put all other EU companies at a disadvantage. While some assistance from governments may be permitted, it is strictly regulated by the EU to ensure it does not become anti-competitive.
Protect your devices with Threat Protection by NordVPN
