The European Union Competition Law - Assignment Example

Introduction Many wonder at the ability of as many as 28 countries to operate together as a single political and economic unit, specifically, the European Union. However, a closer look at the European Union reveals that a well crafted law, the European Union Law reveals the secret of the successful and orderly running of the European Union and its political and economic interests. In itself, the European Union (EU) Law denotes a body of legislation and treaties such as EU Directives and Regulations which have both direct and indirect effects on the laws and operations of the EU member states. One of the EU Laws that direct the laws and operations of the EU member states is the European Union Competition Law. This law emerged from the need to ensure that efforts of the EU member states’ government are not curtailed by corporations which are abusing the market power due to them. In this light, the treaties under the EU Competition Law provide the prevailing of free competition in lieu of monopolies and cartels taking over the market through price fixation and market-sharing it among themselves. Historical Underpinnings of the EU Competition Law There are several themes that drove the creation of the EU Competition Law. The themes include: the influence of global and local competition laws on the formation and development of the EEC Competition Law; the internal ideologies, dynamics and tension within the Commission’s Competition Directorate General (DG IV); and, the role of the EU Court of Justice in enshrining the protection of competitiveness as a principal pillar of the Common Market. The fact that EU member states’ courts have had to deal with consistent and inherent tensions among the rights of merger and cartel victims to lay claim on private damages in local courts for breaches of the EU Laws and proper enforcement of the Commission’s competition rules underscores the seriousness of the third theme and the need to enforce the EU Competition Law. The absence of the EU Competition Law meant that potential leniency applicants could not be certain if the information they submitted alongside their applications would be made accessible to a future claimant, (and) used against them, and thereby putting them in a feebler defensive position, to the advantage of the cartelists supposedly working in cohorts with the competition authority. EU Structures which Safeguard the EU Competition Law It is important to appreciate the fact that in order that the EU Competition Law is upheld, the EU has enshrined in its laws, a body which ensures the ratification, adherence to and the upholding of the EU Laws, specifically, the EU Competition Law. In light of the above, there is the European Competition Network (ECN) operates under the aegis of the European Commission and it also serves as the forum in which the national competition authorities in EU Member States operate with one another to ensure the facilitation and effecting of the EU Competition Law. The ECN creates an effective mechanism through which companies and business establishments which restrict fair competition through their cross-border practices are countered. ECN competition laws are applicable to all ECN members as the ECN accords the means by which consistent and effective application of the EU Competition Laws such as OJ 2006 C 298/17 are realised. The EU competition authorities consult and inform each other on proposed bills and decisions and gather board comments emanating from other competition authorities. In this manner, the ECN allows EU competition authorities to exact their experience and to identify with practices that are best for EU member states. The sitting members of the ECN also ensure that parties are engaged in cooperation and in the exchanging of best practices in merger control. This is done through the setting up of the EU Merger Group. The EU Merger Working Group was established in 2010, in Brussels and it is made up of the national authorities of the EU and the European Union Representatives. The national authorities of the EU review mergers by involving the NCAs from the European Economic Area. One of the principal functions of the Working Group is to strengthen increased consistency, cooperation and convergence among the EU merger jurisdictions. The mandate of this outfit is: identifying areas of possible improvements on matters arising in respect to mergers bearing cross-border impacts; exploring feasible solutions; drawing from the NCAs and EU Merger Working Group’s experience and practice; and focusing on the feasible within the existing legal frameworks, to ensure meaningful ratification of policies. In a closely related wavelength, there is also the European Competition Authorities (also abbreviated as ECA) which ensures and facilitates the exchange of information among participants of the multi-jurisdictional merger. Stipulations of the EU Competition Law The stipulations of the EU Competition Law have four principal policy areas. One of the policy areas is mergers, as previously mentioned. Specifically, European Council regulation 139/2004 EC, also known as Merger Regulation regulates proposed mergers and acquisitions and even joint ventures which involve business establishments which have specific amount of turnover in the EEA or EU. Another policy area is the regulation of cartels, as is specified in EU’s Article 101 of the Treaty on the Functioning of the EU. This article is also known as the TFEU. This treaty regulates collusion and other forms of anti-competitive practices among business establishments among the EU. The TFEU Treaty dates back to 1994 when it was crafted and exists under the auspices of the European Economic Area. This treaty ensures that cartels do not stifle room for fair competition to other smaller business competitors. The EU Competition Law also seeks to address market dominance within member states of the EU. The part of the EU Competition Law in which this function is enshrined is Article 102 of the Treaty on the Functioning of the EU. This treaty prevents firms operating within the jurisdiction of the European Union from abusing or misusing their dominance over the market. This EU law is also applicable to strong players which have market shares as little as 38%. This is unlike the US antitrust laws where the market share has to be at least 60% in order for an intervention to be made. This article also accords the European Commission the authority to handle all the matters touching on unfair competitive market practices. In another wavelength, the EU Competition Law also makes stipulations on state aid that is given within the EU jurisdiction. This function is enshrined in Article 107 of the TFEU and the Treaty of Establishing the EU (TEC). However, recent amendments have made TEC in general, ancillary to Article 107 of the TFEU. However, when TEC is treated specifically, it will be clear that Article 87 of TEC operates equivalently to Article 107 of TFEU. Specifically, the aid that is being controlled in this case is one that is extended to companies and other forms of business establishments by EU Member States. Conclusion References Blum, U. and Steinat, N., 2008, “On the rationale of leniency programs: a game-theoretical analysis”, European Journal of Law and Economics, 25 (3), 209 - 229 Stephan, A, 2009, “The Direct Settlement of EC Cartel Cases”, The International and Comparative Law Quarterly, 58 (3), 627 - 654 Read More