LLM EC Competition law - Essay Example

Within the UK Articles 81 and 82 EC have been incorporated into the Competition Act 1998 (CA). The aim of these articles and the CA is to prohibit agreements, business practices and behaviors that have, or are intended to have, a damaging effect on competition in the UK (in the EU for the EC Articles).1 Article 81 prohibits any dealings that will distort competition within the EU, which includes any agreement from insider trading through to companies discriminating to supply goods or services on the basis of preferential businesses.

The sale and supply of goods and services should be open to all members of the class that the company deals with. Also the sale of goods and services should be based on fair and open grounds, examples that the Office of Fair Trading and the EC use to illustrate anti-competitive agreements, in addition to cartels, include: The basis that the EC has used to identify what grounds are anti-competitive can arguably be determined as not economic, but more socially based. On economic grounds could such agreements as shown above not be a way to create a more competitive market, because if the present competitors agree to limit output does this not open the door for new businesses to open up in order for supply to meet the demand.

Therefore it is questionable whether the current system of law is really dealing with what is economically competitive on economic grounds3. This is even more apparent with Article 82 EC, which deals with identifying what equates to abusive behavior by a company in respect to EC competition law. In order to be abusive under the company must be in a dominant position, which raises a question on the fairness of this article because if a company is not in a dominant position why is it not abusive This seems to be more of a social rather than an economic factor, because it means that if you are NOT a powerful and dominant company you can do as you wish.

4 This illustrates that the grounds that EC law is determining on abuse in fact favors one sector of the economy over others, i.e. the underdogs. Is this not an abuse of competition law, because in certain instances dominant companies are a natural part of the industry's landscape, e.g. water, natural resources and fuel. This indicates that the current approach to determining a breach of competition law is in fact ironically a breach itself. The definition of dominance comes from the cases of United Brands5 and Hoffman-La Roche6 where the ECJ (European Court of Justice) defined the concept of dominance as:A position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers.

7It is commendable that the ECJ indicates the need to protect the interests of the consumer; however is this determination on the basis of the economic grounds of