Competition Laws in Europe

The antitrust laws in the EU has their roots in the pro-competitive measures that were adopted by some European countries like France, Germany, Italy, and Benelux during the early 1950s. The Treaty of Paris which was signed into law the same year prohibited the trade practices as well as distorted pricing of goods sold across the six countries which were to later become the members of the European Economic Community.

Following the antitrust laws of US, European Union has also enacted some competition laws, so that the efforts of the government to ensure growth in business sector are not distorted by corporations, that are both domestic (EU countries) and international businesses, that have their operations in European Union countries. Competition laws are different from those of U.S. antitrust laws, as the US laws were enacted at different points of time and with a different set of objectives. However, there is no denying in the fact that the antitrust policies of EU have been inspired to a certain extent by the time tested antitrust policies of US. Competition laws in Europe are meant to bring the ideals of establishing a single market for EU as an end result. In order to achieve this objective, appropriate actions and careful concern should be taken, so that none of the companies, which are involved in operating in the EU area, abuse their power to repress competition, because as soon as the company enters the area of EU, the laws and regulations of EU automatically cover that company.

Competition laws of Europe have four key policy issues, which are stated below:

• The first policy is related to the control of collusion by businesses and other anti-competitive practices that impact the EU. This policy is mainly covered under the Articles 101 of the Treaty on the Functioning of the European Union
• The second policy is related to the prevention of abuse due to the dominant position of a firm. In this respect, the EU laws are stricter and apply to firms that have 38 percent of market share when compared with the U.S. laws that are effective only when a company’s market share crosses 60 percent. The percent of market shares that companies need to cross to be regulated under the anti-competition laws of EU are governed by Article 102 of TFEU
• The third key policy of the competition laws in EU is related to the prevention of mergers and acquisitions between two companies that have a significant market share and turnover. The Council Regulation 139/2004 EC governs this policy.
• The last major policy of the competition laws of EU relates to the control of the state aid that is given by the governments of EU to individual companies. This policy is controlled by the Article 107 of Treaty on the Functioning of the European Union (TFEU).

Competition Commissioner

The European competition commissioner plays the role of the Federal Trade Commission in Europe, where he (or she) acts as the chief antitrust enforcer for the E.U. EU’s competition commissioner is appointed by the president of European Commission who carries the status of the Chief Administrative official for the whole of EU. Being the chief in charge of competition laws in EU, the competition commissioner has responsibilities towards key competition related matters like mergers between the companies, cartels, state aid, commercial competition, and anti-trust law.