EC Competition Law

EC law competition law derives from arts. 81 to 89 of the Treaty of Rome. Those  provisions regulate the following categories of anti-competitive behaviour:

	antitrust
	mergers, and
	state aids

This article is concerned with Community "antitrust" law.

Antitrust

Antitrust is a term derived from § 1 Sherman Act, 15 U.S.C which declares illegal every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce. In this context, it refers to restrictive agreements and practices and abuses of dominant positions.

Institutions
EC competition law is enforced by the Competition Directorate-General of the European Commission and the competition authorities of the member states. The principal competition authorities for the UK are the Office of Fair Trading and the Competition Commission.

Art. 81 EEC: Agreements, Decisions and Concerted Practices
Agreements, decisions and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition are prohibited by art. 81 (1) of the Treaty of Rome if and in so far as they may affect trade between EC member states unless exempted by art. 81 (3). Examples of such agreements, decisions or concerted practices are those that:

	directly or indirectly fix purchase or selling prices or any other trading conditions
	limit or control production, markets, technical development, or investment
	share markets or sources of supply
	apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, or
	make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Any such agreements or decisions are automatically void.

Exemptions
Art. 81 (3) EEC permits exemptions from art. 81 (1) where the agreement or decision contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit. Such exemption is conditional upon the absence of restrictions that are not indispensable to the attainment of these objectives or that afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products in question.

Art. 82 EEC: Abuse of Dominant Position
Any abuse by one or more undertakings of a dominant position in the common market or a substantial part of it is prohibited by art. 82 of the Treaty of Rome as incompatible with the common market if and in so far as it may affect trade between member states.

Enforcement
The Treaty of Rome requires the European Commission to ensure that those provisions are enforced. Up to 30 April 2004 the Commission was the only entity in the EC capable of granting exemptions from art 81 (1) under art 81 (3). It still enjoys wide investigative powers and enforcement powers, including the power to impose substantial fines on undertakings infringing those provisions. Since 1 May 2004, national competition authorities have shared those powers and have been primarily responsible for enforcing EC competition law within their territories by virtue of the Modernization Regulation (Council regulation (EC) No 1/2003 of 16 Dec 2002). Arts 81 and 82 EEC also create rights that are enforceable in proceedings before national courts and tribunals.

Construction of Treaties

The Treaty of Rome is to be construed in a uniform manner in accordance with all the translations of the relevant text (see Wire Netting Case (C-219/95 P Ferriere Nord SpA v Commission [1997] ECR I-04411, Bestuur der Sociale Verzekeringsbank v J. H. van der Vecht [1967] ECR. 354) and Srl CILFIT and another v Ministry of Health  [1982] ECR 3415). The uniform application of Community law could not be derailed by an apparent discrepancy in the translation of one of the texts.
 

 

Important