Competition policy

 

Institution Definition

Competition puts businesses under constant pressure to offer the best possible range of goods at the best possible prices, because if they don’t, consumers have the choice to buy elsewhere. In a free market, business should be a competitive game with consumers as the beneficiaries. Sometimes companies try to limit competition. To preserve well-functioning product markets, authorities like the Commission must prevent or correct anti-competitive behaviour. To achieve this, the Commission monitors:

  • agreements between companies that restrict competition – cartels or other unfair arrangements in which companies agree to avoid competing with each other and try to set their own rules;
  • abuse of a dominant position – where a major player tries to squeeze competitors out of the market;
  • mergers (and other formal agreements whereby companies join forces permanently or temporarily) – legitimate provided they expand markets and benefit consumers;
  • efforts to open markets up to competition (liberalisation) – in areas such as transport, energy, postal services and telecommunications. Many of these sectors used to be controlled by state-run monopolies and it is essential to ensure that liberalisation is done in a way that does not give an unfair advantage to these old monopolies;
  • financial support (state aid) for companies from EU governments – allowed provided it does not distort fair and effective competition between companies in EU countries or harm the economy;
  • cooperation with national competition authorities in EU countries (who are also responsible for enforcing aspects of EU competition law) – to ensure that EU competition law is applied in the same way across the EU. © European Commission
 
A B C D E F G H I J L M N O P R S T U V