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Overview of the EU’s competition policy

Overview of the EU’s competition policy. PhDr. Jan Havlík M.A. Politics and Policies of the European union 12. 4. 2007. Outline. Why do we need competition policy? DG Competition The three pillars of EU Competition Policy DG Competition: Decision Making Process State aid Seminar activity.

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Overview of the EU’s competition policy

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  1. Overview of the EU’s competition policy PhDr. Jan Havlík M.A. Politics and Policies of the European union 12. 4. 2007

  2. Outline • Why do we need competition policy? • DG Competition • The three pillars of EU Competition Policy • DG Competition: Decision Making Process • State aid • Seminar activity

  3. Why do we need competition policy? • Competition Policy ensures that markets • remain competitive (antitrust / anti-cartel enforcement / merger control) • become competitive (liberalisation) • Competitive markets • produce benefits for consumers • lead to technological innovation • Competition policy enhances consolidation • of the Internal Market • Competition policy contributes to ensuring the • competitiveness of European industry

  4. DG Competition • Structure of DG COMP – Commissioner Neelie Kroes (NL), Director General Phillip Lowe, individual sectors (e.g.. Cartel, Services, etc.) • DG COMP & Member States’ competition authorities(e.g. CZ: Úřad pro ochranu hospodářské soutěže, GB: Office of Fair Trading)

  5. EU Competition Policy ANTITRUST Restrictive agreements and concerted practices MERGER CONTROL Abuse of a dominant position and control of mergers STATE AID Undue State intervention

  6. ANTITRUST • Art. 81 EC : Agreements which cause an appreciable restriction of Competition, such as e.g. price fixing or market sharing (and affect trade between Member States) • Art. 82 EC : Behaviour which constitutes an abuse of a dominant position, such as e.g. tying or discrimination (and affects trade between Member States).

  7. MERGER CONTROL • Merger Control : (Art. 2 of Regulation No 4064/89) Operation which creates or strengthens a dominant position which impedes effective competition.

  8. STATE AID - 1 • State Aid: (Art. 87 of the EC Treaty) Any aid granted by a Member State which distorts competition by favouring certain undertakings, in so far as it affects trade, shall be incompatible with the common market

  9. STATE AID - 2 • EC Treaty provisions (Art. 87, 88, 89) • State Aid is in principle incompatible with the common market • State Aid can be accepted only in exceptional cases, specified in the Treaty (exemptions from the ban on State aid) • Commission controls the application of these exemptions • Rationale : • Avoid distortion of competition within the internal market • Contribute to sound public finances • Promote economic and social cohesion

  10. STATE AID - 3 Four criteria defining State aid: • Granted by a Member State or through State resources in any form whatsoever • Advantage that distorts competition • Selectivity • Effect on trade between Member States

  11. The Decision Making Process - 1 The Commission can take action through different ways Notification Ex-officio Complaint Investigation

  12. The Decision Making Process - 2 Investigation  Statement of Objections  Hearing  Advisory Committee  Commission Decision  Judicial Review (Court of First Instance, Court of Justice)

  13. Fines imposed by the EC since 2002

  14. Highest cartel fines imposed(1969 – 2007)

  15. Further information http://europa.eu.int/comm/competition/index_en.html

  16. Thank you for your attention.

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