Recent developments in European and Czech competition law Prague, 7 November 2008 INTRODUCTION Tomasz Kramer LL.M. Course directorAcademy of European Law - ERASection II - European Business LawMetzer Allee 4, D-54295 TrierPhone: +49 651 9 37 37 20Fax: +49 651 9 37 37 90www.era.int
Why do we need competition law? • What is competition? • Basic economic rationale for protection of competition • Goals of competition policy • Current situation
Economic rationale for protection of competition Monopoly – is sub-optimal – DWL and the consumers get less products and at higher prices Competition maximises efficiency, welfare and serves consumers with the lowest possible prices
Goals of competition policy • Enhance efficiency – maximisation of welfare by allocative / productive / innovative or dynamic efficiencyQ: total welfare or consumer welfare? • Market integration • Consumer protection, new and better products, bigger choice • SMEsQ: Not efficiency but equity/fairness? Q: Should competition law protect competition or competitors? • Other „horizontal“ consideration? Environment, social policy, industrial policy...
European framework for the competition law • Article 81 TEC • Prohibition of cartels under Article 81(1) (unlike exemption under 81(3) ) • Prohibition of any agreements of undertakings which distortion of competition. However, exemption under 81(3) is possible for pro-competitive ventures.
European framework for the competition law • Article 82 TEC • Prohibition of abuse of dominant position by the undertakings. • Recent debate on the economic sense of the said provision. • Consequence – focus on exclusionary abuses i.e. those conducts of dominant firms which lead to exclusion or elimination of fringe competitors from the market e.g. predatory pricing, (and not on exploitative ones which are inherent to the dominant firms).
European framework for the competition law • Merger Control • Prohibition of M&A, fusions concentrations, certain JVs which could lead to impediment of competition e.g. by way of creating a dominant firm.
Modernisation of competition law More economic approach Regulation 1/2003 Decentralisation of competition law – e.g. no more notification to the European Commission of agreements in order to benefit from Art. 81(3) TEC exemption, but self-assessment. Increased role of National Competition Authorities and national judges. Also new merger regulation, State Aid Action Plan, reform of art. 82 TEC etc.
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