European Union Competition Policy

7 Pages 1863 Words

European Union Competiton Policy

The European Union (EU) has had a direct and profound effect on the economies of member states. The main objective of the EU is to enhance the allocational efficiency of the economies of the member states by removing barriers to the movement of goods, services, and production . The regulation of competition is administered by the EU’s competition policy. The aim of the policy is to create and maintain a system permitting undistorted competition within an economic region . The notion of pure competition in the EU is governed by The European Commission. They are the guardians of competition and exist within the structure of competition policy. The importance of a policy regulating competition was recognized early, and explicitly outlined in Articles 85-94 in the Treaty of Rome . The purpose was to prevent private economic actors and national public authorities from dividing up the large European market, thus jeopardizing or even canceling the benefits of integration . Nonetheless, even in the most ideal economic conditions, economists accept that perfect competition cannot be achieved. Consequently, the concept of ‘workable competition’ has been developed. Although not perfect, firms and governments are encouraged to work towards the most competitive structure possible. This structure can be achieved by policing business within the European Union, and thereby eliminating practices deemed as anti competitive. The EU competition policy secures the benefits of European integration by effectively regulating anti competitive practices, namely monopolistic behavior, mergers and state aids, however does not ensure that Europe will remain competitive in international markets. One of the most commonly recognized forms of anti competitive activity is monopolistic behavior. Identified as a company who has established a dominant position in its respective industry, and abuses their position in a manner that ...