Here, too, trade is a social act. Anyone who undertakes to sell a description of property to the public does what affects the interests of other persons and society in general; and therefore, in principle, its conduct falls within the competence of the company. Both fairness and good quality of goods are most effectively ensured by leaving producers and sellers completely free, under the exclusive control of the same freedom as buyers to obtain supplies elsewhere. This is the so-called doctrine of free trade, based on reasons other than the principle of individual liberty affirmed in this essay, though equally solid. Restrictions on trade or production for commercial purposes are indeed restrictions; And any restraint, as restraint, is evil. [60] If you would like more information about the Agency`s work or if you would like to report an alleged antitrust violation, please contact us. For more information on how the office is organized and who to contact if you have a question about the contest, contact Inside BC. The Commission cannot represent individuals or businesses, and these resources are not intended to replace legal advice. Competition law is a law that promotes or attempts to maintain competition in the marketplace by regulating anti-competitive behaviour by businesses. [1] [2] Competition law is enforced through public and private enforcement.
[3] Competition law is historically known as antitrust law in the United States and “anti-monopoly” law in China[1] and Russia. In recent years, it was known as the Trade Practices Act in the United Kingdom and Australia. In the European Union, it is called both antitrust law[4] and competition law. [5] [6] Forms of abuse directly related to pricing include price exploitation. It is difficult to prove when the prices of a dominant firm become “exploitative”, and this category of abuse is rarely found. In one case, however, it was found that a French funeral home had charged operating prices, which was justified by the fact that prices for funeral services outside the region could be compared. [83] A more difficult issue is predatory pricing. This is the practice of lowering the prices of a product to such an extent that smaller competitors cannot cover their costs and go bankrupt. The Chicago School (company) considers predatory pricing unlikely. [84] In France Télécom SA v. Commission[85] had to pay USD 13.9 million to a broadband internet company for lowering its prices below its own production costs.
It has “no interest in charging such prices, other than eliminating competitors”[86] and is cross-subsidized in order to capture the lion`s share of a booming market. A final category of price abuse is price discrimination. [87] An example of this could be offering discounts to industrial customers who export your company`s sugar, but not to customers who sell their products in the same market as you. [88] First, it must be determined whether a firm is dominant or “to a significant extent independent of its competitors, customers and, ultimately, their consumers.” [75] Under EU law, very large market shares give rise to a presumption of dominance[76], which may be rebuttable. [77] Where an undertaking holds a dominant position, there is “a particular responsibility not to allow its conduct to affect competition in the common market”. [78] As with collusive practices, market shares are determined based on the market in which the company and the product in question are sold. Although the lists are rarely closed,[79] certain categories of abusive behaviour are generally prohibited by national law. For example, restricting production at a shipping port by refusing to increase spending and update technology could be abusive. [80] Linking a product to the sale of another product can also be considered an abuse, as it limits consumer choice and deprives competitors of outlets.
This was the case alleged in the Microsoft/Commission case[81], which ultimately resulted in a multi-million dollar fine for integrating Windows Media Player into the Microsoft Windows platform. Refusing to provide an essential facility for all companies attempting to request use may constitute abuse. One example was in a case involving a medical company called Commercial Solvents. [82] When Commercial Solvents created its own competitor in the TB drug market, it was forced to continue supplying a company called Zoja with the raw materials for the drug. Zoja was the only competitor in the market, so without the mandatory judicial offer, all competition would have been eliminated. The Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ) enforce federal antitrust laws. The FTC focuses primarily on specific segments of the economy, especially where consumer spending is high: healthcare, pharmaceuticals, professional services, food, energy, and high technology. However, the main objective of both agencies remains to protect the interests of consumers and to ensure that entrepreneurs have the opportunity to compete in the market economy. The Competition Office has developed various resources to explain its work. For an overview of the types of issues investigated by the Presidium, see Competition Counts. This guide to antitrust laws provides a more in-depth discussion of competition issues for those with specific questions about antitrust laws.
In the table below, you will find fact sheets on a variety of competition topics with case studies and frequently asked questions. In each section, you will find links to more detailed guidance developed by the FTC and the U.S. Department of Justice. Empirical studies generally identify what constitutes a significant reduction or barrier to competition. The market shares of the merging companies can be assessed and summed, although this type of analysis only leads to assumptions, not conclusions. [96] The Herfindahl-Hirschman index is used to calculate the “density” of the market or concentration. In addition to mathematics, it is important to consider the product in question and the rate of technical innovation in the market. [97] Another problem of collective dominance or oligopoly through “economic ties”[98] may arise, making the new market more conducive to collusion. Market transparency is relevant, as a more concentrated structure could make it easier for firms to coordinate their behaviour, whether firms can use deterrents and whether firms are immune to a reaction from competitors and consumers. [99] The entry of new businesses and possible barriers should be taken into account. [100] If it is demonstrated that companies are creating a non-competitive concentration, they can still argue in the United States that they are creating efficiencies sufficient to compensate for any disadvantage, and a similar reference to “technical and economic progress” is made in Article 2 of the Merger Regulation.
[101] Another defence could be that a company that is taken over is on the verge of collapse or bankruptcy, and that its takeover leaves a state no less competitive than what would happen anyway. [102] Vertical market mergers are rarely a concern, although the European Commission required in AOL/Time Warner[103] that a joint venture with its competitor Bertelsmann be terminated beforehand. EU authorities have also recently focused on the impact of conglomerate mergers, where companies acquire a broad portfolio of related products, but without necessarily dominant shares in a single market. [104] By 2008, 111 countries had adopted competition laws, representing more than 50% of countries with populations over 80,000. 81 of the 111 countries have adopted their competition laws in the last 20 years, reflecting the expansion of competition law following the collapse of the Soviet Union and the enlargement of the European Union. [41] Currently, competition authorities in many countries cooperate closely with foreign partners on a daily basis in their enforcement efforts, including in key areas such as information and evidence sharing. [42] The Clayton Act addresses specific practices that are not clearly prohibited by the Sherman Act, such as mergers and interlocking management (i.e., the same person making business decisions for competing companies). Section 7 of the Clayton Act prohibits mergers and acquisitions if they “may substantially lessen competition or create a monopoly.” As amended by the Robinson-Patman Act of 1936, the Clayton Act also prohibits certain discriminatory prices, services and allowances in merchant relations. The Clayton Act was amended again in 1976 by the Hart-Scott-Rodino Antitrust Improvements Act to require companies planning major mergers or acquisitions to notify the government in advance of their plans. The Clayton Act also allows private parties to bring an action for triple damages if they have been harmed by conduct that violates the Sherman Act or the Clayton Act, and to seek a court order prohibiting the anti-competitive practice in the future. In the European Union, Modernisation Regulation No 1/2003[49] means that the European Commission is no longer the only body capable of publicly enforcing EU competition law. This was done in order to allow for faster resolution of claims under competition law.
In 2005, the Commission published a Green Paper on damages actions for breach of the EU antitrust rules[50], which proposed ways to facilitate private antitrust actions for damages. [51] The course covers fascinating topics to explore that are also of great practical importance to consumers and businesses.