Introduction To Competition Law Notes

Exam is mainly UK and EU based, while US is mainly MCQ. There may occasionally be a few marks to comment on US system in the main exam.

Outcomes

1. Explain the purpose of competition law

2. Identify the main institutions that direct policy, investigate anti-competitive behaviour and impose penalties for its breach

3. Explain the basic legislative framework of competition law

4. Identify and appreciate the significance of market definition and its impact on market share

5. Research and advise a client on an issue relating to market definition

Outcome 1 – purpose of competition law

• Main purpose is to protect the consumer

• Competition law is concerned with the functioning of markets and the maintenance of free market policies

• Theory of free market states that businesses operating in a competitive market will provide greater benefits to society as a whole than businesses that are protected from competition (e.g. those owned by the state)

• Economists understand competition at its simplest as the basic interaction between the supply of products and services to the market (for example, from manufacturers and traders) and demand for those products and services (for example, from raw material purchasers and final consumers)

• Competition is considered by many to be the best way to ensure that suppliers deliver the best response to this demand

Outcome 2 – institutions that direct policy, investigate and impose penalties

EU Law

The following play a significant role in the field of competition law as provided for by the TFEU:

• the Council of the European Union;

• the European Commission;

• the European Parliament;

the Council of the European Union (the ‘Council’)

• Composed of one minister from each Member State

• The Council is responsible for ensuring that the Treaty’s objectives are attained, and is, with the European Parliament, the main legislative body of the EU

• Ensures the coordination of policies and, above all, takes decisions within the EU

• It is the Council rather than the Commission which is usually responsible for the final decision as to whether a piece of legislation should be passed (however, in the field of competition law, the Council has delegated much of its decision-making powers to the Commission)

the European Commission (‘the Commission’)

• The Commission pursues infringements of EU law

• It can take action before the European Court of Justice (see below) against Member States which breach EU law

• Also responsible for initiating European policy and legislation generally

• There are currently 28 Commissioners, each of whom is responsible for a particular area of EU competence

• The Commission is divided into 37 Directorates. DG COMP (formerly DG IV) is the Directorate that is responsible for competition law and is considered as one of the most important Directorates within the Commission

• In the field of competition law, the Commission has been granted extensive powers to enforce EU competition policy, including the power to exact fines for any breach

The Court of Justice of the European Union (CJEU)

• Set up to ensure EU law is observed throughout the Union

• 2 of the 3 courts of CJEU hear competition cases (ECJ and General Court)

UK Law

Main authority under the UK regime is the Competition and Markets Authority (CMA) provided for by the Enterprise and Regulatory Reform Act 2013 (which merged the Competition Commission and the competition functions of OFT)

CMA

• The CMA investigates and prosecutes infringements under both the CA 1998 and Articles 101 and 102 TFEU

• Also concerned with the initial evaluation of mergers under the EA 2002

• The CMA provides information to businesses and legal advisers on its application of the UK’s competition regime, as well as information on how to avoid breaches and the promotion of competition policy

Specialist sectoral regulators

• Have powers (concurrent powers) to investigate breaches of the CA 1998 and Articles 101 and 102 TFEU

• Regulators have been appointed to oversee certain sectors of the economy (most of which were formerly under public control)

• E.g.

  • include the Gas and Electricity Markets Authority (OFGEM), which regulates gas and electricity supply

  • Office of Communications (OFCOM), which deals with the telecommunications industries

  • Water Services Regulations Authority (OFWAT), dealing with the water industry

Both the CMA and regulatory bodies are subject to appeals:

US Law:

The US Department of Justice (‘DOJ’)

• Headed by the Attorney General, a member of the President’s cabinet

• Reporting directly to the Attorney General is an Assistant Attorney General for the Antitrust Division, who has responsibility for both criminal and civil enforcement of the federal antitrust laws

The Federal Trade Commission (FTC)

• Has responsibility for the civil enforcement of the anti-trust laws

• FTC is set up to operate independently of the President’s administration (unlike the DOJ)

• The Commission comprises five members, appointed to staggered seven-year terms

• No more than three Commissioners may belong to the same political party

Private plaintiffs

• Authorised by the Clayton Act, and by its counterparts under most state laws, to bring private suits for damages and for injunctions

• Unlike in Europe, private anti-trust suits are prevalent in the United States. They play a major role in anti-trust enforcement

The attorneys general of the states

• Responsible for both criminal and civil enforcement of the anti-trust laws of their respective states

• In addition, the state attorneys general have a right to bring civil suits under federal antitrust laws based upon injury to state government, to citizens of the state or to the general economy of the state

International cooperation

The United Nations Conference on Trade and Development (‘UNCTAD’)

• Adopted a voluntary non-binding code in 1980, which sets out suggested core principles to be adopted in systems of competition law

• It has also produced a model competition law as a guideline for countries adopting a competition law regime for...

Buy the full version of these notes or essay plans and more in our International Competition and Anti-Trust Notes.