Competition law
Competition policy and competition law- Theoretical foundations
Fundamentals
The emergence of a market-economy
Competition is the engine of growth for an efficient economy
Laissez-faire – The invisible hand theory (Adam Smith)
The motivation of people grants us with products
The market regulates itself
When there is a cap on the price of the product there is usually a shortage
Industrial Revolution
21st century – large companies, trusts, cartelisation
Competition produced more products
Companies became stronger and stronger
Regulatory demand
- Unprecedented market power
- Identifying welfare loss (ruling out everyone out of the field/industry)
- Need for institutionalised (competition policy)
Why is monopolizing a field is bad?
- Development decreases
The role of economics in competition policy
- Evaluation of monopolization
- The concept of monopoly profit
- Curve showing the way the monopoly´s quantity of selling products would decline
- SVT model and IO appearance
- Deadweight loss
- It is more accessible to people and cheaper
- Monopoly takes away the possibility to grant accessibility of the product to people who
otherwise would not have (luxury becomes commodity)
- All companies have to have access to the market
International Background
First laws in the USA
- Sherman Act (1890)
- Clayton Act (1914)
European Law
- Competition policy and the concept of the single market
- Protection of free competition has been fundamental part of the EU Treaties
Claims against Google and Facebook (they are trying to divide them because they are too big)
Domestic Development
- Act V of 1923 on Unfair Competition
Purpose and scope of the Competition Act
Preamble
Purpose of the law
Framework for the toolbox
Case law: tying of products (browsers)
Other default browsers had to be provided by Windows
Have to grant access to other companies
The competitive pressure made the quality of the other companies better
Consumer protection
- Unfair (misleading/aggressive) commercial
- Comparative advertising
- Defrauding business customers
