European Union Competition Law

European Union competition law arose out of the desire to ensure that the efforts of government could not be distorted by corporations abusing their market power. Hence under the treaties are provisions to ensure that free competition prevails, rather than cartels and monopolies sharing out markets and fixing prices. Competition law in the European Union is largely similar and inspired by United States antitrust. Four main policy areas include:

• Cartels, or control of collusion and other anti-competitive practices that affect the EU (or, since 1994, the European Economic Area). This is covered under Articles 101 of the Treaty on the Functioning of the European Union (TFEU).
• Monopolies, or preventing the abuse of firms' dominant market positions. This is governed by Article 102 TFEU. This article also gives rise to the Commission's authority under the next area,
• Mergers, control of proposed mergers, acquisitions and joint ventures involving companies that have a certain, defined amount of turnover in the EU/EEA. This is governed by the Council Regulation 139/2004 EC (the Merger Regulation).
• State aid, control of direct and indirect aid given by Member States of the European Union to companies. Covered under Article 107 of the Treaty on the Functioning of the European Union.

This last point is a unique characteristic of the EU competition law regime. As the EU is made up of independent member states, both competition policy and the creation of the European single market could be rendered ineffective were member states free to support national companies as they saw fit. Primary authority for applying EU competition law rests with European Commission and its Directorate General for Competition, although state aids in some sectors, such as transport, are handled by other Directorates General. On 1 May 2004 a decentralised regime for antitrust came into force to increase application of EU competition law by national competition authorities and national courts.