Author(s)
Robert D. Anderson and Alberto Heimler
Source
Aussenwirtschaft, Issue 4, 2007
Summary
This paper looks at the history of competition law in Europe.
Policy Relevance
Competition policy has kept prices low, supports innovation, and helps transition away from state practices that harm competition.
Main Points
- Competition means the rivalry between firms in markets, which helps consumers by lowering prices, improving choices and quality, and by spurring innovation. Competition policy is a set of rules that promote competition.
- EU competition policy originates with German and Austrian thinkers who saw law as necessary to support competition, and is distinct from “laisser faire.” Later, the goal of integrating myriad national markets and supporting peace influenced competition policy, taking legal form in the Treaty of Rome.
- During the late 1980s, European courts and regulators began to move away from formal rules that tended to restrict certain structures regardless of their effect, towards a closer examination of competition in each particular case. This brings the EU closer to approaches in the United States.
- There are reasons to believe that the remedy that European authorities imposed in the Microsoft case has helped innovation.
- Without competition policy, EU citizens would pay higher prices and suffer at the hands of cartels.
- Competition policy has helped end government practices that hurt competition, especially in telecommunications, electricity, railways, banking.
- Competition policy is still needed even with more global trade to combat international cartels and to bring competition to isolated markets.
