Competition & the law

Introduction : Market economies are based on free trade,

free enterprise, and above all free competition, which is
seen as the best way to guarantee better goods and lower
prices for consumers. Fair competition however is not
natural and has to be protected by strict laws. Any business,
whatever its legal status, size and sector, must therefore
respect these laws, so it can meet its obligations, assert its
rights and defend its own position against unfair competition.
That is why collusions, cartels and monopolies are illegal and
mergers and acquisitions are strictly controlled by the law
and the antitrust authorities.
 Key concepts
● Trusts/cartels/collusion= the association of
large companies wishing to dominate the
market by agreeing and conspiring with each
other to fix prices, restrict supply and decide
beforehand (avant toute chose) who will win a
contract for example
● Most laws aim at preserving free competition as
the normal trade rule, build consumer
confidence in companies and markets and
prohibit monopolies (Cf Rockefeller & the
Standard Oil Company, late 1870s)
 COMPETITION LAW AND
ANTITRUST AUTHORITIES IN
THE EUROPEAN UNION
● As in most other countries, EU competition or
antitrust laws prohibit 2 main types of anti-
competitive activity.
● Anti-competitive agreements
● Abuse of dominant position
(being anti-competitive, social dumping is
prohibited throughout the EU)
ANTITRUST AUTHORITIES IN THE
UK
● In 1998, the Competition Act prohibits the
abuse of dominant position on the market in the
UK and all the practices associated therewith
(avec cela)
● 2002 : Enterprise Act, part 6 entitled Cartel
offence makes it a criminal offence to cerate
« business cartels » whereby companies agree
not to compete against one another.
● The CMA (Competition & Markets Authority)
has powers to take action and can impose fines
for businesses involved in these practices.
ANTITRUST AUTHORITIES IN THE
UK (2)
● With the CMA, directors may also be subjected
to fines and imprisonment or be disqualified.
● The Enterprise Act 2002 also makes it possible
for customers and competitors to sue
companies engaging in these practices.

● Ressources and websites

https://www.gov.uk/government/organisations/c
ompetition-and-markets-authority
ANTITRUST LAWS IN THE UNITED
STATES
● Contrary to what people say, the US market
economy is very strictly controlled and
regulated. In addition to state antitrust laws,
there are three major federal ones.

1°The Sherman Antitrust Act (dating back to

1890) guarantees a free market economy and
outlaws trusts, cartels, monopolies and other
combinations and conspiracies that restrain
interstate trade.
 ANTITRUST LAWS IN THE US
2°The Clayton Act is a civil statute passed in
1914 and amended in 1950. It prohibits
mergers or acquisitions that are likely to lessen
competition.

● 3° The federal Trade Commission Act (1914)

prohibits unfair methods of competition and
created the powerful Federal Trade
Commission (FTC), an independent antitrust
agency (Cf President Woodrow Wilson)
ANTITRUST AUTHORITIES IN THE
US
● Also called « trustbusters »
● They are very active : FTC (Federal Trade
Commission) lawyers protect consumers from
anti trust acts and unfair business practices.
Observe & comment
 (Source Library of Congress
● Taylor, Charles Jay, 1855-1929, artist
● Created / Published
● N.Y. : Published by Keppler & Schwarzmann,
1897 March 10.
● Key words : Uncle Sam (Symbolic character)--1890-1900
● Industrial trusts
● - Monopolies
● - Pickpockets
● - Corruption
● - Obliviousness
 Observe & comment (2)
Title of the cartoon : « in the hands of his
philanthropic friends »
● What do the 3 characters represent ?
● What do you know about the symbol of Uncle
Sam ?
● Why is the message at the bottom of the
cartoon ironic ?
 CONTRAVENTION OF THESE
LAWS
● Whether in the UK, EU or USA firms which
breach these laws can face hefty (=heavy,
serious) fines from the authorities, or expensive
actions for damages from customers and
competitors who can show that they have been
harmed by anti-competitive behaviour.
● In some cases, companies accused of being
monopolies have had to split (= se scinder).
 A few examples (1)
● In 2015, Google was split into several smaller
companies (Nest, Calico, and even Google)
which all became part of a big holding :
Alphabet.
● Individuals, even CEOs , may receive criminal
sanctions.
● A major issue today is the anti-competitive
attitude of the Big Tech corporations,called the
GAFA in Europe (Google, Amazon, Facebook &
Apple) : they have too much power and
influence thanks to their huge budget.
 A few examples (2)
● GAFA : also, the worldwide masses of data they
capture gives them power, and makes them
almost uncontrollable. The EU commission and
the Americans have tried to reduce their power,
in vain so far.
● Some actions are considered anti-competitive
in one country but not in another : for example
comparative advertising is unlawful in some EU
countries (France in particular), but authorised
in others such as in the USA.
 A few examples (3)
● Most countries, including China, now have
comparable laws. The WTO ( World Trade
Organisation) enforces antitrust laws around
the world to avoir unfair competition from
countries using child labour, sweatshops etc..