Why competition law?

• Economic performance• Social welfare• Well being of consumers

Perfect competition

• Very large number of buyers and sellers all producing identical/homogenous products

• Consumers have perfect information about products and markets

• No barriers to entry or exit the market• Theoretical model

Barriers to entry

• Costs• Technology• Financial• Demand• Legal barriers

Monopoly

• Only one producer• No substitute products• Barriers to entry• Licences• Legal monopoly• Natural monopoly

Economy of scale

• Fixed costs• Variable costs• Marginal costs

• Economy of scale

Why is monopoly not good?

• View and behaviour of customers• Natural economic behaviour• Indispensable business partner• No competition• No innovation

• Market economy vs. Planned economy

Workable competition

• Imperfect competition• The best society has invented• Low barriers to entry• Information to consumers• Various schools• Competition policy – What are goals of competition

Against competition

• Does it always work?• Does it work in all sectors?– Nature of activity

• Cutting costs might influence safety• No protection of consumers• Do all countries need it ? – matter of priorities

• Competition is reality

What is competition law

• Agreements• Abuse of dominance• Control of concentrations• Liberalization • State aids

Objectives of competition law • Workable competition• No prevention, restriction or distortion of competition• Low prices• Good quality• Protection of consumers• Economic efficirency• Protection of competitors• Protection of SMEs• Economic development of all geographical areas• Employment• Freedom of contract• Competitivness on other markets• Democratic values • Protection of internal market

internal market

free movement of goods

(Art 28 TFEU)

freemovement of persons

(45-48 TFEU)

state aids(Arts 107-109)

freemovementof capital

(63-66)

free movement ofservices and rightof establishment

(49-62)

competition law(Arts 101-106)

prohibition of discrimination on ground of nationality – Art 18

Competition law and other areas of law

• Competition law is public law• Unfair competition• Contract law/commercial law• Criminal law• Administrative law • Protection of consumers• Public procurement• Procedure

Competition law and related policies

• Competition law and economics• Competition law and economy• Competition law and trade and industrial

policy• Competition law and political goals

History of competition law

• Darcy vs. Allein (Case of monopolies), Court of King’s bench, 1602

• US antitrust law– Sherman act– Clayton act

• Germany and Japan between WWI and WWII• EU (EEC)

Sherman Act• "Section 1. Every contract, combination in the form of trust or

otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine....

• Section 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine...."

Contemporary competition law

• More than 100 jurisdictions• International (transnational) competition law• EU + EEA • Association agreements • European competition network• Bilateral agreements• International competition network

EU competition law

• Internal market context• Sources – TFEU– Regulations– Notices– Guidelines– Best practices– Decisions of EC– Judgments of General court and Court of Justice– Annual reports of the Commission

EU and accession

• Utmost importance of competition law – harmonisation

• Stabilisation and association agreement• Importance of implementation• Practice• Administrative capacity• Application of european law before accession?• Art 74 Croatian Competition act

Competition law vs regulation

• Liberalisation• Services of general economic interest• Services of general interest• Art 106/2 TFEU • Art 14 TFEU

Enforcement of competition law

• Competition authorities• Courts• Public enforcement• Private enforcement

• Art 66 CA• Art 67 CA

• General and sectoral competition law

Competition agency

• Public authority• Competition council• Independence, autonomy, no political

influence from executive branch – why?– Can it work?– Examples

• appointment

Competences of competition agency

• Substantive• Procedural• General – policy issues• Initiation of proceedings ex offo• Arts 41-46 CA• Collection of information• Interim measures• Imposing of fines

Protection of parties in the proceedings

• Statement of objections• Right of access to file• Business secret• Oral hearing• Court review

Definition of undertaking