Competitive Policy
Short paper Joost Roelofs
The competitive police in the European Union.
There has been an competitive policy for over 40 years in the EU, this was founded in a response of a request by the European parliament. While the economic environment changed there was a treaty founded which prohibit certain anticompetitive agreements and abuses of dominant positions, with this treaty the European Union tried to avoid abuse of the powers great companies have. This competitive policy, where customers can choose between competitors, puts businesses under constant pressure to offer the best possible range of goods at the best possible prices. In a free market, business should be a competitive game with consumers as the beneficiaries. ( European Commission, 2011)
With my paper I am trying to answer these questions: What is competitive policy and what are the economic principles behind this policy. I will discuss the tools that the European Union has to keep this competitive environment and come up with examples. In the second paragraph of the main part I will discuss the economic principles behind competitive policy. Based on this I will make an conclusion about the competitive policy in the European Union.
To make sure companies follow the rules of this competitive policy the European Union has certain tools, they monitors companies that operate in the European Union and fine those who don’t follow these rules and support markets to create an competitive environment.
The European Union monitors:
- agreements between companies that reduces competition, for instance forming a cartel with companies within the market you operate, this has happened with beer brewers in the past, these beer brewers were fined for making agreements about the height of their prices.
- abuse of a dominant position, In March 2006, the Norwegian group Tomra was fined by the European Commission for 24 million euros. The company had abused its dominant position in the market for the
The competitive police in the European Union.
There has been an competitive policy for over 40 years in the EU, this was founded in a response of a request by the European parliament. While the economic environment changed there was a treaty founded which prohibit certain anticompetitive agreements and abuses of dominant positions, with this treaty the European Union tried to avoid abuse of the powers great companies have. This competitive policy, where customers can choose between competitors, puts businesses under constant pressure to offer the best possible range of goods at the best possible prices. In a free market, business should be a competitive game with consumers as the beneficiaries. ( European Commission, 2011)
With my paper I am trying to answer these questions: What is competitive policy and what are the economic principles behind this policy. I will discuss the tools that the European Union has to keep this competitive environment and come up with examples. In the second paragraph of the main part I will discuss the economic principles behind competitive policy. Based on this I will make an conclusion about the competitive policy in the European Union.
To make sure companies follow the rules of this competitive policy the European Union has certain tools, they monitors companies that operate in the European Union and fine those who don’t follow these rules and support markets to create an competitive environment.
The European Union monitors:
- agreements between companies that reduces competition, for instance forming a cartel with companies within the market you operate, this has happened with beer brewers in the past, these beer brewers were fined for making agreements about the height of their prices.
- abuse of a dominant position, In March 2006, the Norwegian group Tomra was fined by the European Commission for 24 million euros. The company had abused its dominant position in the market for the
References: European Commission. (2011). Report on competition policy 2010. Brussels. European Comission. (2012, March 16). What is competition policy. Opgehaald van ec.europa.eu: http://ec.europa.eu/competition/consumers/what_en.html European Commission. (2012, March 24). Why is competition policy important for consumers. Opgehaald van Ec.europa.eu: http://ec.europa.eu/competition/consumers/why_en.html F. Maier-Rigaud and D. Vaigauskaite. (2006). Competition Policy. Newsletter number 2, 19. pearson, M., & best, J. (2004, March 24). Opgehaald van CNET: http://news.cnet.com/EU-slaps-record-fine-on-Microsoft/2100-1001_3-5178281.html