In addition to ensuring effective competition, it is the main objective of the EU competition rules to secure that the measures undertaken by companies do not prevent the free movement of goods, services and capital from one member state to another. The objective is to prevent the distortion of competition in the internal market, to ensure that the market functions as effectively as possible, and hence promote the prosperity of consumers and the competitiveness of the European economy. The EU competition rules are applied to a competition restraint felt in the EU region, if the restraint may significantly affect the trade between the Member States. This so-called trade criterion may also be fulfilled in cases where all the parties involved come from a single Member State.
The EU competition rules prohibit e.g. the abuse of dominant position and cartels, as does the Finnish national legislation.
For more on the EU competition policy, please see the homepage of the Commission’s Directorate General for Competition.
The implementing regulation of competition rules and Articles 101 and 102 of the Treaty on the functioning of the European Union
The application of EC competition rules underwent a major change as of 1 May 2004 when the new implementing regulation (Council Regulation (EC) No 1/2003) entered into force. The implementing regulation contains procedural rules on how to apply the main EU competition provisions, i.e. Articles 101 and 102 of the Treaty on the functioning of the European Union (TFEU) (previously Articles 81 and 82 of the EC Treaty). The content of the Articles remained the same both in the implementing regulation and the Treaty of Lisbon, which entered into force on 1 December 2009.
The reform of the implementing regulation also entailed changes in the national competition legislation. The objective of the reform of the national Act was e.g. to unify the operating environment of the companies by harmonising the national competition regulation with the EU competition rules. The new Act on Competition Restrictions (318/2004) entered into force at the same time with the implementing regulation on 1 May 2004.
After the reform of 1 May 2004, Articles 101 and 102 TFEU are applied by both the Commission and the national competition authorities. The articles are applied to all competition restrictions which are considered to have a significant impact on the trade between the member states. When drafting cooperation agreements, Finnish companies are advised to carefully acquaint themselves with the content of the above-mentioned Articles and the block exemption regulations, notices and guidelines issued by the Commission.
Article 101 TFEU is an extensive prohibition of all agreements and concerted practices distorting competition between undertakings. The Article is applied to both horizontal competition restraints (cartels) and vertical agreements such as distribution agreements. Article 102 prohibits the abuse of dominant position.
TFEU 101(1) prohibits all agreements and concerted practices between undertakings which may prevent, restrict or distort competition. The prohibited restraints include price-fixing between competitors, agreements on production quotas or sharing of markets, and the conditions on RPM or limitations on clientele which may be contained in distribution agreements.
Under Article 101(3), however, the provisions are inapplicable if the benefits override their anti-competitive impacts. The prohibited agreements may be beneficial for competition e.g. if they boost production or the distribution of goods or promote technical or economic progress and if the consumers may be considered to benefit from the agreements.
The evaluation of the benefits and drawbacks of the arrangements referred to in 101(3) is primarily the responsibility of the companies themselves. This is because the previously applied prior notification and exemption systems were waived in the context of the reform. When making the assessments, however, companies have access to the Commission's EU block exemption regulations, notices and guidelines.
Over the years, the Commission has granted block exemptions to several types of agreements whose beneficial effects it has generally found to exceed the harm caused to competition. If a cooperation agreement between companies is covered by such an exemption, Article 101(3) of the Treaty applies without further measures, i.e. the agreement is considered lawful. Block exemptions have been awarded to vertical agreements, specialising agreements and R&D agreements.
More on the Commission's antitrust legislation on the homepage of the DG for Competition.
The Commission is also responsible for monitoring the impacts of concentrations with a so-called community dimension. If a concentration exceeds the turnover thresholds defined in the so-called EC Merger Regulation on the control of concentrations between undertakings (139/2004) (pdf), the acquisition shall be notified to the European Commission, who has the sole power to investigate.
The new EC Merger Regulation entered into force on 1 May 2004. It prescribes that the Commission may intervene with a concentration which would significantly impede effective competition in the European single market or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position. The Commission may either block the entire concentration or demand that the companies modify the arrangement to avoid a dominant position.
The Merger Regulation and the related documents can be found on the Commission's homepage.
The Treaty on the functioning of the European Union contains special provisions on the Member States' activities regarding public enterprises and companies to which they award special or exclusive rights (Article 106). The Commission may also intervene with state aids distorting competition within the EU (Articles 107-109). In Finland, the Commission's contact authority regarding state aids is the Ministry of Employment and the Economy.
The contact information for the Commission's Competition Directorate General and the various departments can be found at DG's contact page.
last modified 2/17/2012