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International Relations: The EU Antitrust Policy at the International Level

Free «International Relations: The EU Antitrust Policy at the International Level» Essay Sample

Introduction

A policy refers to an initiative for actions that is undertaken by a person, a group, or government, while it can also be denoted as the set of principles on which these actions are based. Most evidently, antitrust policies are meant to discourage the emergence of disadvantageous cartels. As a result, competition is meant to be healthy and beneficial to the customers. In fact, competition helps the customers to purchase goods of high quality and timely products. Therefore, monopoly business such as trusts and cartels are discouraged both at local and international levels. Since the businesses are no longer local but have become international, there is a need to establish a commission that would control the competition among the business organizations (Blair & Sokol 2013). Talking about the competition law, it is widely regarded as the antitrust law across America and the entire Europe. The European Union (EU) has an obligation to insure that healthy competition is not violated by the anti-competitiveness of selfish and unscrupulous businesses. The paper explores the EU antitrust policy at the international level, including the duties and responsibilities that it has as well as its efficacy.

Brief History

The policy was structured by the Treaty of Rome in 1957, and one of its aims was to create a system that would safeguard free competition and give all businesses space to perform in the market. At that time, the policy focused mainly on the internal market, wishing to give the local market the freedom to perform. Apparently, the rules of activity can be obtained from articles 101 to 109 of the Treaty of Functioning of the EU (TFEU). In fact, they advocated for “highly competitive social market” (Carrubba & Gabel 2014). The strictest rules were contained in the article 101 and 102 of the Act (Steuer 2012). It is evident that the policy aimed at facilitating the existence of a single market. Thus, the freedom to the market was perceived as a benefit to the market itself.

Along with its strategies and plans, the policy has received great support from different countries. The policy was believed to be the standard regulatory framework that all countries (members) could be considered fairly. Apparently, it is believed to be derived from the constitutive legislative act known as Council Regulation 17/62 (Haufler 2013). The policy was formulated to act as the central regulatory authority in order to bridge the difference in the regulations that varied from country to country. In mid-1980s, the National Competition Authority realized the enormous workload that lied with the commission. In fact, it was a result of the increase in membership from 24 countries to 27 countries by the year 2007 (Blair & Sokol 2013). Due to the prolonged challenges, it becomes necessary for the commission to devise a strategy to decentralize the competition laws through the so-called modernization regulation. The derived council concluded that the National Crime Agency (NCA) and all member states court at the heart of Acts 101 & 102 (Carrubba & Gabel 2014). As a result, the European Competition Network was born. Thus, the network was mandated to oversee the relationship between the NCA and the member states’ courts. In such a way, all these changes were targeted at enhancing the ever-changing market competition to insure healthy competition is maintained (Haufler 2013).

Members and the Details of the Policy

The NCA receives and settles any disputes that arise from the member states and settles the discrepancies that occur due to the collisions triggered by the anti-competitive behavior of the concerned countries. The body, namely the European Competition Network, is comprised of the NCA from all member states and the commission. It is responsible for the effective division of competition-related work and application of the EU rules. Moreover, the commission, the EU, was entitled to give directives that were fair and just (Blair & Sokol 2013). Therefore, it is their responsibility to create an effective tool for cooperation between the cross-border business activities which obstruct competition. However, the countries concerned had to share information concerning their business activities to insure that coordination and evidence among other crucial items of nformation regarding competition is captured (Steuer 2012).

The Directorate General (DG) was the custodian of the policies aimed at preparing and implementing the decisions agreed by the college and the commissioner. The DG enforces the competition rules of the Article 101 to 109 of the TFEU (Carrubba & Gabel 2014), thereby acting as the mediator. Furthermore, it receives all the complaints from the member countries and tries to settle the disputes, mostly the ones violating the competition rules. The DG works with other international DGs to harmonize the international coherence and relations (Szerb, Acs & Autio 2013).

The European Parliament has recently intervened to manage competition legislation under the consultation procedure. The parliament advises the councils on the best amendments to implement. Moreover, it scrutinizes the commission with regard to their general activities since 1990. Recently, in 2013, the commission has been receiving discredit from some organizations, which questioned its strength to bring harmony within the international business transactions (Steuer 2012). As a result, the commission has been planning various changes that will lead to satisfactory directives among the key players concerned.

Deep Analysis of the Antitrust Policy at the International Level

The policy is based on two core legal provisions, namely Article 101 and Article 102 TFEU. Talking about Article 101, it forbids the agreement between two or more independent market operators that prohibit competition (Haufler 2013). The provision is inclusive of both market operators working at the same levels like wholesalers and those that work at different levels like the manufacturers and the wholesalers; thus, the level of production is taken into consideration. The objective of the provision is to discourage any form of strategy that prohibits efficient competition within any level (horizontal or vertical) that might frighten some of the businesses (Carrubba & Gabel 2014).

Article 102 concerns issues of abuse on the basis of a dominant position. It is obvious that dominance of certain position in business affects the overall competition. If a company exploits its market position to hinder competition by discriminating distributors, licensees or customers, it is therefore seen as a hindrance to competition as it has abused the position and, as a result, the article 102 of the council Act (Haufler 2013). Thus, being prudent, the council checks on the nature of the market share to determine whether the company is dominant.

The implementation rules are well-controlled and governed by the Council Regulation (EC) 1/2003 (Jones & Sufrin 2014). In fact, it dictates the investigative extent and powers of the commissions. Moreover, the antitrust rules are outlined in sector and conducts of specific regulations such as notices and guidelines. The commission may make decisions in accordance with stipulations of the Acts. Hereby, to resolve the issues of the market with regard to the regulations and the rules of the Articles 101 and 102, the commission may give two types of decision, either behavioral or strategic (Steuer 2012). Therefore, the commission accepts the commitments that may be offered by the key players only if they appear efficient and solve the matters at hand.

Generally, the EU competition policy craves cooperation and competition authorities outside the EU to insure that their decisions are firm and effective. As a result, the commission liaises with the external competition authorities outsides the EU with the aim of enhancing the convergence of the policy tools and practices that will enable strong cooperation and enforcement with different jurisdictions (Jones & Sufrin 2014). In fact, the mentioned cooperation may be bilateral or multilateral. In bilateral relationship such as the memorandum of understanding, it is stated the relationship between the EU cooperation and third party countries. It is important to note that the cooperation is elastic and is dependent on the participating countries. The parameters include the extent of information sharing, mutual notifications and competition policy dialogue (Szerb, Acs & Autio 2013).

In such kind of cooperation, everything is presented in the most transparent way possible. As a result of collaborattion, it is expected to build a common policy. A good example is the agreement that was lately signed by the EU and its respective third party in Switzerland in December 2013 (Carrubba & Gabel 2014). The commission has also participated in tackling competition-related activities within the framework of multinational organizations like International Competition Network (ICN), Organization for Economic Cooperation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) (Jones & Sufrin 2014). The objective of the cooperation is to promote policy convergence through brainstorming and exchange of critical information and ideas that affect the market. Apparently, the cooperation has been defined as a crucial component of the establishment of new fair and just market rules. As a result, it has enhanced the interoperability between the regimes. Recently, the bilateral relation has been signed at China and India in 2012 and 2013 respectively (Blair & Sokol 2013). Thus, this is a clear indication of how well the commission is embraced.

International Influence of the EU on Competition Law and Policy

Different studies have stressed that the international scope and involvement has been of significant benefit. Bilateral agreements like the EU-US agreement have been helpful, though they have failed to give comprehensive solutions to international practices which restrict competition (Papadopoulos, 2010). The bilateral agreement has brought easiness to negotiations on multilateral agreements on competition law and policy. Conclusively, it is possible to say that the bilateral agreements have been used by the EU to copy good competition skills from the best performing countries into other countries or trade partners that require the tactics (Haufler 2013). On the other hand, the multinational agreements that span globally have been seen to be following the same EU model rather than the North American Free Trade Association (NAFTA), which is a great achievement of the EU. The influence on World Trade Organization (WTO) is believed to be weak but is expected to attract their attention soon (Carrubba & Gabel 2014).

Policy Developments

Owing to the fact that the commission has been experiencing some difficulties in settling damages, the complaints from some countries such as the UK and Germany has necessitated the commission to undergo some advancement changes. In June 2013, the commission decided to propose a directive that would help harmonize the rules addressing the settlement of damages by the EU (Haufler 2013). Thus, the directive is expected to harmonize the private and public laws to devise an agreeable enforcement law on which the commission can be dependent.

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The commission has also simplified the procedures under the EU merger for assessing concentrations or combination of companies which lead to an important market share for the new entity. Consequently, this triggers “the so-called simplified process to review unproblematic mergers by raising market thresholds for candidates for such a procedure” (Carrubba & Gabel 2014).

Some of the issues the commission has been tackling are cartel deterrence so as to eliminate or punish the violators of their laws (Blair & Sokol 2013). The clemency and consideration of the upcoming antitrust tends to damage directions. Hereby, the commission has been controlling upcoming mergers.

Conclusion

The commission has been effective, as seen with regard to cartels deterrence and elimination of anti-competitive behavior. The global competition review has called the commission “elite global enforcer”. Important organizations like Google have described the union as great enhancer of business that will expand. Many international organizations have attributed the success of the market and inhibition of unhealthy practices to the intervention of the EU. As far as unhealthy competition needs to be controlled, the EU must have space in the market. The antitrust policy has also been attributed to economic growth in Europe. Although the competition policy fosters growth, the commission has been experiencing some crisis and predicaments. As a result, the commission has been changing its criteria and mode of operations to overcome the predicaments.

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