European Union (EU) competition law protects consumer welfare by encouraging businesses to produce what the consumer wants, develop innovative products and services, and reduce prices.
In doing so, small and medium-sized businesses should get a fair chance to compete against larger businesses.
The competition law deals specifically with anti-competitive behaviour such as:
- Monopolies – where a single business takes advantage of being the only, or strongest, business providing a service. For more information, see the page in this guide on anti-trust law.
- Mergers – when businesses merge, this must not reduce competition in that market sector. For more information, see the page in this guide on mergers law.
- Cartels – agreements between businesses in the same industry to be uncompetitive. For example, by agreeing to jointly raise prices. For more information, see the page in this guide on cartels legislation.
- State aid – which is allowed only under certain circumstances. For more information, see the page in this guide on state aid and regional aid.
The Directorate General for Competition of the European Commission enforces EU competition law in co-operation with the National Competition Authorities across member states. It can:
- investigate businesses and industries
- start court proceedings against member businesses and member states
- investigate business sectors
- fine businesses that are acting uncompetitively
- give its opinion on proposed mergers that have an effect within a number of member states
The Directorate also supports free competition across the EU by advising other Directorates, holding public consultations, producing reports on the state of competition in the EU and promoting best practice. It also helps countries wanting to join the EU to ensure their laws are aligned with European law.