Research has shown that only about 50% of small businesses make it past their 5th anniversary. One of the reasons that contribute to this unfortunate situation is fierce competition in the market place. To solve this problem, the European Union came up with the competition law that aims at promoting healthy competition on its single market. Specifically, the EU competition law ensures fair and equal opportunities and conditions for businesses to promote the development of small businesses and innovation. Here are some of the important facts to know about the EU competition law.
Functions of the Competition Law
The main objective of the competition law is to regulate anti-competitive conduct by established businesses, and this helps prevent the formation of cartels and monopolies. To achieve this objective, the competition policy regulates the following aspects of the European Single Market:
• State aid — It regulates the state aid given to companies.
• Cartels — It regulates the anti-competitive practices in the market.
• Mergers — Controls the mergers and acquisitions for companies with a certain turnover.
• Market dominance — It prevents companies that hold dominant positions in the market from abusing their status. For instance, large businesses are not supposed to use their bargaining power to impose policies that would be unfavorable for their competitors.
Benefits of the Competition Law
According to the Center for European Reform, the competition law is one of the most significant success stories of the European Union. This is because it has brought several benefits to the European single market, including, among others:
• Leveling the ground for businesses from all member states to compete fairly
• Giving room for small businesses to grow and also become competitive through state aid and other funding programs
• Maintaining healthy competition in the European single market by eliminating cartels and monopolies
• Through healthy competition, consumers gain access to better products at lower prices
• Promoting economic freedom, efficiency, welfare, and protection of competitors
Who Enforces the Competition Law in the European Union?
With help from other national competition authorities, the European Commission on Competition enforces the competition policy. They also enforce articles 101 to 109 of the Treaty on the Functioning of the European Union (TFEU), which basically outline policies surrounding the economy of the European Union.
Conclusion
These are some of the important facts to know about the EU competition law. So far, the law has transformed the European single market into an accommodative environment for all sizes of business. Consumers can also enjoy access to high-quality products and services at affordable prices.