Competition law

Competition law is a legal field that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as Antitrust law in the United States.

History

Competition law has its roots in ancient Roman law, and evolved significantly in the 20th century. The Sherman Antitrust Act of 1890 was the first instance of competition law at a national level, enacted in the United States to combat monopolistic practices.

Objectives

The main objectives of competition law are to ensure consumer welfare and efficient allocation of resources. It aims to prevent practices that have a negative impact on competition in the market, such as monopolies, cartels, and Predatory pricing.

Key Concepts

Monopolies

A Monopoly is a situation where a single company or group owns all or nearly all of the market for a given type of product or service. Competition law seeks to prevent monopolies where they restrict competition.

Cartels

A Cartel is a group of independent companies which join together to fix prices, to limit production or to share markets or customers between them. Competition law prohibits cartels as they lead to higher prices and limited consumer choice.

Predatory Pricing

Predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. Competition law prohibits this practice as it can lead to monopolies and reduced competition.

Enforcement

Competition law is enforced through both public and private actions. Public enforcement is carried out by competition authorities, such as the Federal Trade Commission in the United States and the European Commission in the European Union. Private enforcement can be carried out by private parties who bring claims for damages in national courts.

International Cooperation

Given the global nature of many markets, there is a need for international cooperation in competition law enforcement. Organizations such as the International Competition Network (ICN) and the Organisation for Economic Co-operation and Development (OECD) provide forums for competition authorities to cooperate and share best practices.

See Also

• Antitrust law
• Sherman Antitrust Act
• Federal Trade Commission
• European Commission
• International Competition Network
• Organisation for Economic Co-operation and Development