Module description
ONLY AVAILABLE TO LAW STUDENTS
Competition (or antitrust) law is an exciting area of law, working at the confluence of law and economics; its purpose is to protect the process 2 of competition in a free market economy. Competition is ordinarily a beneficial process, because when firms compete for customers, they are encouraged to produce the best quality products (or services) at the minimum price, which is good for consumers (us).
A core objective of competition law is to prohibit firms for engaging in conduct which will distort the competitive process and harm competition by, for example, preventing firms from indulging in anti-competitive agreements, preventing firms with a powerful position on a market from abusing their market power, or dominant position, and preventing firms from lessening competition by merging with their competitors. For example, the benefits of competition will be lost where competing firms agree instead of competing to fix their prices or to divide the market, so eliminating important aspects of competition between them. Under such conditions, firms can become lazy and inefficient, the directors may spend too much time on the golf course (safe in the knowledge that their competitors, if any, are also doing so!) rather than considering how best to cut costs, innovate and otherwise satisfy their customers’ needs.
Content of the Course
This course scrutinises the EU competition laws regulating such anti-competitive agreements and practices (Articles 101, 102 and the EU Merger Regulation). It examines the law in its historical, theoretical and political context. The course commences by looking at the underlying objectives of the competition rules, how they fit into the framework of the EU Treaty and TFEU, and the mechanisms for the enforcement of the rules by both public enforcement authorities and individuals. A first question asked, therefore, is whether competition law is concerned exclusively with ‘competition’ and ‘economic’ matters or whether other objectives have shaped its content, for example, the goals of integrating the internal market, protecting small, but perhaps less efficient, businesses, preventing unemployment, environmental protection or eradicating regional discrepancies? Can manufacturers and importers of washing machines agree not to make or import less 3 efficient washing machines so increasing the price of machines and lessening consumer choice, but at the same time benefiting the environment? Can the Madrid Fashion Show Organising Committee refuse to allow models with a low BMI (body mass index) from working there because of the perceived risks of encouraging anorexia?
The course then goes on to examine how the rules apply to, or affect, horizontal agreements (those between competing firms operating at the same level of the manufacturing/ distribution chain, e.g. Coca Cola and Pepsi), vertical agreements (those between firms at different levels of the manufacturing/ distribution chain, e.g. Pepsi and Tesco), pricing and non-pricing practices of powerful firms (those with a dominant position on their market) and mergers. For example:
- Is competition restricted if British Airways and Virgin agree with each other to charge a fuel supplement to all their passengers at a pre-arranged level?
- Is it a restriction of competition for Chanel to refuse to sell its perfume to a discount store (which would sell it to you at a lower price) because it feels that this will tarnish its brand image and the perfume’s “aura” of exclusivity?
- Does Microsoft abuse its dominant position if it forces customers that buy its word-processing package to take its internet browser as well, even if it does not charge extra for the browser?
- Has Google got a dominant position and, if so, has it committed any abuses of that dominant position?
- Should Perrier be prevented from merging with one of the two other major producers of bottled water in France or Facebook be prevented from merging with WhatsApp?
Although a basic understanding of economic theory is required for the course, no prior knowledge of economics is necessary as the requisite concepts are set out and explained in the textbooks (and discussed in class).
Assessment details
Take-home examination (100%)
Educational aims & objectives
This module examines EU competition law, focussing on the rules applicable to undertakings - i.e. entities engaged in economic activity. It does not examine the state aid rules. The purpose of the module is to consider why the EU (like many jurisdictions across the world) has competition laws, what the objectives of the rules are (or should be), how they are enforced, and how they apply to conduct of firms which may harm competition - including agreements or other collusion between independent firms, unilateral conduct of dominant firms and mergers between firms. At the end of the module students will have a good understanding of the competition laws, and how they have been interpreted, and the strengths and weaknesses of the EU system. Where relevant, comparison with other competition law systems will be made. Students will critically appraise the EU competition law system and consider whether, and if so how, it can be improved.
Teaching pattern
Full Year, seminar (1 x 2 hours per week)
Suggested reading list
- Jones and Sufrin: EU Competition Law: Text, Cases, and Materials (OUP, 7th edn, 2019)
- Whish and Bailey: Competition Law (OUP, 9 th edn, 2018)