Competition
Competition : The rules on competition are intended to ensure that a European economic area based on market forces can function effectively. The European Community's competition policy (Articles 81 to 89, TEC) is based on five main principles: the prohibition of concerted practices, agreements and associations between undertakings which may affect trade between European Union Member States and prevent, restrict or distort competition within the common market; the prohibition of abuse of a dominant position within the common market, in so far as it may affect trade between Member States; supervision of aid granted by the Member States, or through State resources in whatever form whatsoever, which threatens to distort competition by favouring certain undertakings or the production of certain goods; preventive supervision of mergers with a European dimension, by approving or prohibiting the envisaged alliances; liberalization of certain sectors where public or private enterprises have hitherto evolved monopolistically, such as telecommunications, transport or energy. The first two principles may, however, be subject to derogations, particularly when an agreement between undertakings improves the production or distribution of products or promotes technical progress. In the case of state aid schemes, social subsidies or subsidies to promote culture and conservation of heritage are also examples of possible exceptions to the strict application of competition rules. The difficulty of pursuing an effective competition policy lies in the fact that the Community must continually juggle aims that are sometimes contradictory, since it has to ensure that the quest for perfect competition on the internal market does not make European businesses less competitive in the world market; and that efforts to liberalize do not threaten the maintenance of public services meeting basic needs. See: Competitiveness
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