Hinting at Competition

Competition between undertakings in the market is one of the prominent subjects in all European legislation and therefore of Italian Law. 

At first, competition was regulated by the Treaty of Rome (1957), which considered mainly the most visible aspects and problems of the market, which were restrictive agreements and dominant positions. Then as economic integration between member states increased, the matter was more deeply discusses by the European authorities and national legislators. Currently competition is regulated by the Treaty of European Union (TEU) and the Treaty of Functioning of European Union (TFEU), after the last modifications brought about by Treaty of Lisbon (2009). 

From the beginning, the European Community had as its fundamental  goal the creation of a common market (i.e. the sum of each internal markets). Before 1957 each country had its own market. With the birth of the European Community, the markets of each state started to communicate with each other and to create conditions for competition, although separately. Once this happened and a common market was achieved, States wanted to build a competitive market, i.e. a single market (something more than just a common market). Antitrust law is, in a few words, a set of rules which tends to ensure that fair market conditions are satisfied by undertakings in the ultimate interest of consumers. The most relevant provisions of European Law are articles 101, 102, 106, 107 of TFEU and other sources such as the Regulations, the Commission's Notice and Guidelines. 

Items regulated by the above-mentioned rules are restrictive agreements, cartels, abuse of dominant position, mergers, concentrations, States' aids. All of these behaviors are considered, if all conditions in the articles above are met, as a threat for genuine competition and a fair market and for this reason they are punished by the European authority (European Commission). 

Italian antitrust law (IAL) is L. 287/90 enacted in Italy after a long time of European Union's strong pressure. Article 1 defines the scope of application of the law while main prohibitions are set forth in articles 2, 3 and 6. In addition to IAL there are also specific antitrust rules regulating specific sectors (telecommunications, banking, public utilities, broadcasting). Article 2 and 3 of Italian antitrust law are the Italian versions of article 101 and 102 of TFEU. The first ones translated the latter, in accordance to the general principle stating that the Italian legislator (but also all the other national legislators) must operate in conformity with European Law. Further, Italian rules must be interpreted in the light of European principles, of the European Treaty and in accordance to their interpretation provided by the European Court of Justice. 

Competition is, in a few words, a basic mechanism of the market economy which encourages companies to offer consumers goods and services at the most favourable terms. It encourages efficiency and innovation and reduces prices. In order to be effective, competition requires companies to act independently of each other, but subject to the competitive pressure exerted by the others. 

European antitrust policy was developed from the two central rules set out in the Treaty on the Functioning of the European Union. 

First, agreements between two or more independent enterprises which restrict competition are prohibited by article 101 TFUE. This provision covers both horizontal agreements (between actual or potential competitors operating at the same level of the supply chain) and vertical agreements (between firms operating at different levels, i.e. agreement between a manufacturer and its distributor). The most flagrant example of illegal conduct infringing Article 101 is the creation of a cartel between competitors (ex. price-fixing or market sharing). 

Second, article 102 prohibits firms holding a dominant position on a determined market to abuse that position, for example by charging unfair prices, by limiting production, or by refusing to innovate with the prejudice for consumers. 

The Commission is empowered by the Treaty to apply these prohibitions, within the common market, and holds a number of investigative powers to that purpose. It may also impose fines on undertakings which violate the EU antitrust rules. 

Since 1 May 2004 all National Competition Authorities (in Italy AGCM) have also been empowered to fully apply Articles 101 and 102 of the Treaty in order to ensure that competition is not distorted or restricted also within national's boundaries. National courts may also apply these provisions in order to protect the individual rights conferred on citizens by the Treaty.

A link to an article of the blog which deals with the integration between European Court and national courts in solving most of internal cases: L'importanza del dialogo tra giudici

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