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Competition policy is carried out at EU and its member states. The European Commission with the implementation of EU legislation and national authorities enforce the laws.Â National authorities may also enforce EU regulations provided by national legislation. The Competition policy is an area where the development of the EU have promoted the progress of its member-states. European competition policy can be divided into four distinct areas: mergers and acquisitions, state-aid, antitrust, and liberalisation of competition.
The European Commission has exclusive competence to approve the European mergers and acquisitions of a certain size, eliminating the need for companies to seek approval from several national competition authorities since the 1990s.Â The exclusive competence of the European Commission covers mergers in the total turnover worldwide through the company in question that worth more than 5 million euros, or when the total turnover at community level of each of theÂ least two of the companies affected over 250 million euros. unless each of the undertakings concerned achieves more than two thirds of its total turnover at the community level in the same member-state.
Approach to competition policy, these large mergers, acquisitions and disposals are explicit worldwide, which authorizes the Commission to non-European companies operating in the European Union.Â Since 1990, the Commission received notification of 2508 cases of mergers and acquisitions and authorized 90 per cent of them.Â Most of the other 10 per cent of the cases submitted to the authorities of the member states.Â The European Commission has blocked a total of only 18 cases so far.Â However, some of them were high profile cases that the Commission has received many criticisms.Â The parties involved in the latter two cases, brought an action before the European Court of Justice (ECJ) against the European Commission, and in both cases, the Court annulled the decision of the European Commission has closed the basis of the decision of the Commission.Â
In response to criticism of their actions and the legal framework that has suffered defeats in December 2002, the Commission has amended its merger decision- making process. Increased level of communication with the parties in the hope of merging the companies to allow adequate opportunity for them to justify their proposed action.Â The Commission also raised the "economic base" of their decisions through the appointment of a chief economist and an internal committee of the Commission on Peer Review in all cases.Â The Commission also divided central concentrations Multi Task Force (MTF) in units of the sector to facilitate the expeditious processing of cases.Â
The Commission must, under Article 81 (1) in the EU Treaty, to act to prevent any agreements or practices which may affect trade between member states and which have as their object or effect the prevention, restriction or distortionÂ competition within the common market.Â EU Treaty Article 82 provides that the Commission should avoid any abuse by one or more undertakings of a dominant market position (or a substantial part of the market).Â This abuse should be banned only if it affects trade between Member States.Â Therefore, the mandate of the EU antitrust policy only applies to cross-border competition issues.Â More or less equivalent in the U.S.Â that apply to businesses engaged in interstate commerce. However, that Article 81 of EU Treaty is designed to prevent arrangements discriminatory pricing in the European Union.Â Companies cannot legally stop imports of cheap products or services from one EU country to another EU where prices are higher.Â In May 2004, European companies were released from their obligation to notify and seek authorization from the Commission of trade agreements enter. Obviously, businesses still must ensure that their agreements do not violate the competition law of the European Union or nationalÂ but by eliminating the need for automatic notification should facilitate the removal of administrative barriers particular smaller number of mergers and acquisitions in Europe and, therefore, be welcome.Â You should also free up resources for the Commission to prosecute the offenders to serious competition, instead of deposits often routine.Â To a certain extent is testimony to the high level of knowledge (but not necessarily members of) the issues of competition policy among European companies that the authorities can now rely on other questions about where the red lines are in themselvesÂ instead of forcing them to file a notice of anything.Â
In addition, the Commission also May 1, 2004, has more powers of control and power to intervene against any anticompetitive merger (under its jurisdiction).Â You may cancel any agreement it deems violates EU competition and enterprises or an anti-competitive behaviour 10 per cent of sales worldwide.Â While the Commission has the power of competition since 1962, which in recent years important steps have been taken this area.Â In 2001 and 2002, a fine of 1.8 million euros and 1,000 million euros imposed, respectively.Â In addition, since 2001 the European Commission has taken action against at least three companies, Deutsche Post, Michelin, and DSD.Â Microsoft was fined â‚¬ 497,000,000 and to separate its Windows Media Player.Â Microsoft has appealed the verdict.
Important sectors of the European economy are partially covered byÂ the same exemption, which grants immunity to certain types ofÂ collusion among firms, if we consider that through the improvement of global competition, for example, improved distribution and technology transfer.Â
As part of the evolution of the application of Article 81, May 1, 2004, increasedÂ exemptions were replaced by the new regulations.Â Instead of requiring companies the positive things I could do, the new rules create a "negative list" of violations of prohibitions, such as price fixing, market sharing and a haven forÂ all other agreements.Â According to European Competition Commissioner MarioÂ Monti, the objective of these reforms to block agreements is to limit market distortions and allow greater freedom for companies to make business decisions desired com.Although is too soon, we support the intent and meaning of these reforms to competition policy.Â
After all, the European competition policy has been stepped up enforcement of antitrust laws in recent years, despite remaining gaps excluded sectors.Â At the same time, national authorities have become moreÂ role in their regulatory capacities have increased.Â This trend should continue after May 1, 2004, with the new EuropeÂ Competition Network (ECN), which includes both the Commission and national authorities in a group of informal, but institutionalized in which the applicant can not force a decision in another).Â In part, this reflectsÂ capacity building of national authorities and the decentralization of authority to make healthy choices, but given the political sensitivityÂ many cases of competition, attempts to "cover" of the Member States can not beÂ discarded.Â These attempts, however, we must resist the gap too wide in the implementation of competition policy between entities in a single marketÂ as, for example, to protect national champions, could cause serious distortions in the market and damage the overall level of competition.Â
Traditionally, many European economies had placed large industries in the state-controlled companies, especially those in industries considered essential and those with economies of scale and high fixed costsÂ telecommunications and electricity, for example.Â Following changesÂ technologies that allow efficient operation on a smaller scale and changesÂ attitudes, there was a shift towards privatization and competition.Â TheÂ sale of government assets has also been a source of revenue to coverÂ budget deficits.Â
In the EU, five Commission Directives in the telecommunications,Â transport, gas and electricity, postal services is designed to introduce competition by separating the infrastructure business.Â These guidelines have emerged from the Lisbon Agenda.Â Efforts to privatize state monopolies and introducing competition has seen tremendous political opposition of a member ofÂ states, particularly France.Â This opposition, in turn, is driven by the strong resistance from employees of state enterprises who fear the effect of competition on employment, wages and pensions.Â Because of this opposition,Â implementation of these guidelines has been slow and very long transition periods are often within the result.Â A key question is whether the most important step in the release of state monopolies is privatization or whether it is sufficient to create real competition for a state enterprise.Â In this regard, the EU TreatyÂ Article 86 (2), which covers the services of general economic interest, is of particular interest.Â He says:Â Undertakings entrusted with the operation of services of general economic interest or having the character of being a monopolyÂ rules contained in this Treaty, in particular the rules on competition, such asÂ the application of these rules does not, in fact or lawÂ tasks assigned to them.Â The development of trade must not be affected in a manner contrary to the interests of the Community. In principle, this Article is to ensure that state ownership isÂ not used as a means of limiting competition in the European Union.Â However, in reality, the product was subjected to "political interpretation."Â Some EU governments, notably France, have argued that it isÂ a need to provide essential services to remote and/or poorÂ their economies, which requires either continuous or propertyÂ limits to competition for public companies before.Â The FrenchÂ the government argued that firms face competitive pressures from full liberalization of the European services market, for example, little incentive to expand service coverage to the poorest regions.Â Important questions exemptions on profits before the competition rules of the EU common market.Â
Currently, the European Commission is preparing new legislation to clarify the scope of "services of general economic interest" (see European Commission, 2003e).Â This law is mandatory. French government's acceptance of partial liberalization of the European UnionÂ energy markets in the Barcelona Summit in 2002.Â Therefore, while there has been significant progress in Europe toward more competition and privatization, there is still much to doÂ impedes the progress of political resistance.Â The details of the state of liberalizationÂ monopolies in major EU countries are discussed later in this.
In an effort to create equal conditions of competition, Article 87 of EU Treaty prohibits state aid that distorts competition in the European Union. Union and tasks of the European Commission to enforce the ban.Â are exceptions to this prohibition, however, the state can grant aid to small andÂ Small and medium enterprises (SMEs) and training provision.Â In addition, the Commission may grant exceptions on a case-by-case basis, if the aid does not alter the "common interest".Â Despite the good intentions of Article 87, often resulting in state aid debate, and the overall level of state aid remains high in the European Union. The Commission estimates that between 1996-1998, the total level. EU state aid was â‚¬ 93 billion, or 250 â‚¬ per capita. The air transport sector in Europe has beenÂ to clashes between the Commission and Member States to help domestic firms. However, total state aid stubbornly high in the European Union illustrates the persistence of this problem in competition policy in the EU.Â
Companies that do not meet the test of competition and restructuring or needs to improve its operations, or to collect orÂ closed.Â State aid is slowing the process of restructuring is aÂ essential part of improving overall productivity.Â The discussion so far has been the European competition policy inÂ mergers and acquisitions and agreements between firms.Â TheseÂ If the emphasis on preventing the formation of dominant competitionÂ business practices or business groups.Â Of course,Â the inverse problem may be a concern as large or larger.Â Some industries in Europe have not been consolidated, leaving a fragmented structure that companies do not reach the minimum efficient scale or useÂ information technology (IT) effectively.Â In other cases, management may be entrenched incompetent, but they hold their jobs because shareholders do not have access to relevant information on the performance of the company, which makes it difficult to act.Â In such situations,Â the capital market's ability to mount a hostile takeover may be important forÂ productivity improvement.Â Even the threat of takeover may be enoughÂ forcing managers to improve operations.Â So far, the pace of hostile takeovers in Central European countriesÂ were very low.Â A study by Rossi and Volpin examines allÂ Mergers and acquisitions announced between January 1, 1990 and December 31, 1999 and December 31, 2002.Â Study reports that the volume of purchases for this period is quiteÂ high for most developed economies, but it varies by country.Â The volume is defined as the percentage of listed companies which are subject to successful mergers and acquisitions during the decade, and include the numbers:Â 65.63 percent for the United States, 53.65 percent for the United Kingdom, 56.40 percentÂ for France and 35.51 percent for Germany.Â As to the hostile borderÂ
acquisitions, the differences are much larger countries.Â The figures areÂ 6.44 percent for the United States, 4.39 percent for the United Kingdom, 1.68 percent for France and 0.30 percent for Germany.Â In other words, the German companiesÂ are virtually immune to hostile takeovers and the French borderÂ companies face only a very low rate of acquisition. To clarify the European competition policy, all members of the EU adopted a directive on takeover bids in late 2003 after 14 years of negotiations.Â
Although the policy guidelines of the EU has generated a level of acquisitions, especially hostile, was a failure.Â Instead of providing an equal EUWID to provide external pressure on the companyÂ management, the new EU rules retain the use of multiple voting sharesÂ and "poison pills" by the following directors as "options" against hostileÂ acquisitions without prior approval of shareholders.Â Eight managers who seek to preserve the status quo and the maintenance staff of the importance of preserving "national champions" to carry out these "legal options."Â In the presence of a competitive market for sound pressureÂ the capital market in the form of a hostile takeover, may not be necessary.Â But still there are many examples throughout the competition, the lackÂ or companies that have received or are subsidized by the authorities.Â In these situations, the case is strong for applying pressure on financial markets as an additional tool to facilitate the consolidation of the industry and oust ineffective leaders.Â The EU has clearly failed to provideÂ promote greater competition and increased productivity.
Politicians in Europe believes that the EU now has aÂ strong work force to add to the intensity of competition in the region.Â EUÂ decisions of competition authorities to receive widespread coverage and are often of international interest because they involve actions in large multinational companies.Â However, competition policyÂ
The European Commission has so far been far from ideal.Â Preventing mergers between large companies and sanction anticompetitive behavior are sometimes necessary.Â The Commission is alsoÂ the policeman on the corner to keep an eye on thingsÂ prevent crime.Â However, legal setbacks and criticisms facing. Commission before the Court indicates that, at least until recently, has a good estimate of the costs and benefits of these mergers.
Governments want to protect themselves from competition.Â If the intensity of competition isÂ growing European Union, national governments mustÂ change their positions and move proactively to promote the fullÂ competition. On the other hand, industry consolidation is often an important mechanism to improve productivity and the creation of strong competitors, and the European Commission must ensure that changes in assessment procedures are sufficient to determine if a real threat toÂ competitionÂ occurs. The main limitation of European competition policy, however, is notÂ has been too aggressive in some cases.Â On the other hand, has no powerÂ to remedy an anti-competitive conduct and regulations that restrict competition in many EU economies.Â In addition, as mentioned above, members. States are working to undermine the authority of the Commission. As for the opening of national markets in a number of industries including. industries that are described as "services of general interest, including public services, more generally, but can be applied to other industries.Â