The control of joint ventures and mergers under the EEC competition policy

Abstract

The competition policy of the European Community is the underlying theme of this thesis. It may, therefore, be advisable to consider at this early stage what is meant in this context by the expression "competition" and to delineate the rationale of having a competition policy. Thus, it is the function of competition policy to seek to prevent the unfair acquisition of market power by indi victual undertakings, without at the same time becoming too overprotective of rivals. The extent to which such policy should seek to intervene in the way in which business conducts its affairs is a central issue of controversy between economists. The traditional school of economists would recommend a twofold form of intervention. The first, which is that taken under Section 1 of the Sherman Act of the United States, the Restrictive Trade Practices Act of the United Kingdom, and under Article 85 of the EEC Treaty, would seek to prevent restraints of competition by way of agreements or concerted practices by undertakings, rendering them unenforceable and imposing civil or criminal penalties on those who participate in them. The second method would aim to prevent the undue acquisition of power by undertakings through merger or by monopolization of markets or through abuse of dominant positions by exclusionary anticompetitive or predatory practices. These are the targets of action taken in the United States under Section 2 of the Sherman Act and Section 7 of the Clayton Act, in the United Kingdom under the monopolies and mergers provisions of the Fair Trading Act and the anti-competitive practices provisions of the Competition Act, and Under Article 86 of the EEC Treaty dealing with abuse of a dominant position. Evidently, the most significant provisions of the EEC Treaty relating to the promotion and preservation of competition are Articles 85 and 86, which, as already seen, relate to anticompetitive agreements between, and abuses of dominant positions by, undertakings which may affect trade between Member States. The text of these Articles is set out in full in Appendix I.