ABSTRACT
The essence of the European Community is the freedom of movement of goods, services, labour and capital. Competition law is vital as the four freedoms will only be fully attained if businesses within the Community can compete freely. A principal objective of Community competition law is to prevent businesses from distorting or dividing up markets within the Community. The objective of the Community’s competition provisions is set out in Art 3(1)(g) of the EC Treaty. The Community is to set up ‘a system ensuring that competition in the internal market is not distorted’. The first substantive provision in the EC Treaty that we shall discuss is Art 82 EC. It is designed to deal with the activities of businesses, ‘undertakings’ in European terminology, which have a powerful market position similar to the economists’ concept of monopoly. The actions of a business that has market power can have serious effects on the operation of a market. Article 82 is directed at the activities of a powerful single business which is not subject to effective competition. An undertaking in a dominant position may use its market power in several ways: to exploit consumers by restricting output and increasing prices; to perpetuate its own position, perhaps through unfair discounting; or to extend its position into another market, perhaps by tying the sale of one product to another. For that reason, Art 82 prohibits the ‘abuse’ of a ‘dominant position’ within the Community so far as it may affect trade between Member States.
