Competition law, known in the United States as antitrust law, has three main functions. First it prohibits agreements aimed to restrict free trading between business entities and their customers. For example, a cartel of sports shops who together fix football jersey prices higher than normal is illegal. Second competition law can ban the existence or abusive behaviour of a firm dominating the market. One case in point could be a software company who through its monopoly on computer platforms makes consumers use its media player. Third to preserve competitive markets, the law supervises the mergers and acquisitions of very large corporations. Competition authorities could for instance require that a large packaging company give plastic bottle licenses to competitors before taking over a major PET producer. In this case (as in all three), competition law aims to protect the welfare of consumers by ensuring business must compete for its share of the market economy.
In recent decades, competition law has also been sold as good medicine to provide better public services, traditionally funded by tax payers and administered by democratically accountable governments. Hence competition law is closely connected with the law on deregulation of access to markets, providing state aids and subsidies, the privatisation of state-owned assets and the use of independent sector regulators, such as the United Kingdom telecommunications watchdog Ofcom. Behind the practice lies the theory, which over the last fifty years has been dominated by neo-classical economics. Markets are seen as the most efficient method of allocating resources, although sometimes they fail, and regulation becomes necessary to protect the ideal market model. Behind the theory lies the history, reaching back further than the Roman Empire. The business practices of market traders, guilds and governments have always been subject to scrutiny and sometimes severe sanctions. Since the twentieth century, competition law has become global. The two largest, most organised and influential systems of competition regulation are United States antitrust law and European Community competition law. The respective national authorities, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) in the United States and the European Commission's Competition Directorate General (DGCOMP) have formed international support and enforcement networks. Competition law is growing in importance every day, which warrants for its careful study.
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Famous quotes containing the word law:
“The law of nature is alternation for evermore. Each electrical state superinduces the opposite. The soul environs itself with friends, that it may enter into a grander self-acquaintance or solitude; and it goes alone for a season, that it may exalt its conversation or society.”
—Ralph Waldo Emerson (18031882)
“From the war of nature, from famine and death, the most exalted object which we are capable of conceiving, namely, the production of the higher animals, directly follows. There is grandeur in this view of life, with its several powers, having been breathed into a few forms or into one; and that, whilst this planet has gone cycling on according to the fixed law of gravity, from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.”
—Charles Darwin (18091882)
“Laws can be wrong and laws can be cruel. And the people who live only by the law are both wrong and cruel.”
—Ardel Wray. Mark Robson. Thea (Ellen Drew)