Introduction

The European Community's commitment to promoting competitive markets was a significant step when the EEC Treaty was agreed in 1957 because European economies had seen high levels of state control, legal cartels and protectionist policies. Today, the EC's faith in the market is firmly established as the Community's economic policy is ‘conducted in accordance with the principle of an open market economy with free competition’.

In a market economy, the consumer, not the state, dictates what goods and services are provided. Consumer demand drives production. Even if consumers are truly sovereign, however, a market economy will not eliminate all inefficiencies: scarcity means that society is unable to satisfy everyone's demand. Accordingly, competition law is not designed as a highly interventionist policy to guarantee the welfare of every segment of the economy, nor is it designed to compel or create incentives for firms to behave to promote economic welfare. Its aim is more modest: to condemn anticompetitive behaviour. In the Community, Article 3(1)(g) EC provides that the EC shall have ‘a system ensuring that competition in the internal market is not distorted’. The system put in place by the EC Treaty provides for three principal rules to protect competition, which are addressed to firms: prohibiting firms from entering into agreements restrictive of competition (e.g. a price-fixing cartel); prohibiting dominant firms from harming the competitive process; prohibiting mergers that may harm competition.