Main components of European competition
policy

There are four main areas of action of European competition policy:

(1) Antitrust & cartels
This relates to the elimination of agreements which artificially restrict competition (e.g.
price-fixing agreements, or cartels, between competitors) and of abuses by firms who
hold a dominant position on the market.

(2) Merger control
This pillar of policy controls mergers between firms (e.g. a merger between two large
groups) which would result in the enlarged (post-merger) business dominating the
market.

(3) Market Liberalisation
Market liberalisation policy has been behind the introduction of fresh competition in
several monopolistic industries in recent years. Good examples in the UK include energy
supply, telecommunications and postal services together with the new block exemption
arrangements for car retailers inside the single market.

(4) State aid control
This refers to the control of state aid measures by Member State governments to ensure
that such measures do not distort competition in the Single Market (e.g. the prohibition of
a state grant designed to keep a loss-making firm in business even though it has no
prospect of recovery). Good examples to focus on are state aid for steel producers, the
coal industry, farming and aviation all of whom are industries suffering major long term
problems and facing an uncertain future