Economic benefits of having a competition policy at the EU level Essay

Economic benefits of having a competition policy at the EU level - Essay Example rging of large companies in the market place could create a monopoly for them pushing the prices of their products and jeopardizing the interests of consumers. The EU commission keeps a check on this and safeguards the interests of users so that large companies cannot take undue advantage of their large controlling market share in the business. Elf Aquitaine and TotalFina were the major players in the French petroleum market and their merger would have created a monopoly kind of situation controlling almost 60 percent of the service stations on French motorways. The merged entity would have become the largest supplier of liquid petroleum gas (LPG). This would have certainly pushed up the prices to harm the consumers. As a solution, Elf/TotalFina proposed to sell 70 service stations to competitors. On this consideration, EU commission allowed the conditional merger ensuring that consumers continue to get products at fair price. The EU has the right to investigate the mergers with a so le aim of community protection at large. The case of merger of pharmaceutical companies Pfizer and Pharmacia is worth enumerating, when commission noted that this may have an adverse impact on competition and consumers may not have sufficient choice on certain drugs. As a solution, merger companies proposed transferring some of the drugs to competitors that was agreed by EU commission protecting the interests of drug users. Similar was the case of merger of Sanofi and Synthelabo when two pharmaceutical companies sold off some of the products such as antibiotics, sedatives and vitamin drugs to competitors to take a clearance from EU commission for proposed merger between them. Thus, EU commission investigates all the large mergers, which may have adverse effect on the consumers. The EU...This paper is the best example of thorough analysis of the current state of competition policy, existing in the EU. There are certain benefits to consumers of having a competition policy at the EU le vel. The EU competition commission aims at opening up competition in formerly restricted areas, checks mergers and acquisitions for compliance with antitrust rules, tries to prevent certain business practices which could restrict competition. The EU competition also works toward removing financial support to companies by EU governments, and it brings international cooperation among other competition authorities to mitigate the detrimental effects of cartel and mergers taking place outside EU. In the past, transport, telecommunications, postal services and energy were not open to competition. The objective of EU commission was to liberalize these sectors and let the competitive forces decide the quality of services. This helps consumers to have improved services at economical prices. Merging of large companies in the market place could create a monopoly for them pushing the prices of their products and jeopardizing the interests of consumers. The EU commission keeps a check on this and safeguards the interests of users so that large companies cannot take undue advantage of their large controlling market share in the business A free market is a necessity for fair play but sometimes it happens that in a free market companies in the similar business form a cartel and try to avoid competition. The antitrust laws enacted by EU commission come into force to protect the consumer interests when companies try to restrict the competition.