The importance of competition policy
An Office of Fair Trading case study

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Page 9: European Union competition law

Article 85 of the Treaty of Rome forbids agreements which may affect trade between the 15 Member States, and which have, as their object or effect, a limitation of competition. This includes price fixing, market sharing, restriction of production or technical development, and the imposition of discriminatory terms of supply.

Such agreements are void unless given an exemption by the European Commission. Grounds for exemption are improvements in production capacity and reductions in costs, whilst allowing consumers a fair share of the benefits. Agreements should not impose restrictions unless they are indispensable to the attainment of these objectives. Nor should they lead to an elimination of competition.

Article 86 of the Treaty of Rome bans the abuse of a dominant position, insofar as it may affect trade between Member States. Such abuse includes unfair purchase or selling prices, discriminatory pricing and refusal to supply. There are no exemptions.

The European Commission is directly responsible for the application of European Union law. The Office acts as the competent authority of the UK in relation to European competition rules and liaises closely with the European Commission. It attends oral hearings and comments on individual cases at meetings of the Advisory Committee of Member States.

Office of Fair Trading | The importance of competition policy