Since 1958, when the Treaty of Rome establishing the European Communities came into force, the European Union has a common legislation to protect competition.

Article 101 of the Treaty[1] prohibits agreements distorting competition, and Article 102 prohibits the abuse of dominant position. The purpose of these provisions is to prevent agreements or abuses on the part of companies enjoying a dominant position from damaging trade between the Member States.

Article 106 of the Treaty also provides that in the case of public undertakings and undertakings to which special or exclusive rights are granted Member States may not adopt measures that restrict competition, contrary to Community rules.

On 21 September 1990, the Council Regulation (EEC) 4064/89 establishing a merger control system entered into force. Under this Regulation, before two or more undertakings falling within the scope of the Regulation may proceed with a concentration, they are required to notify the Commission of their intention. The Commission may prohibit the operation whenever it substantially impedes competition in the Common Market or in a substantial part of it. On 1 May 2004 a new Merger regulation went into effect (Council Regulation (EC) 139/2004[2]), further improving the one-stop-shop system to assess mergers and acquisitions in the EU.

On the same date of 1 May 2004 also went into effect the new Council Regulation (EC) 1/2003[3], referred to as the Modernisation Regulation, which replaces the Regulation 17/62, aiming to simplify and improve the effectiveness of the rules implementing Community competition law governing agreements and abuse of dominant position. With this reform, a system has been created in which the Commission, the national competition authorities and the national courts all have equal competence to enforce Community competition legislation. The provisions are generally designed to strengthen both vertical cooperation among the Commission and the national competition authorities, and horizontal cooperation between the various national competition authorities. The European Competition Network (ECN) has been set up to facilitate close cooperation among the national competition authorities and the European Commission and to ensure an effective and consistent application of Article 101 and Article 102 of the TFEU by all European competition authorities.

The legal framework of the Community competition rules is completed with a number of so-called block exemptions which have been awarded to certain types of cooperation between undertakings (i.e., supply and distribution agreements, horizontal cooperation agreements, car distribution agreements, technology transfer agreements). These regulations are based on a more economic approach to the assessment of the effects on competition of the agreements, by allowing a greater flexibility to the organization of the companies’ economic activities, and, at the same time, by clearly defining and prohibiting specific restrictive practices.

Responsibility for guaranteeing the enforcement of competition law at the Community level lies with the European Commission, with its headquarters in Brussels. A European Commissioner is responsible for competition policy and the relevant Directorate-General for Competition reports to him within the Community civil service.

This directorate has its own website: http://ec.europa.eu/comm/competition/index_en.html.

[1] The laws in question were originally marked by Articles 85 and 86 (the rules on state assistance were then carried over to Article 90). On 1 May 1999, when the Treaty of Amsterdam entered into force, Articles 85, 86 and 90 became (respectively) 81, 82 and 86. Member state ratification of the Treaty of Lisbon, signed on 13 December 2007, modified the Treaty establishing the European Union and the Treaty establishing the European Community. The laws on protecting competition were incorporated in the new Treaty on the Functioning of the European Union with Articles 101, 102 and 106.

[2] Official Journal of the European Union no. L24 of 29 January 2004.

[3] Official Journal of the European Union no. L1 of 4 January 2003.