Introduction to Competition Policy

Competition puts businesses under constant pressure to offer the best possible range of goods at the best possible prices, because if they don't, consumers have the choice to buy elsewhere. In a free market, business should be a competitive game with consumers as the beneficiaries.

Sometimes companies try to limit competition. To preserve well-functioning product markets, authorities must prevent or correct anti-competitive behaviour. To achieve this, they often monitor:

agreements between companies that restrict competition – cartels or other unfair arrangements in which companies agree to avoid competing with each other and try to set their own rules

abuse of a dominant position – where a major player tries to squeeze competitors out of the market

mergers (and other formal agreements whereby companies join forces permanently or temporarily) – legitimate provided they expand markets and benefit consumers

Competition authorities establish the rules by which the market works, allowing for markets to provide cheaper, higher quality goods and services to consumers. Within any sector, the development of a real market economy depends on the widespread acceptance and enforcement of competition rules.

China adopted the Anti-Monopoly Law in 2007, and it entered into force in August 2008. Over the last three years, China has continued the development and implementation of its competition regime, and Europe has provided support and advice to this work. The development of a strong competition regime in China will be good for Chinese consumers, as goods become cheaper and better, and good for Europe, as doing business in China becomes more transparent and predictable.

DG Competition of the European Commission and EU Member State National Competition Authorities are working closely with the Chinese Anti-Monopoly Enforcement Agencies to help bring these benefits to businesses and consumers in China. The EU-China competition week model is an example of the ongoing co-operation between China and Europe in this area. Twice a year, a week of seminars, workshops and conferences are held at the central and provincial levels for Chinese enforcement officials and policy-makers. Such cooperation recognises that the development of competition policy in China is still in the early stages, and faces some important challenges in the future.

For the development of China’s new competition regime, the experiences, jurisprudence and enforcement practices of EU and the United States, with their much longer history of competition law enforcement, are relevant.  China does not have the luxury or the burden of having to develop its enforcement of competition laws over 100 years as with the United States or over 50 years with the EU.  China can learn from the experiences and, in particular, the mistakes of more experienced authorities.  

China’s AML is styled on the text of EU competition laws, especially, Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). It is natural that in interpreting the provisions of the AML, China might look for guidance from the jurisprudence on Articles 101 and 102 of the Court of Justice of the European Union and national courts of the Member States. In addition, it could look to the interpretation of Articles 101 and 102 TFEU of DG Competition and other national competition authorities of the EU. 

*Select portions of this introduction were provided by DG Competition and Stanley Wong, former head of mergers at the Irish competition authority, and a contributing EUCPT II expert

Latest Activity

Competition Week 14

The 14th EU-China Competition Week took place in Beijing and Shenzhen from 20-24 March 2017. The session included discussions on priority topics identified with the Chinese Anti-Monopoly Enforcement Agencies (AMEAs). This includes the use of economic tools to assess co-ordinated and unilateral effects in mergers, as well as a discussion of a recent merger reviewed by both the EU and China. There were discussions on the competition scrutiny of the financial services sector and the potential pro- and anti-competitive effects of trade associations, as well as the analytical framework relevant to cases involving vertical restraints and tying and bundling. In addition, there was a session with a wider group of government agencies to discuss the development of China’s new Fair Competition Review Mechanism which aimed to complement the Anti-Monopoly Law by introducing a review system to constrain government activities from unduly influencing market competition. This is an opportunity to share the EU's experiences with integrating competition assessment into government policy making and discuss the rationale and impact of State aid control.