Competitive markets are markets in which economic rivalry enhances efficiency. Market ‘forces’ determine the winners and losers of this rivalry, and competition will – ultimately – force inefficient losers out of the market.

Who, however, forces the winner(s) to act efficiently? By the end of the nineteenth century, this question was first raised in the United States. After a period of intense competition ‘the winning firms were seeking instruments to assure themselves of an easier life’; and they started to use – among other things – the common law ‘trust’ to coordinate their behaviour within the market. To counter the anticompetitive effects of these trusts, the US legislator adopted the first competition law of the modern world: the Sherman Antitrust Act (1890). It attacked the two cardinal sins within all competition law: anticompetitive agreements, and monopolistic markets. The meaning of what ‘competition’ is has nonetheless remained controversial; and two basic ‘schools’ have here traditionally ‘competed’ with each other. Following the ‘Harvard School’, competition law is to prevent harm to consumers (exploitative
offences) as well as harm to competitors (exclusionary offences), whereas the ‘Chicago School’ sees the enhancement of ‘consumer welfare’ as the sole objective of competition law.

The US experience has significantly shaped the competition law of the European Union; yet the inclusion of a EU Treaty chapter on competition law was originally rooted not so much in competition concerns as such. It was rather the ‘general agreement that the elimination of tariff barriers would not achieve its objectives if private agreements of economically powerful firms were permitted to be used to manipulate the flow of trade’. The primary function of EU competition law was therefore originally seen in the removal of private party actions that would
tend to restore the national divisions in trade between Member States [and] might be such as to frustrate the most fundamental objectives of the [Union]. The Treaty, whose preamble and content aim at abolishing the barriers between States, and which in several provisions gives evidence of a stern attitude with regard to their reappearance, could not allow undertakings to reconstruct such barriers.EU competition law was thus – at first – primarily conceived as a complement to the internal market. This also explains the position of the competition provisions within the EU Treaties. They are found in Chapter 1 of Title VII of the TFEU that deals principally with internal market matters. The chapter is divided into two sections – one dealing with classic competition law, that is: ‘[r]ules applying to undertakings’; the other with public interferences in the market through ‘[a]ids granted by States’. Table 17.1 provides an overview of the various competition rules within the EU Treaties. Both sections contain one or two (directly effective) prohibitions, as well as a Union competence for the adoption of Union secondary law. The legislative competence(s) have been used to some extent, yet EU competition law is equally governed by a wide range of soft-law instruments adopted by the executive.

This chapter concentrates on private undertakings. The relevant Treaty section here is built upon three pillars. The first pillar deals with anticompetitive cartels and can be found in Article 101. The second pillar concerns situations where a dominant undertaking abuses its market power and is dealt with in Article 102. The third pillar is unfortunately invisible, for when the Treaties were concluded, they did not mention the control of mergers. This constitutional gap has never been closed by subsequent Treaty amendments; yet it has received a legislative filling in the form of the EU Merger Regulation (EUMR). Let us discuss, step by step, these three pillars of ‘private’ competition law.