European Competition Policy and its potential Names: Panagiota Georgiou Zoi Dimitriou Denis Thornber
Introduction • Competition policy covers the different ways, in which the competition authorities of national and also the European Union seeks to make markets work better, and achieve a higher level of economic efficiency and economic welfare.
The aim of competition policy • Make the markets work better and to contribute towards increased efficiency and competitiveness of the Cyprus economy, within the European Union single market. • To ensure a wider consumer choice in markets for goods and services • Effective price competition between suppliers • To investigate claims of anti-competitive behaviour within markets that might have a negative effect on consumer welfare.
The four pillars of competition policy • Antitrust and cartels • Market liberalisation • State aid control • Merger control
History of Competition Policy • The roots of competition policy on the international level can be found in the nineteenth century when the Sherman Act was introduced in the United States of America as the first legislative act, which was intending to regulate the monopolistic behaviour of the companies
History of Competition Policy • The real history of competition law and policy in the European Union started in 1957 when the Treaty of Rome was created and signed • Art. 85 of the Treaty prohibited cartels of any kind, as well as restrictive practises that could harm competition. • Art. 90 regulated state monopoly, • Art. 92 prohibited state aid which could harm competition.
History of Competition Policy • European Commission is the one that is given the power to investigate and give fines when competition policy is not used properly by governments and companies. • Each member state has its own competition authority that is responsible for enforcing competition legislation at the national level.
Benefits of Competition • Competition is a process of rivalry between firms, each seeking to win customer’s business. • This rivalry may happen in a number of ways: • Some firms compete on price • Some focus on developing the quality of existing products and/or services • Others use their pioneering or research skills to create new products and/or services.
Benefits of Competition • This rivalry ensures that no part of the market remains unexplored • Prices will typically be offered at an efficient level of costs, a diversity of product offerings will come in to the market that matches the diversity of consumer needs and tastes, and the rate of innovation will be high.
Cyprus Commission for the Protection of Competition. • The Cyprus Commission for the Protection of Competition(C.P.C.) was established in 1990 with the enactment of the Protection of Competition Law 207/89 and it’s the authority, responsible for the protection of competition, without having any interference by the government.
Cyprus Commission for the Protection of Competition. • In 2000 the C.P.C. changed its internal structure, which helped it become more flexible and more focused on the enhancement of the foundations of the competition culture at a national level. • The public acknowledged the efforts made by the C.P.C. and started cultivating in its everyday life that, in a healthy competitive market the consumer enjoys goods at lower prices, improved quality and the fruits of technological improvements.
Cyprus Commission for the Protection of Competion. • The C.P.C., even before the 1st of May 2005 was an active member of the European Competition Network(ECN) • Through the ECN there is constant information of the pending investigations and decision of all the competition authorities in the member states • Our obligations as a member state are hampered as a result that our administrative capacity remains the C.P.C.’s main weakness.
Conclusion – The Competition Policy and its Potential in Cyprus. • Since the implementation of the European Competition Policy, into the Cyprus Law, it has opened the market up for the Cypriot consumer public making it possible to choose products from a variety of options. It has also stopped the big firms from being able to take advantage of the public and of smaller firms,
Conclusion – The Competition Policy and its Potential in Cyprus. • This policy has a great potential in Cyprus because of many firms/industries wanting to open offices, or shops in Cyprus. Also with the potential of the finding of gas of the coast of Cyprus, this will open up the energy market since most worldwide energy suppliers use gas, or renewable energy sources to create electricity.