Competition law is a branch of law that deals with laws and regulations that seek to ensure that markets have effective competition.
Competition law seeks to promote and safeguard competition in the markets by prohibiting conduct that aims to restrict competition and / or harm competitors.
It is a branch of law that has its origin in the policy against trusts or agreements between companies in the United States. The concern at that time was for competing companies to coordinate their actions in order to create a monopoly capable of increasing prices and restricting the quantity sold.
Elements of competition law
It is made up of two sets of rules:
- Antitrust law
- Law of unfair competition
The antitrust law aims to prevent and punish those behaviors that aim to limit competition in the markets. Among these behaviors are: cartels , abuse of dominant position, mergercontrol , etc.
Antitrust law investigates behaviors that have or could have a negative effect on the market and / or consumers. It does not investigate behaviors that only affect a particular competitor or consumer but have no impact on the market.
The law of unfair competition, on the other hand, deals with the anticompetitive behavior of companies regardless of whether or not they have an effect on the market. It is about preventing companies from taking up bad practices to harm competitors and / or consumers. Among these behaviors are: misleading advertising , denigration, confusion or exploitation of another’s reputation among others. It seeks to protect the rights of competitors and promote healthy and clean competition.
As we can see, the sub-branches of competition law share the general objective of protecting competition but its approach is different. Antitrust law deals with the effects on the markets and unfair competition law deals with the damage to competitors.
Application of competition law in Spain
The application in Spain is in charge of the competition agency , whose name is the National Commission of Markets and Competition or CNMC.
However, as part of the European Union, the application of competition law rules by the European Commission prevails over the CNMC.