Development of European Competition Policy

Abstract

This chapter builds upon the theoretical and conceptual insights discussed in Chapter 1 to describe the gradual convergence of European competition policy since the European Coal and Steel Community (ECSC) became operational in 1952. The chapter focuses in particular on the domestic and international causes of policy change and recent initiatives to modernize merger review and anticompetitive practices. Important roles are identified for European Union (EU) regulators and national politicians. Within the EU’s institutional framework, the regulators and politicians act and react to the legal decisions by the European Court of Justice (ECJ) on individual cases and developments, while the Commission has sought to expand its powers in this key economic policy. The behavior of these central actors is also informed by significant changes in the international political economy — in particular the liberalization of trade and investment over the last three decades — that have altered the incentives for firms to merge, seek state aid, and engage in anticompetitive activity. The chapter highlights the national basis of some of the policies in the competition realm and discusses how the merger philosophies of individual European countries and Commission officials, as well as variation in state capacity, have shaped the development of EU competition policy.