European Competition Law Essay Example | Topics and Well Written Essays - 5500 words

European Competition Law - Essay Example What follows is a general discussion of State Aid in the European Union followed by the Judicial and Academic attitudes towards it in the United Kingdom. Although in the past State Aid was considered a "poor relative" of European competition law and viewed as a rather politically motivated/policy based phenomena. Things have changed in the past two decades however and the EU version of State Aid control has assumed the significance of its American counterpart pertaining to antitrust enforcement and merger control. Every year the EU commission reviews thousands of state aid cases each year, as lengthy investigations are undertaken to and many companies have found themselves going bankrupt following large illegal State Aid repayments. Social contributions and tax benefits and subsidies have been recognised as State Aid alike and likely to distort market competition.The EU's basic aim is to achieve a perfect competition like situation with liberalisation and State Aid control.The EU sta te aid control framework has not spared large financial institutions and multinationals (take the example of high profile disputes like Alstom, France Tlcom, British Energy or WestLB) and this has put these corporate "big fish" much favoured by State Aid previously at their guard from loans and large capital injections,shady compensation for public services, lenient tax measures, and feigned Research and Development measures. 1- introduction ''Effective competition is the best and strongest means to create natural incentives for companies to come up with new ideas and new products.' - Neelie Kroes, EU Competition Commissioner, 2004-2009 It is a trite principle of Economics that State Aid can have detrimental effects on the economy of a country and its trading partners and rivals. It can potentially distort competition and cause wastage of the society's resources by e.g. supporting an outdated industrial structure and delaying a necessary restructuring process in firms. The European Unions efforts to control any measures by its member states to curb competition have made their presence felt for the member states mainly because of the European Unions strict control over competition policy which gives it the power to rule on mergers, takeovers, cartels and the use of state aid. In the recent years the European Union has been able to develop competition regulation into a key area of EU leadership by imposing its rules/policies pertaining to open market competition on member states. Most of these measures have often proved controversial1 as threatening the social market model of its members with its open market policies competition policy dates back to 1957 in the Treaty of Rome wide ranging powers were given to EU authorities to oversee and prevent anti-competitive activities in the firms of its member states. The decades of the nineties saw an increase in the control and activism of the EU in pursuing breaches of competition law, and this contributed to a significant amount of case law as well. Until 2004 these rules were accused of being hot potch and allowing too much interference by the EU authorities in what it deems to be breaches of its Competition regulations.The Treaty of Rome empowers the EU commission2 to investigate the allegations of price fixing, abuse of