Competition law

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Competition law is a branch of law that deals with laws and regulations that seek to ensure that markets have effective competition.

This branch of law seeks to prohibit conduct that aims to restrict competition and / or harm competitors.

It is a specialty that has its origin in the policy against trusts or agreements between companies in the United States. The concern at that time was that competing companies 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:

  1. Antitrust Law.
  2. Unfair competition law.

Antitrust law aims to prevent and punish conduct that aims to limit competition in the markets. These behaviors include: cartels, abuse of a dominant position, merger control, etc.

Antitrust law investigates conduct that has or could have a negative effect on the market and / or consumers. It does not investigate conduct that only affects a particular competitor or consumer, but has no impact on the market.

Unfair competition law, on the other hand, deals with anticompetitive conduct by companies, regardless of whether or not they have an effect on the market. It is about preventing companies from using bad practices to harm competitors and / or consumers. These behaviors include: misleading advertising, denigration, confusion or exploitation of the reputation of others, 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 their approach is different. Antitrust law deals with market effects and unfair competition law deals with injury 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.

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