Competition law general principles

There are a number of key principles that are common across UK/EU competition law, including:

1. •

   Market definition—this is the starting point for most competition law assessments, which will then consider whether there is any market power

2. •

   Market power—ie the ability to profitably raise prices above competitive levels or to restrict output or quality below competitive levels. In the short run, this is harmful to consumers and the economy as it results in inefficiently low production and consumption. In the longer run, the effects of market power are less certain. Although market power may reduce the incentives for an incumbent to compete and innovate, it might also act as a reward for success and spur innovation

3. •

   Effect on trade—a jurisdictional test which determines whether EU or national law is applicable to potentially anti-competitive conduct

4. •

   Extraterritoriality—the ability of a competition authority or a claimant to prosecute competition law infringements committed outside its territory

Market definition

The object of defining the market is to identify those products and services which are regarded as interchangeable or substitutable by the consumer.