by, María Pilar Canedo Arrillaga, Professor at the University of Deusto and Jean Monnet Chair
Competition law has a general aim of protecting markets against those actors that, for different reasons, break the rules of the game and obtain an extra-benefit harming competitors, consumers and society in general.
The traditional approach to competition law is to focus attention on undertakings – generally the most powerful because of different reasons – that find in the absolute freedom of laissez faire, the best opportunity to maximize their particular benefits not taking into consideration the general interest. Articles 101 and 102 of the Treaty of the Functioning of the EU have been the most relevant tool to fight these practices both by the European Commission and the national or subnational authorities.
In the former 20 years attention has been given by different international Organizations (OEDC, UNCTAD) to the role played by the State in the harms generated in the markets. Article 107, TFUE (dealing with State Aid) was since the beginning of the European Market one of the concerns of the EU institutions but a new approach is needed in this field.
The many different levels of administration (central Governments, regions, provinces, mayors) have the power to create legislation that reduces competition by creating entry barriers in markets or by generating discrimination between economic actors.
Those administrations have an incredible economic power when they enter into public procurement procedures in order to guarantee services and products to de citizens. If those administrations don’t impose the principles of efficiency in their procedures, the services received by the population will be more expensive and will have lower quality.