Antitrust refers to a system of law set up to prevent the monopolization by an organization acting as a monopoly to exert undue market power. Measures by which such monopolization occurs in order to unlawfully gain an upper competitive hand with respect to sales are deemed illegal. Thus, the monopolist may not use its power rather than the merit of its product to conduct business, nor may it carry out actions that result in the restriction of trade.
In Europe antitrust law originated for economic and political reasons. Antitrust laws were incorporated into the Treaty of Rome in 1957. Judge Bellamy, a former member of the European Court of First Instance, advocated the uniting of people in Europe through the antitrust policies in the Treaty. This would establish a single market and bring people closer together through the system. The Court of the First Instance (CFI) was established in 1989 as a specialist court to deal with antitrust cases. The CFI acts as the judicial body, to which the European Commission's decisions are subject to review. The CFI is in turn answerable to the European Court of Justice (ECJ) for appeal purposes.
The European Community (EC) Treaty has multiple purposes, with the antitrust rules laid out in the first chapter of Part III of the treaty. Nine articles are contained within this chapter of laws. Additionally, further important provisions of EC antitrust law are explained in Articles II and III. The former contains the objectives of the treaty, and the latter its activities. A detailed guideline is included to clarify what kind of system is required to insure that competitive practice occurs without being distorted. In 1989, 32 years following the signing of the Treaty of Rome, the Merger Regulation was added to deal with the subject of mergers and antitrust implications.
The goal of antitrust law is to insure that one player or a group of players does not assume dominance in the market field. The raising of prices by artificial means or the restriction of supplies by methodologies incorporated by the dominant power are further disallowed by antitrust laws.
In 2010 Europe led a highly publicized antitrust suit against Google. The accusation was that Google had abused its role of dominance in the worldwide web, specifically with respect to its search engines. Smaller web companies filed complaints against Google, which led to an investigation by the European Commission.
Google assumes a major part of the online search market in Europe, even more so than in the United States. Previously Google had been the subject of antitrust investigations regarding privacy and copyright protection policies in a number of European countries. The 2010 antitrust case centered on arguments that Google had used its dominant position to give a preferential focus to its online search engines. Small businesses claimed that Google had altered search results to affect advertising competition, by downgrading competitors' sites.
Two further antitrust cases in Europe that have received worldwide press are the actions against Microsoft and Intel. These technology companies were considered to have breached antitrust law. The antitrust case against Microsoft in Brussels resulted in a long process over the course of a decade. Fines of approximately $2.4 billion were paid by Microsoft, prior to settling the case, in 2009. An antitrust suit against Microsoft was led in the U.S. as well.
The European Commission (EC) fined Intel Corporation 1.06 billion euros (approximately $1.47 billion) with regard to the violation of antitrust laws. Intel was found to have unlawfully excluded competitors from the x86 central processing unit market. This had been achieved by a system of rebates given to computer manufacturers buying Intel's product. According to the European Commission, Intel had paid a major retailer to stock its Intel x86 computers only.
In the mid 1980s the EC antitrust policy system underwent a change. Decentralization took place with the involvement of domestic courts and domestic antitrust authorities in antitrust activities. Certain events made the decentralization strategy even more pertinent. The collapse of the former Soviet Union in 1989, the signing of the Treaty on European Union (TEU) in 1992 and the expansion of Europe into these areas validated the need for the system to be set up in this way.
In the United States the dominant theme pertaining to antitrust law is the upholding of economic efficiency in a balanced competitive environment, as well as consumer welfare. The motivation for antitrust in Europe is slightly different. In addition to economic efficiency and consumer welfare, in Europe antitrust law serve a wider political goal, and its laws adhere to a European regulatory approach.