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Main components of European competition policy There are four main areas of action of European competition policy: (1) Antitrust & cartels This relates to the elimination of agreements which artificially restrict competition (e.g. price-fixing agreements, or cartels, between competitors) and of abuses by firms who hold a dominant position on the market. (2) Merger control This pillar of policy controls mergers between firms (e.g. a merger between two large groups) which would result in the enlarged (post-merger) business dominating the market. (3) Market Liberalisation Market liberalisation policy has been behind the introduction of fresh competition in several monopolistic industries in recent years. Good examples in the UK include energy supply, telecommunications and postal services together with the new block exemption arrangements for car retailers inside the single market. (4) State aid control This refers to the control of state aid measures by Member State governments to ensure that such measures do not distort competition in the Single Market (e.g. the prohibition of a state grant designed to keep a loss-making firm in business even though it has no prospect of recovery). Good examples to focus on are state aid for steel producers, the coal industry, farming and aviation – all of whom are industries suffering major long term problems and facing an uncertain future |