**2. The community antitrust legislation**

In economy, competition is the condition in which several companies compete on the same market, understood as the ideal meeting place between demand and offer, producing the same goods or services (offer) which satisfy a number of buyers (demand). In competition no

• Freedom of entry or absence of barriers. If this requisite is not met, one must speak of im-

• Product similarity. If this requisite is not met, one must speak of monopolistic competition.

• Simultaneity of contracting, subsequent to a negotiating phase which allows all operators

There are different types, or degrees, of competition. One particular form is perfect competition: this refers to an ideal market condition in which the competition between the enterprises

In perfect competition, every operator considers the price as a datum that cannot be modified. The market reaches a position of equilibrium when the transactions take place at the price that makes the quantity demanded and that offered equal, i.e. the equilibrium price [2]. The

• *Existence*: the equilibrium price must also be significant from the economic viewpoint; if the price did not cover the costs and allow for significant revenues, the merchandise would

• *Stability*: if spontaneously reached by negotiations, the price is stable; otherwise, the price is unstable, when the producers do not succeed in swiftly adjusting the offer, so that the price

Perfect competition is deemed as reached in an economic system if the demand and the offer are particularly elastic, so that the price of a product or service tends to be close to the marginal cost. However, it has been the topic of in-depth debate, and today it is considered purely utopian, whereas an imperfect competition seems concretely achievable (so-called reasonable competi-

The concept of competition was developed by the critics of mercantilism as of the second half of the eighteenth century, as a natural result of the fundamental freedom of the individual, in contrast to a state-controlled economy in which the state determines what and how much

tion), in which the price decreases towards the marginal cost but without reaching it.

leads to a decrease in the purchase price which is equivalent to the marginal cost.

• *Singleness*: all the units of the product are sold at the same price.

To be able to speak of competition, it is necessary to verify the following requisites [1]:

operator can influence the trend of negotiations by his own decisions.

• Large numbers of operators, both sellers and buyers.

• Perfect market information and transparency.

to obtain the necessary information.

features of the equilibrium price are:

is destined to swing up and down forever.

not even be produced.

is produced.

perfect competition.

98 Public Management and Administration

The term antitrust identifies that complex of legal provisions that regulate and favour free competition in the market. Antitrust legislation therefore has the purpose of preventing companies from adopting strategies that allow them to assume anticompetitive positions or to stipulate collusive agreements to the prejudice of the consumer. However, these same provisions are also a policy tool and, therefore, subject to the opinions and choices of policy in general. Antitrust is an institution with deep roots in history and in society [7].

The purpose of antitrust legislation is to sustain a free market economy, where every enterprise takes its own decisions independently of its competitors, in order to guarantee strong competition which leads to a more efficient distribution of goods and services, lower prices of the same and their higher quality and maximum innovation. Competition therefore plays a role of primary importance since it encourages the various operators on the market to obtain the maximum result possible and to then select those that are most efficient.

The main modern legislations are the result of the affirmation of economic liberalism which has produced two effects: on the one hand, the suppression of state-imposed restrictions on the economy, and on the other hand, the ban on enterprises to abuse dominant positions to the prejudice of competitors and consumers.

The first modern antitrust law was the Sherman Act, passed in the United States in 1890, for the purpose of prohibiting cartel conduct and attempts to monopolise the market [8]. In 1914 the Clayton Act [9] was added to that first body of rules, to regulate the phenomena of corporate concentrations, followed by the Federal Trade Commission Act which punishes conduct that is generically defined as "unfair" and which is applied in parallel to the Sherman Act. The difference between the Sherman Act and the Federal Trade Commission Act is of nature and of purpose: the criminal nature of the antitrust bans enshrined in the former, and the consequent punitive nature of the antitrust control carried out in application of these rules, compared to a form of administrative control over behaviour and antitrust action that favours the correctiverestorative aspect.

The Treaty bans the abuse of dominant positions on the common market (or on a substantial portion of the same) on the part of one or more companies where this can be prejudicial to trade between the member states. It therefore only sanctions the exploitation of a dominant position after the fact and does not allow the institutions of the union to control the concentration process. On the control of state aid, the Treaty states, without allowing for exceptions, that state aid which distorts competition is incompatible with a common market. Political realism has prevented the use against the countries of the rigid wording adopted against companies, admitting that aid can be considered compatible (always providing that it does not alter the conditions of trade in a manner contrary to the common interest) if it is destined to facilitate the development of certain activities or certain economic regions, if it is to promote the execution of important projects of common European interest and, lastly, in the case of other

The Protection of Competition between National Law and EU Law: The Main Features in Public…

http://dx.doi.org/10.5772/intechopen.76411

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To eliminate the distortions of competition, the Treaty regulates the selective measures of aid in favour of companies and specifies the general measures in favour of the economy that can turn out to cause distortion of competition. In the Treaty there is no distinction between private and public companies, and several community directives discipline the transparency of the public funds destined to the latter. The EU interventions aim to protect the competitive functioning of the market on the basis of a general principle of a liberalist type, while the

Under Italian law an organic discipline on competition was adopted with considerable delay compared to the other industrialised companies: Germany, the United Kingdom and France adopted the first laws on this issue towards the end of the 1940s, whereas the rules on competition within the European Community, as mentioned above, were already contained in the

The reasons for this delay are due to the fact that Italy, for a long time, pursued an economic model based on the idea that the state had to play a fundamental role in the direction and protection of the corporate system, with an outlook towards national economic development, in which companies, on the one hand, accepted the limitations to the freedom of economic independence, in exchange for a system that protected the results acquired by the companies

This model is present in the Civil Code of 1942, and it was also confirmed in the Constitution of 1948 in Art. 41, which recognises and guarantees the right to economic initiative, ruling, in the first paragraph, that "Private economic initiative is free". The Constitutional Court, until 1990, seconded this view, refusing to pronounce judgements of a liberalist tendency, except in certain important exceptions such as the pharmaceutical industry and the telecommunications field.

With the promulgation of Law No. 287 of 10 October 1990, better known as the Antitrust Law, a radical change of direction was implemented, under the influence of the ideology of

determination of what is concretely admissible is based on extensive pragmatism.

categories of aid, if it is determined by a council decision.

**3. Protection of competition under Italian law**

Treaty of Paris in 1952 and the Treaty of Rome in 1957.

existing in the market.

This American experience paved the way for Europe to create provisions to protect market competition, although the first provisions were adopted several decades later than in the United States, only after the end of the Second World War. Only then were the conditions ripe for the creation of the European Single Market, overcoming the political visions of the diverse countries based, above all, on interventionism and protectionism [10].

In Europe, a single system of antitrust control was adopted only in 1957, with the introduction into the Treaty of Rome of specific provisions to protect competition, focusing on the discipline of restrictive agreements, the abuse of dominating positions and state aid. In 1989, with a specific regulation [11], a specific set of rules was introduced for the antitrust control of concentration operations.

The noncompetition discipline is an essential element of European integration inasmuch as it must allow companies to compete at par conditions on the markets of all the member states, ensure the competitiveness of their products and services at the global level and, at the same time, protect the European consumers in the best way. The provisions on competition are contained in Arts. 101 and 102 of the Treaty on the Functioning of the European Union [12], which regard national provisions on corporate activities.

The competition policy is divided into two main aspects: on the one side, it provides for controlling companies' behaviour regarding agreements and concentrations, and on the other side, it provides for limiting state aid to national producers. The implementation of the EU policy on competition is the responsibility of the European Commission, with control jurisdiction reserved to the European Court of Justice. The member states are obliged to harmonise national legislation to the EU legislation.

In 1957 most of the member states had a competition policy, but the methods and intensity of the control differed greatly from one country to another. The creation of a standardised economic area could not be limited to the coexistence of the various national practices, but the differences between national legislations were too deep to be replaced by a uniform community legislation. National and community competition policies had to coexist.

A general principle of community policy on this issue is the ban on agreements between companies that have the purpose or the effect of preventing, limiting or distorting competition within the common market and can prejudice trade between the member states. Agreements on the prices of goods produced and placed on the market, agreements on the regions and areas where the products will be sold or distributed and agreements on the quantities to be produced are expressly banned.

The Treaty bans the abuse of dominant positions on the common market (or on a substantial portion of the same) on the part of one or more companies where this can be prejudicial to trade between the member states. It therefore only sanctions the exploitation of a dominant position after the fact and does not allow the institutions of the union to control the concentration process.

On the control of state aid, the Treaty states, without allowing for exceptions, that state aid which distorts competition is incompatible with a common market. Political realism has prevented the use against the countries of the rigid wording adopted against companies, admitting that aid can be considered compatible (always providing that it does not alter the conditions of trade in a manner contrary to the common interest) if it is destined to facilitate the development of certain activities or certain economic regions, if it is to promote the execution of important projects of common European interest and, lastly, in the case of other categories of aid, if it is determined by a council decision.

To eliminate the distortions of competition, the Treaty regulates the selective measures of aid in favour of companies and specifies the general measures in favour of the economy that can turn out to cause distortion of competition. In the Treaty there is no distinction between private and public companies, and several community directives discipline the transparency of the public funds destined to the latter. The EU interventions aim to protect the competitive functioning of the market on the basis of a general principle of a liberalist type, while the determination of what is concretely admissible is based on extensive pragmatism.
