The Competition Policy of the European Union.
As part of the European Union, member states adopt an economic policy conducted in accordance with the principle of an open market economy with free competition. The EUs competition policy objectifies the determination of effective competition with respect to a erelevant market. .
Competition is a basic device of the market economy involving supply (producers) and demand (consumers). Goods or services are offered by suppliers in an attempt to meet demand. Demand seeks the best ratio between quality and price that consumers will purchase. The response to the supply and demand brings about a challenge between suppliers. Competition leads individuals to seek out the means of striking a balance between quality and price in order to meet the demand to its fullest extent. This efficiency means guaranteeing consumers a level of satisfaction in terms of price and quality for goods and services demanded. Competition forces firms to be competitive and attempt economic efficiency. This consolidates the EUs industrial and commercial foundation so it is able handle the competitiveness of their key members and to put EU firms in a position to succeed in other world markets. .
Competition assumes that the market is made of suppliers who are independent of one another, while receiving and exerting competitive pressures from/on others. Competition laws were created in order to prohibit agreements or practices which might reduce the ability of suppliers to exert such pressure on the market.
The importance of a policy regulating competition was recognized early, and explicitly outlined in EC Treaty. The purpose was to prevent private economic players and national public authorities from dividing up the large European market, thus jeopardizing or even canceling the benefits of integration. .
Even in the most ideal economic conditions, economists accept that perfect competition cannot be achieved.