Throughout the development of the globalized economy, the EU has become a very attractive market for many companies around the world as producing and selling products in the EU becomes more popular. The EU has developed different competition policies in order to review, prevent or prosecute any anti-competitive behaviour and to protect the customer’s welfare. The challenge the EU now faces is how to achieve healthy competition and maintain customer welfare without derogating the free market. In the following, I will give an overview of the instruments which the EU uses to do so.

It is stated in the Report on Competition Policy 2008 that “cartels are amongst the most serious violation of competition law”. Cartels have a profound negative impact on competition, pricing and innovation because they shield their participants from external competition, which allows them to raise prices, divide the market or limit production, which in turn can harm the consumer’s freedom of choice. Hence, companies have to pay high fines when the EU uncovers their cartels.

Another problem the EU has to deal with is the monopolising positions of some firms. The abuse of such a position influences free competition and affects the consumer’s choice. Monopolists often try to create an unattractive market for competitors i.e. through dumping. A recent example of abuse of a monopolising position was the Microsoft case from 2007. During this case, the Commission made “a decision concluding that Microsoft had not complied with its obligation to offer complete and accurate interoperability information on reasonable and non-discriminatory terms” (European Commission, 2008). This led to Microsoft paying a penalty of EUR 899 million.

The EU competition policies also deal with merger control. Mergers may reduce competition by creating a dominant player who may abuse their position. The