Distortion of competition
Distortion of competition (also: distortion of competition ) describes the fact that a competitive situation is distorted in favor of one or more participants at the expense of the other participants.
Differentiation from unfair competition
While unfair competition is described as a certain form of breaking the law in competition law, distortion of competition is not directly considered illegal. Distortions of competition do not necessarily have to lead to injunctive relief and claims for damages. Rather, other buzzwords such as “ unfair competition ” and “ restraint of competition ” are a subset of the distortion of competition.
economy
In economic theory, distortion of competition is understood to be a form of restriction of free competition in which certain effects lead to a shift in the market equilibrium.
A distortion of competition can include
- anti-competitive agreements and behavior (cartels, price fixing, customer catching, targeted hindrance, exploitation, breaking the law, market disruption)
- Subsidies and special taxes or
- the exploitation of a quasi-monopoly position
are based.
From an economic point of view, market failure is a possible consequence of the distortion of competition. However, this depends not only on the size and sensitivity of the market, but also on the market share and the size of the aggressor as well as the degree of bias.
A distinction must be made between horizontal and vertical distortions of competition.
Horizontal distortion of competition
Horizontal distortion of competition is understood to mean all obstacles to or impairment of competition that arise from the joint interaction of companies at the same economic level that are in competition with one another. This includes not only express agreements, but also informal agreements and resolutions.
Vertical distortion of competition
Vertical distortion of competition is understood to mean hindrances or impairments for third parties (or other competitors) who follow the joint interaction of competitors at different levels. An example would be the relationship between producer and supplier.
Legal approach
The Bundeskartellamt takes over the supervision of the market in order to rule out cartels and monopolies that could damage competition.
Antitrust law (in Germany: Law against Restraints of Competition, in the EU: Art. 101-109 TFEU) tries to prevent distortions of competition (preventive) or to eliminate any distortions of competition that are discovered (sanctioning) and thus to maintain effective competition.
The norm of German antitrust and competition law is the Act against Restraints of Competition (GWB). Section 19 GWB forms the general clause prohibiting the exploitation of a dominant market position. This is available as soon as a company has a market share of more than a third. Two or three companies are to be regarded as dominant if they are not in substantial competition with one another and if they hold a substantial overall market share.
Section 1 GWB prohibits anti-competitive agreements between companies that are in competition with one another, anti-competitive resolutions by company associations and restrictions on competition through coordinated behavior.
Sports
Distortion of competition in sport received a lot of attention, for example through the soccer betting scandal in 2005 . Match arrangements contradict free competition. On the other hand, time play in sport can already be viewed as a distortion of competition, but the offender does not necessarily have to expect a penalty.
Known cases
A well-known example of distortion of competition is Deutsche Telekom . Until 1998 this had guaranteed the monopoly for telephone services in Germany by the state. At the same time, the authority RegTP was created to create equal opportunities for other competitors. The network was also sold to several investors. Nowadays you can choose from a variety of providers.
literature
- Friedrich L. Ekey: Outline of competition and cartel law. Heidelberg: CF Müller, 2006
- Competition LAW captured quickly . Manfred Heße. Springer Verlag, 2006
- Ralph Müller-Bidinger: Competition Law. Berliner Wissenschaftsverlag, 2006 Ralph Müller-Bidinger
- Horst-Peter Götting : Competition law: the new UWG . Munich: Beck, 2005
- Nicole Denise Rademacher / Anja Bronny: Antitrust law: floor plan with cases, questions and solutions . Berlin: Erich Schmidt, 2006
