EU Competition Rules: promoting and policing the Internal Market

In this chapter, we will examine competition law as an instrument of industrial policy in the EU. As competition law and industrial policy are often held to be in contradiction, and were originally pursued at different levels of government, this requires a brief explanation of how their relationship has developed in the EU. Industrial policy has traditionally been equated with national planning efforts and public intervention in the economy, ranging from outright state ownership of ‘strategic industries’ to preferential public procurement schemes. Largely discretionary in nature, its contents were defined by the national political agenda of the day, constantly at odds with the EU’s internal market objective. Competition law is usually viewed as being focused on private distortions of the market process, not on distortions caused by state policy. With few exceptions (notably Germany), a true competition policy was long pursued only at Community level, under Articles 85 and 86 of the EC Treaty. In recent years, however, these apparently clear dividing lines have dissolved: