- May 7, 2014
- Posted by: essay
- Category: Term paper writing
Furthermore, the EU competition law regulates mergers. Mergers can lead to unfair competition policies and misbalance the situation in the market. This is why the EU authorities tend to control mergers to eliminate the risk of the monopolization of the market and other negative effects of mergers (Whish, 2008). In fact, the EU attempts to control mergers in order to prevent the rise of monopolies and the violation of principles of the fair competition. What is meant here is the fact that the development of mergers without the government control and regulation may lead to the rise of the share of the market of certain companies. For instance, if two large companies merge and take control over 90% of the market, their rivals can hardly compete with them. Steadily these two companies will take the monopolistic position as a new, merged companies, whereas, if they remain rivals and do not form a cartel agreement, they compete with each other and maintain the tight competition in the market. The development of mergers, therefore, can threaten to the fair competition in the EU market because mergers may lead to the monopolization of the market. In such a situation, mergers are regulated by the EU competition law, which prevents mergers that may threaten to the fair competition and undermine the effective competitive struggle within the EU.
Finally, the state aid is another important area regulated by the EU competition law. In this regard, it is worth mentioning the fact that the state aid may also misbalance the competitive environment. Therefore, the EU authorities pay a lot of attention to the allocation of the state aid to maintain the fair competition in the EU. In actuality, the EU provides the financial aid to companies from the part of the state. For instance, the EU agriculture has substantial subsidies from the part of the state (Townley, 2009). Therefore, the state aid should be carefully regulated to minimize the risk of the violation of the balance in the market because the state aid may put companies receiving the aid into an advantageous position compared to companies that do not receive such aid. Therefore, the state aid to companies should be carefully regulated to minimize the risk of the violation of the balance in the market and the oppression of the fair competition.
In such a situation, the EU competition legislation focuses on the prevention of unfair competition practices and encourages reporting on practices that undermine competition. In this regard, leniency of whistle-blowers is an important part of the EU competition law, because in such a way, lawmakers encouraged executives to inform law enforcement agencies about their illegal activities or illegal activities which they witness in their companies (Geradin, 2000). The EU encourages top executives and other managers to inform law enforcement agencies on illegal practices that affect consistently the competitive position in the market. In such a situation, the behavior of Whitacre in the film The Informant is justifiable in terms of the development of the effective anti-trust policies and maintenance of the fair competition. In fact, top executives of the company conducted unfair policies in relation to rivals of the AMD. The film shows the unfair policy conducted by the AMD in relation to consumers and principles of the fair competition. In such a context, Whitacre’s behavior was absolutely right in terms of informing law enforcement agencies about illegal activities of other directors. The EU competition law stimulates people to inform about illegal policies and practices conducted by companies to identify threats and prevent the spread of unfair competition in the EU.
In addition, the regulation 1/2003 prohibits practices that limit competition. In fact, the practice introduced by AMD contradicts to the principle of the fair competition. Therefore, the company violated the regulation 1/2003 and articles 82 and 83 in terms of the violation of principles of the fair competition because practices conducted by the company deteriorated competition and contradicted to principles of the fair competition. The company organized cartel to maximize its benefits.
At the same time, the prevention of unfair competition practices is very important but the prevention of illegal practices cannot overcome ethical principles. At this point, it is worth mentioning the fact that Whitacre acted unethically and he violated legal norms as well. Even though the EU competition law admits leniency of wistle-blowers but the EU legislation still cannot free of the legal liability of individuals like Whitacre because he did not just inform law enforcement agencies about illegal activities of other directors, but also he conducted other illegal activities. This means that Whitacre conducted the policy of double standards (Craig and de Burca 2003). On the one hand, he informed law enforcement agencies about illegal activities of other directors, while, on the other hand, he also violated legal norms and acts. In this regard, the EU competition law admits the involvement of whistle-blowers in illegal activities related to the unfair competition policy but only as long as their involvement is essential for informing law enforcement agencies and collecting evidence to prove the guilt of executives violated the EU competition law. Therefore, the EU competition law is balanced. In fact, this means that whistle-blowers cannot count on forgiveness, if they violate laws consciously and use their whistle blowing as a cover for their crimes which aim at gaining high profits, as was the case of Whitacre, or other crimes. In other words, the leniency of whistle-blowers is limited and cannot be expanded on illegal activities of whistle-blowers that are not related to their informing activities.