Competition Law & Unfair competition Law: Differences on the horizon?
Actualizado: 9 feb
Este post lo dedico a mis alumnos de European Competition Law, asignatura optativa que imparto en inglés en el Grado en Derecho de la uc3m.
One of the first thing I usually do when I teach a class on European Competition Law is to ask the students what they think it is European Competition Law. The answers are very different at this point. Some of them considers that it is the area of law that prevents unfair competition between companies and mention comparative or misleading advertising or even aggressive practices. One of the most common mistakes is that: confusing acts of unfair competition with conduct contrary to competition law.
This confusion is very common, even among legal professionals. Although both disciplines can have some elements in common, the reality is that Competition Law and unfair competition are different. These differences could be summarized in 4 aspects:
1) The purpose of these disciplines is different. While for competition law one of the main goals is to protect public interests, for unfair competition law the purpose is to protect private interests. This is why European/national Competition law is an administrative discipline and the cases can be started ex officio by the European (European Commission), national (CNMC) or even Spanish regional authorities of competition (Cataluña, Galicia, la Comunidad Valenciana, Aragón, Castilla y León, País Vasco, Extremadura and Andalucía). Nevertheless, unfair competition law is a commercial law discipline that try to protect the private interest of the entrepreneurs who operate in a market. Therefore, claims must be initiated at the request of a party before Spanish judges (art. 249 LEC).
2) Competition Law contemplates that acts classified as an infringement is not prosecuted if it does not have effects on the market. However, this does not happen in the case of unfair competition.
This is what in Competition Law is called the “minimis rule” o “regla de minimis”. However, this exception should not lead us to conclude that competition law exclusively affects big companies or acts of great volume. But this is what happens in the vast majority of the cases, certain magnitude is necessary to apply the European Competition Law, because it is necessary that the conduct/the agreement/the practice affect or may affect the trade among member states and these restrict the competition within the internal market . One important aspect to know how much the anticompetitive practice affect the competence in a market is knowing the reference market.
3) The practices pursued for both disciplines are not the same. In general terms, competition law persecutes agreements, decisions, recommendations or practices that can prevent, restrict or distort competition, as well as the fact that companies that due to their power in the market have a dominant position and abuse it. For instance, an agreement between several competitors to fix the prices of their products or distribution agreements where the distributor cannot export the products to other member states (prohibition of the parallel trade). Competition Law also establishes the control procedures for economic concentrations to prevent them from having a pernicious effect on the existence of free competition in the affected market. As opposed, the illegal practices according unfair competition law could be misleading pubicity, attack clients fraudulently, misleading omissions to the consumers, denigrate a competitor in a market
4) The legal regulation is completely different. Competition Law at European level is regulated basically from articles 101 to 109 TFEU. In the case of national Competition law the regulation is in the Ley 15/2007, de 3 de julio de defensa de la competencia. However, in the case of the unfair competition, the regulation is Ley 3/1991 de 10 de enero, de competencia desleal.