Competition lawyers advise clients on whether proposed transactions are likely to be classified as anti-competitive (for instance if they could create a monopoly). Work can involve analysis of allegedly anti-competitive agreements, mergers, state aid (where governments subsidise select companies) and cartels (an association of firms, manufacturers or suppliers engaged in a formal agreement to fix prices in particular territories and consequently restrict competition).
The work involves much analysis of regulation in different jurisdictions and can require competition lawyers to sell to regulators why a proposed transaction will not result in a substantial lessening of competition (SLC). To do this, when analysing the companies and products involved competition lawyers must take into account many factors, including: the principle activities of companies involved; customer perceptions of the company (including its brand and marketing); the use or purpose of a product or service; the design or composition of a product; the ingredients or materials from which a product is derived; the price; whether the product is a substitute or complement; and the retail location of the product or service.
Monopoly / Oligopoly: where a firm (or a small group of firms in the case of an oligopoly) owns such a large share of its market that it has total (or substantial) control over trade within that market. A monopoly/oligopoly can arise where certain companies have a unique selling point that other companies struggle to compete against and/or entering the market involves significant costs/investment. The control afforded by a monopoly/oligopoly can therefore make it difficult for competitors to emerge. This can enable those with a monopoly (or those that are part of an oligopoly) to charge inflated prices, reduce the quality of their products (to cut costs) and/or refrain from innovating (improving the products), in the knowledge that consumers cannot purchase the same products from alternate suppliers. Monopolies/oligopolies may therefore be deemed anti-competitive and thus illegal, depending on the extent to which competition is reduced. This can be problematic if companies want to merge.
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By Jake Schogger - City Career Series