The Regulation of Competition and Innovation in the European Union and Spain: Opportunities for the Philippines and the ASEAN

! 1" THE$REGULATION$OF$COMPETITION$AND$INNOVATION$IN$THE$EUROPEAN$UNION$ AND$SPAIN:$OPPORTUNITIES$FOR$THE$PHILIPPINES$AND$THE$ASEAN$ " Dr.$Eugenio$Olmedo$Peralta$ Commercial$Law$Senior$Lecturer$ Universidad$de$Málaga$ Campus$de$Excelencia$Internacional$Andalucía$Tech$ Spain$ " ABSTRACT$ " The$Philippines$are$currently$facing$a$process$of$regional$economic$integration$inside$ the$ASEAN,$in$some$way$similar$to$the$process$undertaken$by$Spain$and$the$European$Union$ decades$ ago.$ Since$ January$ 2016,$ the$ ASEAN$ has$ become$ a$ Common$ Market,$ for$ whose$ effective$achievement$Competition$and$Innovation$Law$and$Policies$may$play$a$crucial$role.$ The$scope$of$these$pages$is$to$overview$the$importance$of$the$regulation$in$these$issues$and$ the$promotion$of$competition$within$the$member$States$throughout$the$process$of$regional$ economic$ integration.$ Then,$ we$ will$ consider$ the$ role$ that$ Competition$ and$ Intellectual$ Property$Law$and$Policies$have$played$in$the$construction$of$the$European$Union,$and$we$will$ point$ out$ some$ current$ challenges$ that$ are$ still$ to$ be$ faced.$ Finally,$ we$ will$ offer$ some$ comparative$conclusions$considering$the$importance$that$these$norms$and$policies$will$have$ in$the$construction$of$the$ASEAN$as$an$economic$integrated$area,$and$the$way$the$ASEAN$ might$follow$the$footsteps$set$by$the$European$Union$in$its$integration$process.$$$$ " TABLE$OF$CONTENTS$ " I. The"long"way"to"economic"integration" II. Regional"integration"within"the"big"International"Economic"Agreements" III. Competition"policy"in"the"European"process"of"Economic"Integration" IV. The"promotion"and"protection"of"innovations:"Intellectual"Property"Policy" V. Current"challenges"in"the"European"policy"for"competition"and"innovation" VI. Conclusive"remarks:"the"role"of"competition"and"innovation"policy"in"the"integration" process"of"ASEAN"" " " I. THE$LONG$WAY$TO$ECONOMIC$INTEGRATION$ " In"the"increasingly"globalized"World"resulting"from"the"Second"World"War," opened"to"a"bigger"international"competition"between"the"economies,"the"States" have"found"in"the"cooperation"with"the"neighbouring"countries"a"way"to"grow"and" being"more"competitive."The"establishment"of"these"networks"provides"important" advantages"for"the"countries"involved:" " 1) First"of"all,"it"allows"to"remove"barriers"to"trade"between"the"member" States,"fostering"the"intensity"of"trade:"both"in"quantity"and"in"quality."" " 2) Secondly," it" expands" the" markets" of" the" participating" economies." This" means"that"the"potential"demand"for"the"goods"and"services"produced"by" a" country" grows;" but" also" competition" does" expand," as" the" local" companies"will"have"to"compete"not"only"with"other"local"manufacturers," but"also"with"the"ones"of"the"other"States"participating"in"the"integration."" ! 2" " 3) This" latter" factor" fosters" innovation" and" competition," so" as" the" specialization"of"the"countries"in"those"goods"in"whose"production"they" enjoy"a"comparative"advantage1."Manufacturers"will"now"have"to"produce" their"goods"in"better"economic"conditions"than"the"other"countries"do." The"attractiveness"of"the"local"offer"may"come"out"of"better"prices,"but" also" of" a" better" quality" of" the" products" or" the" incorporation" of" any" innovation"protected"by"intellectual"property"rights."" " The"processes"of"economic"integration"must"satisfy"three"requirements"at" least:"the"removal"of"obstacles"to"trade"between"the"participating"countries;"some" kind"of"cooperation"in"economical"and/or"legal"matters;"and"the"improvement"in"the" general"level"of"welfare"of"the"integrated"zone2."" " Regional"Integration"Agreements"may"adopt"different"forms"according"to"the" extension"of"the"commitments"undertaken"by"the"parties"involved"in"it."Normally," economic"integration"represents"a"process"formed"by"different"stages."In"each"stage" the" parties" assume" greater" obligations," the" trade" barriers" are" lowered" and" the" interconnection"between"the"economies"grows3."From"an"economic"point"of"view," we"can"distinguish"up"to"six"steps"in"the"economic"integration"process:" " A) Preferential$ agreements." By" means" of" a" preferential" agreement," the" parties"confer"themselves"some"kind"of"commercial"preferences,"such"as" a"reduction"of"tariffs"or"other"form"of"protection,"mainly"regarding"to"the" industrial"production."The"problem"of"these"agreements"is"that"they"do" not" fit" inside" the" legal" framework" introduced" by" the" WTO," for" they" undermine"the"principle"of"non-discrimination"and"shall"not"be"included" in"the"exception"considered,"first"by"the"GATT,"and"now"by"the"Marrakech" Agreement"(art."XXIV"GATT)."" " B) Free$trade$area."The"simplest"form"of"economic"integration"is"the"free" trade"area."It"only"implies"the"removal"of"tariff"and"no-tariff"barriers"to" the"trade"of"goods"among"the"involved"countries."The"definition"of"the" trade"policy"remains"within"the"competence"of"every"single"participating" State,"so"as"trade"with"third"countries"not"party"to"the"integration"process," which"remain"bonded"by"the"existing"barriers." The"functioning"of"this"level"of"integration"requires"to"set"a"monitoring" system"in"order"to"control"trade"inside"the"free"trade"area,"so"as"the"goods" imported" by" third" countries" may" not" be" commercialized" inside" the" integrated"area"free"of"the"tariffs"or"non-tariff"barriers"that"are"normally" applied" to" the" goods" coming" from" third" parties." The" general" solution" adopted" to" overcome" this" problem" is" the" requirement" of" export" certificates."" !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1"See"BALASSA,"B.,"A$“stage”$approach$to$comparative$advantage,"The"World"Bank,"Washington,"1977."" 2"See" BALASSA," B.,"Teoría$ de$ la$ integración$ económica," Unión" Tipográfica" Editorial" HispanoAmericana,"Mexico,"1964." 3"An"in-deep"analysis"of"the"economic"integration"processes"can"be"seen"in"CALVO"HORNERO,"A.," Integración"económica"y"regionalismo:"Principales"acuerdos"regionales,"3rd"Ed.,"Ed."Ramón"Areces," Madrid,"2003.!! ! 3" This" form" of" the" Free" Trade" Agreement" between" the" countries" of" the" ASEAN"set"in"1992.""" " C) Customs$union."The"next"step"in"the"economic"integration"is"the"creation" of"a"customs"union."In"this"case,"the"countries"that"conform"a"free"trade" area"decide"to"fix"a"common"tariff"regarding"to"third"countries."That"is,"the" import"of"goods"from"third"countries"must"face"a"single"common"tariff."By" these"means"the"above-mentioned"problem"of"trade"of"imported"goods" inside"the"free"trade"area"is"solved."In"Europe,"this"phase"of"evolution"was" reached"in"1968"with"the"European"Community"(EC)."" " D) Common$ market." The" Common" Market" represents" the" addition" to" a" customs"union"of"the"freedom"of"circulation"of"factors"of"production,"such" as"labour,"assets"or"companies."Normally,"when"a"common"market"is"set," the"parties"involved"agree"in"the"convergence"of"some"common"policies," such" as" a" common" policy" for" agriculture," fishing" or" commercial" relationships" with" third" parties." The" establishment" of" a" common" competition"policy"is"crucial"in"this"phase."The"achievement"of"the"goals" of" the" Common" Market" requires" the" elimination" of" physical" borders" (customs),"technical"frontiers"(which"requires"the"harmonization"of"rules" about" qualities," public" markets…)" and" tax" frontiers" (by" means" of" the" harmonization"of"some"taxes)."The"European"Union"set"in"1993"by"the" Maastricht"Treaty"represented"the"achievement"of"this"step"in"Europe4." The"ASEAN"has"become"a"Common"Market"since"January"2016,"allowing" the"free"trade"of"goods,"assets"and"labour."""" " E) Economic$ union." The" harmonization" of" some" politics," especially" regarding" to" macroeconomics," can" lead" to" the" achievement" of" an" Economic"Union."To"reach"this"phase"two"provisions"are"required:"(a)"the" harmonization" of" monetary" policy;" and" (b)" the" establishment" of" an" harmonized" fiscal" policy." But" other" policies" are" normally" harmonized," such"as"the"rules"regarding"public"budgets" or" the" fixation" of" common" policies" to" foster" structural" changes" and" regional" development." In" Europe,"this"stage"was"reached"in"1999"with"the"Economic"and"Monetary" Union"(following"the"steps"set"in"the"Amsterdam"Treaty);"but"this"kind"of" integration" had" been"achieved" long" before" in" the" Benelux" (1948)," the" Lagos"Plan"of"Action"(1980)"or"the"Mano"River"Union"(1973)5."" " F) Full$economic$and$political$integration."Along"with"the"coordination" and"unification"of"the"domestic"economies"of"the"Member"Estates,"full" integration"requires"the"establishment"of"a"common"parliament,"so"as"the" adoption"of"a"single"foreign,"defence"and"domestic"policy."Europe"has"not" yet"achieved"this"phase,"and"the"problems"of"the"latter"decades"make"us" feel"that"it"will"be"more"difficult"than"what"it"was"thought."Euroscepticism," !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4"See"CECCHINI,"P.,"The$European$Challenge,$1992:$The$Benefits$of$a$Single$Market,"Aldershot,"Hants," 1988."" 5"Though,"as"one"can"easily"see,"these"cases"are"cases"of"more"reduced"entity."" ! 4" a"possible"Brexit6"and"the"refusal"to"implement"some"community"policies" –especially" regarding" to" the" control" of" the" public" budget" deficit-" are" threatening"not"only"the"completion"of"the"integration"process,"but"also" the"stability"of"the"phase"of"Economic"Union"already"achieved."" The"United"States"is"an"example"of"this"kind"of"integration,"so"as"was"the" unification"of"Germany"in"1871"or"Italy"in"1870."" " As"the"member"States"get"integrated"within"this"process,"there"is"still"the" possibility" for" new" members" to" enter" in" the" Agreement." The" European" Union," originally" formed" by" six" member" States" (Germany," France," Italy," Belgium," the" Netherlands" and" Luxembourg)," has" grown" throughout" 7" Accession" Treaties7." Nowadays" it" is" integrated" by" 28" members." The" same" happened" in" the" ASEAN," originally"constituted"by"5"members"(Indonesia,"Malaysia,"Philippines,"Singapore" and"Thailand)"and"nowadays"formed"by"10"members8.""""" "" II. REGIONAL$INTEGRATION$WITHIN$THE$BIG$INTERNATIONAL$ECONOMIC$ AGREEMENTS$ " The"regulation"of"international"economy"does"not"fall"only"within"the"scope" of"regional"integration"agreements."International"economic"relationships"take"place" at"a"global"scale,"and"thus"even"regional"agreements"must"fit"inside"international" agreements" and" work" along" with" international" economic" organizations." Two" international"organizations"are"of"special"interest"for"the"purposes"of"this"pages:"The" World"Trade"Organization"(WTO)"and"the"World"Intellectual"Property"Organization" (WIPO),"for"both"affect"to"competition"and"innovation"at"international"level.""" " - WTO." The" intents" to" create" an" intergovernmental" organization" to" regulate"international"trade"remotes"to"the"end"of"the"Second"World"War," through"the"pretended"International"Trade"Organization"(ITO)."After"the" conflict,"the"United"States"and"its"allies"intended"the"creation"of"the"ITO" by" means" of" the" passing" of" the" Havana" Charter" in" 1948." But" this" organization"never"came"into"being,"due"to"lack"of"approval"by"the"US" Congress."The"absence"of"this"organization"was"covered"during"46"years" by"the"General"Agreement"on"Tariffs"and"Trade"(GATT),"which"was"just" an"agreement"and"it"did"not"constitute"any"international"organization"to" govern" international" trade." The" situation" changed" in" 1994," when" 123" nations" signed" the" the" Marrakesh" Agreement" which" constituted" the" World"Trade"Organization,"and"substituted"the"GATT9."" !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 6"The"possibility"of"the"United"Kingdom"to"get"out"of"the"European"Union,"which"will"be"subjected"to" referendum"next"23th"June"2016."The"possibility"of"a"Member"State"to"leave"the"Union"had"previously" been"considered"regarding"to"Greece"and"its"difficult"economic"situation.""" 7"United" Kingdom," Ireland" and" Denmark" (22" January" 1972);" Greece" (28" May" 1979);" Spain" and" Portugal"(12"June"1985);"Austria,"Finland"and"Sweden"(24"June"1994);"Cyprus,"Estonia,"Hungry," Malta,"Poland,"Latvia,"Lithuania,"Czech"Republic,"Slovakia"and"Slovenia"(16"April"2003);"Bulgaria"and" Romania"(25"April"2005)"and"Croatia"(9"December"2011)."""" 8"Brunei"(since"8"January"1984),"Vietnam"(28"July"1995),"Laos"and"Myanmar"(23"July"1997)"and" Cambodia"(30"April"1999)."East"Timor"and"Papua"New"Guinea"are"nowadays"candidate"Countries"to" enter"in"the"ASEAN." 9"On" the" evolution" of" the" WTO" see" CALVO" HORNERO," A.," Economía$ internacional$ y$ organismos$ económicos$internacionales,"Ed."Ramón"Areces,"Madrid,"2010,"pp."291"ff.!! ! 5" The"Marrakesh"Agreement"attributed"the"WTO"all"the"competencies"of" the"GATT"regarding"the"trade"of"goods"and"services,"but"also"gave"other" competencies"regarding"to"intellectual"property,"environmental"policy," trade"and"development,"regional"trade"agreements,"Balance-of-Payment" restrictions," technology" transfer" and" transparency" in" public" procurement." The" agreement" also" included" some" sectoral" agreements" (public" markets," beef," civil" aircrafts…)," so" as" some" rules" affecting" the" artificial" exports" promotion" (subsidies)" or" regarding" the" regulation" of" exportations."" From"a"systematic"point"of"view,"the"constitutive"agreements"of"the"WTO" were"divided"into"four"parts:"GATTS"(regarding"the"trade"of"goods);"the" GATS"(General"Agreement"on"Trade"and"Services);"the"TRIPS"(Agreement" on" Trade-Related" Aspects" of" Intellectual" Property" Rights);" so" as" the" establishment" of" a" dispute" settlement" system10." We" will" focus" on" the" implications"of"the"TRIPS."" The"TRIPS"agreement"focuses"on"five"main"aspects:"" 1) The"implementation"of"the"basic"principles"of"intellectual"property" relating"to"trade:"" a. national" treatment," which" implies" that" the" treatment" given" inside"a"country"must"be"the"same"for"nationals"and"foreigners."" b. the"most-favoured-nation"principle"implies"that"any"advantage" given" to" a" third" country" automatically" extends" to" all" the" members"of"the"WTO."" c. and" technology" transfer," which" recons" that" intellectual" property"must"serve"to"technical"innovation"and"the"transfer" of" technology," getting" advantage" of" it" both" producers" and" users,"seeking"the"economic"and"social"welfare.""""" 2) The"protection"of"intellectual"property,"on"the"basis"of"the"agreements" set"by"the"WIPO."The"role"of"the"TRIPS"is"only"to"reinforce"some"of" these"agreements,"adding"some"specific"and"more"rigorous"rules." 3) The"obligation"to"the"member"states"to"protect"intellectual"property" rights" establishing" sanctions" severe" enough" to" product" deterrent" effects"(both"civil"and"criminal"sanctions)." 4) The"dispute"settlement"between"the"members"of"the"WTO"regarding" to"Intellectual"Property,"according"to"the"general"system"of"the"WTO.""" 5) Some"transition" provisions" for" the" entering" into"force" of" this" legal" framework"which"considers"the"special"needs"of"the"least"developed" countries11."""" " - WIPO."In" this" field"of"Intellectual"Property,"time" before"the"WTO"was" created," there" was" an" international" body" with" the" aim" «to" encourage" creative" activity" and" promote" the" protection" of" intellectual" property" throughout"the"World»12."The"World"Intellectual"Property"Organization" (WIPO)"was"created"in"1967"and"it"is"now"one"of"the"specialized"agencies" !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 10"On"its"objectives"and"instruments,"see"CALVO"HORNERO,"A.,"Integración$económica$y$regionalismo:$ Principales$acuerdos$regionales,"3rd"Ed.,"Ed."Ramón"Areces,"Madrid,"2003,"pp."105"ff."" 11"See"REQUEIJO,"J.,"Economía$Mundial,"4th"Ed.,"McGraw"Hill,"Madrid,"2011,"pp."26"ff."" 12"Desiderata"of"the"Convention"Establishing"the"World"Intellectual"Property"Organization"(Signed"at" Stockholm"on"14"July"1967"and"as"amended"on"28"September"1979).""" ! 6" of"United"Nations13."The"WIPO"consists"on"188"member"states,"among" them"Spain"since"its"foundation"in"1970"and"the"Philippines"since"1980." But"neither"is"the"WIPO"a"new"organization,"it"is"the"successor"of"the"BIRPI" (Bureax" Internationaux" Réunis" pour" la" Protection" de" la" Propriété" Intellectuelle" –United" International" Bureaux" for" the" Protection" of" Intellectual"Property),"set"in"1893"with"the"scope"to"administer"the"Paris" Convention" for" the" Protection" of" Industrial" Property," so" as" the" Berne" Convention" for" the" Protection" of" Literary" and" Artistic" Works." Nevertheless,"the"WIPO"assumed"more"competences"that"originally"had" the" BIRPI," playing" also" an" important" role" regarding" the" promotion" of" technology"transfer"and"economic"development." " Once"summarised"the"international"context14,"we"will"focus"on"the"role"that" Competition"and"the"protection" of" innovations" play" in" the" processes" of" regional" economic"integration."For"obvious"reasons,"we"will"mainly"consider"the"European" experience" and" the" evolution" of" these" policies;" so" as" the" importance" that" the" strengthening"of"these"politics"may"have"in"the"proceeding"of"economic"integration" in"the"ASEAN."" " III. COMPETITION$POLICY$IN$THE$EUROPEAN$PROCESS$OF$ECONOMIC$ INTEGRATION$ " Economic"integration"processes"have"a"twofold"dimension:"a)"An"external" dimension"which"means"the"adoption"of"the"measures"needed"to"remove"the"tariffs" and"barriers"to"trade"within"the"involved"countries;"and"b)"an"internal"dimension" which"requires"the"promotion"of"free"competition"within"the"participating"countries." The"first"perspective"requires"the"positive"agreement"between"the"parties"to"reduce" the"obstacles"to"trade,"so"as"to"provide"the"same"treat"to"third"parties."Once"achieved" these"agreements,"integration"is"fulfilled,"but"this"does"not"imply"the"existence"of" proper"competition"inside"the"integrated"area."" " A" more" active" approach" is" needed" to" ensure" the" proper" functioning" of" a" common" market" under" competition" circumstances." In" Europe," since" the" very" European"Coal"and"Steel"Community"treaty"(ECSC),"some"regulation"of"competition" in"the"affected"markets"(coal"and"steel)"was"established"with"the"aim"to"promote" competition" between" the" companies" involved" in" them15." But" the" objectives" of" competition"policy"go"beyond"the"establishment"and"proper"functioning"of"a"unitary" !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 13"Actually,"the"WIPO"was"created"by"the"Convention"Establishing"the"World"Intellectual"Property" Organization"(into"force"on"25"April"1970),"and"it"only"became"a"specialized"agency"of"the"United" Nations"in"1974."" 14"The" author" apologies" for" the" excessive" simplification" when" dealing" with" these" international" organizations"and"the"international"framework."The"limitation"of"time"and"space"forces"us"to"just"give" a" superficial" view" of" their" functioning," as" we" will" focus" in" the" importance" of" competition" and" intellectual"property"policies"so"as"their"role"in"the"processes"of"economic"integration.""""" 15"On"the"process"of"economic"integration"in"Europe,"see"CALVO"HORNERO,"A.,"Fundamentos$de$la$ Unión$Europea,"3rd"ed.,"Ed."Ramón"Areces,"Madrid,"2014;"GOYDER,"D.G.,"EC$Competition$Law,"Oxford" University"Press,"Oxford,"2003,"sp."pp."16"ff."" ! 7" market,"they"also"promote"an"efficient"resource"allocation,"foster"innovation"and" technical"development"so"as"the"intertwinement"with"the"international"economy16."" " The"first"and"main"goal"of"the"Competition"policy"in"Europe"was"to"prevent" the" obstacles" to" the" trade" of" goods" and" services17." This" policy" was" intended" to" contribute" to" the" construction" of" the" community" based" on" the" market" economy" principles"and"free"competition."The"functioning"of"a"single"internal"market"depends" on"the"effectiveness"of"competition"policy,"especially"by"means"of"rules"to"ensure" that" obstacles" to" trade" (that" had" already" been" removed" within" the" economic" integration"process)"will"not"be"substituted"by"other"kind"of"restrictions,"both"of" public"or"private"origin."" " The" processes" of" economic" integration" and," in" particular," the" creation" of" single" markets" produce" necessarily" an" increase" of" competition," for" the" national" companies"must"now"compete"not"only"with"other"domestic"rivals,"but"also"with"the" producers" of" other" countries." This" phenomenon" fosters" an" increase" in" the" investments" and" the" progress" of" the" economic" activity" in" the" region," as" the" companies"must"be"more"competitive"in"the"production"and"commercialization"of" their"goods."Integration"also"triggers"a"surge"of"mergers"and"acquisitions,"as"the" companies"will"have"to"adapt"their"resources"and"installations"to"operate"at"a"new" dimension." The" processes" of" economic" integration" of" companies," such" as" international" mergers" and" acquisitions" are" an" indicative" that" the" regional" integration"is"becoming"a"reality."Along"with"that,"competition"in"a"common"market" fosters"the"specialization"of"the"national"industries"in"the"production"of"those"goods" or" services" in" which" they" have" a" comparative" advantage." This" implies" a" better" allocation"of"resources"as"the"countries"may"specialise"in"the"production"of"those" goods"that"they"can"manufacture"at"lower"prices"and"higher"quality,"at"the"same"time" that"the"other"countries"may"reduce"the"production"of"the"goods"that"they"can"only" offer"at"higher"prices,"deviating"these"resources"in"the"production"of"the"better"gifted" industries."" " The" implementation" of" Competition" Law" at" a" Community" level" has" been" attributed"to"the"European"Commission,"which"has"to"cooperate"with"the"national" competition"authorities"to"the"effectivity"of"the"rules."In"particular,"the"sphere"of" activity"of"the"European"Commission"are"those"practices"that"involve"at"least"two" member"states"or"which"may"produce"effects"at"a"community"scale."National"cases" remain"to"the"competence"of"national"authorities." " The"main"rules"of"European"Competition"Law"derive"nowadays"from"articles" 101-109"of"the"Treaty"on"the"Functioning"of"the"European"Union"(TFEU)18,"so"as" !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 16"On"the"role"that"Competition"Law"has"played"in"the"process"of"economic"integration"in"Europe,"see" FONT"GALÁN,"J.I.,"La$libre$competencia$en$la$Comunidad$Europea,"Studia"Albornotiana,"Bolonia,"1986," sp."pp."25"ff."GERADIN,"D.,"Competition$Law$and$Regional$Economic$Integration.$An$Analysis$of$the$ Southern$ Mediterranean$ Countries," World" Bank," Washington," 2004."On" the" goals" of" Competition" Policy"within"the"process"of"European"integration,"see"BISHOP,"S."/"WALKER,"M.,"The$Economics$of$EC$ Competition$Law,"2nd"Ed.,"Sweet"&"Maxwell,"London,"2002." 17"Thus,"article"3.f)"of"the"Treaty"establishing"the"European"Economic"Community"(1957),"considers" as" one" of" the" fundamental" policies" of" the" EEC" «the" establishment" of" a" system" ensuring" that" competition"shall"not"be"distorted"in"the"Common"Market."" 18"Treaty"of"Lisbon,"signed"on"13"December"2007."" ! 8" from"dozens"of"Regulations"and"Directives"implementing"these"norms."This"field"of" law"is"built"on"the"basis"of"three"different"proceedings:"" A) The"prevention"and"sanctioning"of"anticompetitive"behaviours."Articles" 101" and" 102" declare" contrary" to" the" common" market" the" practices" consisting"in:" a. Cartels:" Any" agreement" between" undertakings," decisions" by" associations"of"undertakings"and"concerted"practices"which"may" affect" trade" between" Member" States" and" which" have" as" their" object" or" effect" the" prevention," restriction" or" distortion" of" competition" within" the" internal" market." In" particular," the" following"behaviours"are"forbidden:"1)" the"fixation"of"prices"or" other"trade"conditions;"2)"the"limitation"or"control"of"production," markets," technical" development" or" investment;" 3)" the" share" of" markets" or" sources" of" supply;" 4)" the" discrimination" in" the" conditions" applied" to" equivalent" transactions" to" other" trading" parties,"producing"a"competitive"disadvantage;"5)"the"imposition" of"tying"contracts."""""" b. Abuse"of"a"dominant"position"by"one"or"more"undertakings"within" the"internal"markets"affecting"trade"between"member"States."In" particular,"these"abuses"may"consist"in:"1)"The"imposition"of"unfair" purchase" or" selling" prices" or" unfair" trading" conditions;" 2)" the" limitation"of"production,"markets"or"technical"development"to"the" prejudice" of" consumers;" 3)" applying" dissimilar" conditions" to" equivalent" transactions" with" other" trading" parties," creating" a" competitive"disadvantage;"4)"the"imposition"of"tying"contracts."" With" regards" to" cartels" and" the" abuse" of" a" dominant" position," the" intervention" of" the" European" Competition" policy" plays" a" role" in" both" ways:"sanctioning"the"conclusion"of"such"behaviours"and"preventing"and" deterring" the" undertakings" to" collude" such" practices" in" prejudice" to" competition."" " B) The" control" of" economic" concentrations." As" already" mentioned," as" a" consequence"of"the"enlargement"of"the"market,"European"companies"face" the"need"to"adequate"their"dimensions"to"a"new"scale."This"fosters"the" conclusion"of"mergers"and"acquisition"as"a"regional"level."But"some"of" these" agreements" may" lead" to" monopolization" and" the" detriment" of" competition,"when"just"one"or"a"little"number"of"companies"produce"any" kind" of" good" or" services." Those" cases" must" be" monitored" by" some" institution" (the" European" Commission)" to" ensure" that" they" will" not" produce"any"harmful"effect"for"competition"in"the"common"market."""" " C) The"control"of"state"aids."Competition"within"a"common"market"requires" to"ensure"that"the"States"do"not"give"a"more"favourable"treatment"or"more" advantageous"economic"conditions"to"the"local"companies."To"this"extent," in"the"European"Union"there"is"a"procedure"in"order"to"control"that"the" state" aids" given" by" the" public" institutions" to" private" companies" are" conferred"on"the"basis"of"the"non-discrimination"principle"and"that"the" granting"of"those"measures"–which"may"consist"in"an"economic"advantage" ! 9" or"other"kind"of"preferential"treatment-"do"not"distort"competition"in"the" functioning"of"the"common"market."" " Along"with"this"three"instruments,"competition"policy"is"now"evolving"to"face" other" aspects" that" may" affect" the" functioning" of" the" common" market" under" competitive" circumstances." As" will" be" analysed" bellow," the" European" Union" is" working"in"the"late"decades"to"promote"competition"within"the"sectors"that"used"to" work"under"direct"public"intervention"(such"as"transports,"energy,"postal"service," telecommunications…)."Another"objective"of"Competition"policy"is"to"find"a"proper" balance"between"the"promotion"of"free"competition"and"the"fostering"of"innovation" by"granting"exclusive"rights"to"their"creators,"such"as"patents"or"copyright."Finally," in"the"latter"years"the"main"concern"in"the"implementation"of"Competition"policy"is" the" so-called" «private" enforcement" of" Competition" Law»" which" means" the" possibility"for"particulars"to"promote"the"implementation"of"Competition"Law"in" private" causes," and" especially" the" possibility" for" particulars" to" claim" for" a" compensation"in"the"cases"in"which"they"have"suffered"a"damages"a"consequence"of" any"breach"of"Competition"rules19."We"will"go"over"this"issue"further"on."" " IV. THE$PROMOTION$AND$PROTECTION$OF$INNOVATIONS:$INTELLECTUAL$ PROPERTY$POLICY$ " Competition"policy"promotes"the"functioning"of"common"market"granting" that"the"companies"of"all"the"Member"States"may"compete"without"distortion,"basing" this" competence" in" their" better" performance" in" the" exploitation" of" resources," production" of" goods," delivery" of" services" or" the" quality" of" their" offer." But" this" competition"is"based"on"a"static"premise"–the"competition"in"the"current"market,"for" existing"products-,"and"it"does"not"incorporate"a"dynamic"prospective,"which"shall" mean"the"introduction"of"measures"to"promote"the"development"of"new"and"better" products"or"services,"so"as"the"technical"and"economic"progress."This"latter"goal"is" achieved"by"the"interaction"of"competition"policy"and"the"effective"protection"of" intellectual" property" rights." Intellectual" property" rights" offer" a" proactive" competitiveness"policy"by"the"promotion"of"innovation."" " The" Treaty" on"the" Functioning" of" the" European" Union" is" aware" of" the" importance"of"fostering"innovation"in"relation"with"competition"policy,"and"thus,"it" states"that"competition"rules"–mainly"regarding"to"cartels-"shall"not"sanction"those" agreements"which"contributes"to"improving"the"production"or"distribution"of"goods" or"to"promoting"technical"or"economic"progress,"while"allowing"consumers"a"fair" share"of"the"resulting"benefit,"and"which"does"not"impose"restrictions"which"are"not" indispensable"to"the"attainment"of"these"objectives,"neither"afford"the"possibility"of" eliminating"competition"in"respect"of"a"substantial"part"of"the"products"affected20."" " In"this"context,"the"efforts"of"the"European"Union"are"to"harmonize"the"legal" proceedings"of"the"member"States"to"protect"intellectual"property"rights"within"the" !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 19"One"of"the"best"works"on"this"topic"so"far"is"KOMNINOS,"A.P.,"EC$Private$Antitrust$Enforcement:$ Decentralised$application$of$EC$Competition$Law$by$national$courts,"Hart,"Portland-"Oregon,"2008."Also" see"MARCOS,"F."/"SÁNCHEZ"GRAELLS,"A.,"“Damages"for"breach"of"the"EC"antitrust"rules:"harmonising" Tort"Law"through"the"back"door?”,"InDret,"enero"2008."" 20"See"art."101.3"TFUE."