The role of the European Union and the British Government

The European Union and the British Government ensure businesses are competitive.

EU laws aim to stop anti-competitive practices

The European Union has laws preventing businesses from:

• fixing prices to maximise profits
• restricting the supply of goods so prices go up

The European Union investigates the merging of large businesses across member countries. A merger [Merger: When two businesses join together to form one larger business. ] may be banned or allowed with conditions.

The British Government through the Competition Commission [Competition Commission: Investigates and advises the Government on anti-competitive business practices including mergers. Before 1999 it was the Monopolies and Mergers Commission. ] investigates business mergers when:

• 25% or more of the whole market will be in the new business' hands
• the assets of the companies to merge are above a certain value.

The Secretary of State is advised by the Competition Commission on whether or not a merger should be allowed.