terventionist than U.S. law and it has been criticized for ignoring economic efficiency.
Article 3 of the EEC Treaty lists as an activity of the Community "the institution of a system ensuring that competition in the common market is not distorted." Competition policy was singled out as a key factor in the pursuit of the broad objectives listed in Article 2 for two main reasons. First, the drafters of and adherents to the Treaty made a choice that the market would play a central, if not exclusive, role in the way of life. Competition is an essential part of the market mechanism since the availability of choice between goods and services establishes a link between the success of the undertaking and its ability to satisfy customers' wishes. Second, because competition reinforces the provisions of the Treaty aiming at the removal of barriers between the economies of the Member states, competition policy contributes to the creation and preservation of a market that is common.
It is this last reason which is most important in understanding EC competition law and policy. The economic purpose of the Community is to create a unified market out of the separate individual markets in Europe. Business entities, however, often agree to limit distribution of goods in certain geographic areas by designating certain distributors as the only dealers in these areas for the goods of certain manufacturers. These arrangements are not necessarily bad from an economic standpoint, since they are often used to open new markets for goods. Providing protection for a distributor in a specific geographical area often motivates that distributor to actively promote the products while ensuring that the distributor is not undercut by other distributors selling the same product.
From the standpoint of the Community, however, such arrangements go against the objective of creating an integrated market. Arrangements which designate certain geographic...