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Saydé, Alexandre --- "Freedom as a source of constraint: expanding market discipline through free movement" [2017] ELECD 266; in Koutrakos, Panos; Snell, Jukka (eds), "Research Handbook on the Law of the EU’s Internal Market" (Edward Elgar Publishing, 2017) 29

Book Title: Research Handbook on the Law of the EU’s Internal Market

Editor(s): Koutrakos, Panos; Snell, Jukka

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781783478095

Section: Chapter 3

Section Title: Freedom as a source of constraint: expanding market discipline through free movement

Author(s): Saydé, Alexandre

Number of pages: 25

Abstract/Description:

This chapter describes the amplifying effect of free movement upon market discipline. Market discipline can be defined as the constraining force collectively exerted by competitors present on a market. As the number of potential outlets is limited, economic agents offering goods and services are exposed to the risk of being displaced by competitors. In order to mitigate this risk and preserve or increase their market shares, they are forced to adapt their behaviour: this constraining force is hereinafter designated as market discipline. Academic research in the area of free movement law is often limited to a description of the legal obligations falling upon Member States, chiefly national treatment and mutual recognition. The present chapter deals with another – less immediate but no less important – constraint originating in free movement, namely market discipline. Free movement increases the degree of market discipline within every Member State, by exposing domestic producers to competitive pressures coming from other Member States. In order to explore this amplifying effect of free movement upon market discipline, it is useful to establish first a typology of the policies available to Member States when regulating cross-border activities (Part 1). This typology will permit a structured approach to the effects of free movement on market discipline, and in particular of the fundamentally different impacts of national treatment and mutual recognition (Part 2). Member States may adopt one of three distinct policies when regulating cross-border activities: they may treat cross-border activities worse, equally or better than they do domestic ones.