Chapter 3.08 Competition policy covers the rules of the European Union which enables businesses to compete on equal terms in the markets of all Member States. Free competition is a key element of an open market economy. It stimulates economic performance and offers consumers a broader choice of better-quality products and services and at more competitive prices. Competition policy consists of three areas: antitrust, State aid and liberalisation. With the antitrust rules, the Union prohibits agreements between two or more market entities if they restrict competition (cartels), abuse of a dominant market position and mergers, i.e. takeovers that significantly reduce competition on the single market. State aid is also prohibited under these rules, or a subsidy or any other aid provided by a Member State that distorts competition, with certain exceptions where such aid may be justified if it is in the public interest. Liberalisation refers to overcoming state monopolies in certain essential sectors such as energy, telecommunications, transport, water, and the postal sector.