Anticompetitive Agreements

2020 ◽  
pp. 49-64
Author(s):  
David J. Gerber
Keyword(s):  
Economic Development ◽  
Economic Analysis ◽  
Competition Law ◽  
Consumer Welfare ◽  
Consumer Prices ◽  
Limited Enforcement ◽  
The World ◽  
Competition Laws ◽  
Global Patterns ◽  
Case Based

Chapters 5, 6, and 7 examine the targets of competition law. Key questions: Why is the conduct considered harmful? How is it pursued—for example, which remedies are used? What are the incentives and obstacles in pursuing the conduct? Where is enforcement likely—global patterns? Chapter 5 answers these questions for the two types of anticompetitive agreements. The first type includes horizontal agreements—that is, agreements between competitors. These are the most commonly pursued and heavily penalized violations in the world. Where such an agreement influences a market, it necessarily restrains competition, reducing efficiency, harming consumer welfare, impinging on economic freedom, and interfering with economic development. All competition laws target them, but they also allow justifications such as the need for cooperation in research, and competition laws vary significantly in the extent to which they allow such justifications. Vertical restraints—for example, between a manufacturer and a distributor—have a very different profile. They include, for example, agreements to fix consumer prices and to divide markets. Economists call for case-based analysis to determine their effects, and often such effects are difficult to prove, so competition laws in which economic analysis is central typically face limited enforcement against them. Many other competition laws contain specific rules condemning them.

The Goals and Uses of Competition Law

2020 ◽  
pp. 17-28
Author(s):  
David J. Gerber
Keyword(s):  
Economic Development ◽  
Economic Freedom ◽  
Competition Law ◽  
Consumer Welfare ◽  
Competition Laws ◽  
The Law

All competition laws have goals, and these goals direct decisions about what the law is and how it should be enforced. Some goals are set out in statutes; others are set by competition law institutions and courts (these are usually consistent with the formal statutory goals, but not always) formal government goals. In order to understand a specific competition law regime, it is necessary to identify the goals that shape them. Some goals are economic. These include efficiency, consumer welfare, and economic development. Other goals include fairness, privacy, and economic freedom. This chapter identifies each of these goals, probes the reasons for them, traces relationships among them, and follows some of their consequences. A key question here is: What factors determine how much influence stated goals will have on the decisions of institutions? Some institutions and individuals pursue goals that are not stated, but rather serve their own interests (e.g., corruption). The chapter refers to these goals, their origins, and their influence.

3. The goals and scope of competition and antitrust laws

2021 ◽  
pp. 28-37
Author(s):  
Ariel Ezrachi
Keyword(s):  
South Korea ◽  
Competition Law ◽  
Consumer Welfare ◽  
Antitrust Law ◽  
Competitive Process ◽  
Eu Competition Law ◽  
Antitrust Laws ◽  
The World ◽  
Competition Laws ◽  
The Eu

‘The goals and scope of competition and antitrust laws’ evaluates the goals and scope of competition and antitrust laws. Competition laws seek to protect the competitive process in the marketplace from companies that seek to distort it. By safeguarding free and fair markets, competition laws promote consumer welfare as well as efficiencies in the marketplace. While key competition law principles are similar across the world, competition laws are not internationally uniform, but are instead customized by each jurisdiction. A comparison can be made between US Federal Antitrust Law and the EU competition law. There are also other jurisdictions that apply competition laws, including China, Japan, and South Korea.

Is protecting sunk investments an economic rationale for antitrust law?

2020 ◽  
Author(s):  
Darryl Biggar ◽  
Alberto Heimler
Keyword(s):  
Alternative Hypothesis ◽  
Competition Law ◽  
Consumer Welfare ◽  
Antitrust Law ◽  
Market Participants ◽  
Specific Investments ◽  
Trade Offs ◽  
Trading Partners ◽  
Competition Laws ◽  
Economic Foundation

Abstract In recent years, the economic foundation of antitrust law is increasingly being called into question. The hypothesis that antitrust law seeks to promote consumer welfare has historically been extremely popular but in recent years has come under attack. In part, this is due to the fact that neither the law, nor the decisions of competition law enforcers, can be fully explained as consistent with a strict consumer welfare standard. Neither do competition laws promote a textbook concept of total economic welfare, neither in their wording, nor in the way they are enforced. Some commentators argue that competition law should protect the competitive process, but this approach lacks a foundation in welfare economics and therefore lacks the ability to make basic trade-offs between desirable goals. This article puts forward an alternative hypothesis, which focuses on the sunk, relationship-specific investments made by market participants. We propose that an important, and overlooked, role of competition law is to protect trading partners from the threat of hold-up, where it is unreasonable for the parties to use conventional mechanisms to protect those sunk investments themselves. This approach can help to explain features of competition law and law enforcement that cannot be explained by the traditional consumer welfare or total welfare frameworks. We suggest that this approach offers promise as providing a consistent, comprehensive, economic foundation for competition law.

Competition Law in Developing Countries

2020 ◽  
Author(s):  
Cheng Thomas K
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Law Enforcement ◽  
Developing Country ◽  
Competition Law ◽  
Competition Law Enforcement ◽  
Competition Laws ◽  
The Relationship

This book explores the relationship between competition law and economic development, which takes on growing importance as more and more developing countries have adopted competition law in recent years. The work tackles two principal questions. The first is whether competition law enforcement promotes growth, which helps to determine how seriously developing countries should enforce their competition laws. The second is how developing countries should craft their competition law rules in light of the need to incorporate development concerns, the need to reflect the special economic characteristics of developing countries, and the need to improve the administrability of competition law rules to suit the enforcement capacity of developing country authorities.

Cartel Damages

2020 ◽  
Author(s):  
Veljanovski Cento
Keyword(s):  
Economic Theory ◽  
Economic Analysis ◽  
Competition Law ◽  
Case Law ◽  
Pragmatic Approach ◽  
Practical Guide ◽  
Bank Of England ◽  
Competition Laws ◽  
The Subject ◽  
Law And Legislation

This book represents a comprehensive, practical guide on the law, economics, and measurement of cartel damages under UK and European competition laws. It draws together the most recent research on cartels, economic analysis, empirical techniques, case law, and legislation to examine how the quantification of losses suffered by those harmed by a cartel are, and could be, applied under European and UK competition laws. Written with the practitioner in mind, the book displays a rigorous yet pragmatic approach to the subject. Detailed discussions of leading cases complement the treatment of the application of economic theory and empirical techniques in competition law and litigation. Three appendices provide the reader with quick reference guides to statistics on European Commission Cartel Decisions (1999 to 2019), Bank of England ‘base rate’ (1980 to 2019), and where to find key documents and information. The book is a practical guide to issues of increasing importance and relevance in competition law.

1. Competition policy and economics

2018 ◽  
Author(s):  
Richard Whish ◽  
David Bailey
Keyword(s):  
Market Power ◽  
Market Share ◽  
Competition Policy ◽  
Competition Law ◽  
Consumer Welfare ◽  
Market Definition ◽  
Economic Context ◽  
Competition Laws ◽  
Competition Process

This chapter provides an overview of competition law and its economic context. Section 2 describes the practices that competition laws attempt to control in order to protect the competition process. Section 3 examines the theory of competition and gives an introductory account of why the effective enforcement of competition law is thought to be beneficial for consumer welfare. Section 4 considers the expected functions of a system of competition law. Section 5 then introduces two key economic concepts, market definition and market power, that are important to a better understanding of competition policy. The chapter concludes with a table of market share figures that are significant in the application of EU and UK competition law.

scholarly journals Is the Consumer Welfare Obsolete? A European Union Competition Law and Competition Perspective

Prolegómenos ◽  
2021 ◽  
Vol 24 (47) ◽  
pp. 55-78
Author(s):  
Frédéric Marty
Keyword(s):  
Competition Law ◽  
Consumer Welfare ◽  
The United States ◽  
Eu Competition Law ◽  
History Of ◽  
Competition Laws ◽  
Competition Process ◽  
Market Practice ◽  
Sole Criterion ◽  
More Economic Approach

In 2005, the European Commission advocated for a more economic approach to enforcing competition laws. The sole criterion for assessing the lawfulness of a market practice should be the appraisal of its net effect on consumer welfare. The Court of Justice was reluctant to adopt such an approach until its 2017 Intel Judgment. Its endorsement—which is debatable insofar as the judgment may give rise to different interpretations—may appear paradoxical in that it is concomitant with a sharp challenge to the consumer welfare criterion in the United States. The purpose of this article is to retrace the history of this criterion, particularly its adoption in the context of EU competition law. We aim to show that the criticisms of the effects-based approach can be addressed not by moving away from the consumer welfare criterion but by integrating it into a broader perspective that also takes into account the protection of the competition process itself.

An Essay: Can Competition Law and Policy Be Made Relevant for Inclusive Growth of Developing Countries?

2020 ◽  
Vol 65 (1) ◽  
pp. 164-172
Author(s):  
Frederic Jenny
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Competition Law ◽  
Recent Experience ◽  
Inclusive Growth ◽  
African Countries ◽  
Law And Policy ◽  
National Competition ◽  
Competition Laws ◽  
Sub Saharan

In their book Making Markets Work for Africa, Eleanor Fox and Mor Bakhoum argue that competition law and policy can be made more relevant for the inclusive growth of developing countries if a bottom-up approach is followed. They suggest that the most detrimental obstacles to competition faced by each country differ with their stage of economic development and that national competition laws should therefore be designed so as to allow each country to address the specific challenges it faces. This essay discusses the approach of the authors and points to some areas where further research is warranted in light of the recent experience of Sub-Saharan African countries.

Competition Law and Antitrust: A Global Introduction and Guide

2020 ◽  
pp. 1-8
Author(s):  
David J. Gerber
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Economic Development ◽  
Competition Law ◽  
Development Economic ◽  
Central Question ◽  
Economic Stability ◽  
Public Interests ◽  
Private Interests ◽  
Competition Laws

Competition law shapes the conduct of business firms by deterring conduct that can harm both private interests—businesses and their employees, owners, and customers—and public interests such as the efficiency of markets, economic development, economic growth, and perhaps even social and political and economic stability. Despite its often immense importance, competition law is often poorly understood, and there are major differences among competition law regimes. This Guide makes competition law understandable and accessible to people everywhere. It provides a new set of tools that help the reader to make sense of competition law in any country and to recognize differences among them. It presents an integrated picture of competition law that is both domestic and global, and it uses this view to cut through the vast amount of data about competition laws and shape it to maximize access and understanding. It asks a central question: What factors influence decisions? Decisions in any competition law regime are often influenced by factors outside the host country, so the Guide shows how competition laws influence each other. It pays particular attention to the most influential competition law regimes—US and EU—and notes patterns of competition law in East Asia, Latin America, and developing countries.

Adam Smith, the Competitive Process, and the Flawed Consumer Welfare Standard

2020 ◽  
Vol 69 (1) ◽  
pp. 3-13
Author(s):  
Warren Grimes
Keyword(s):  
Adam Smith ◽  
Competition Law ◽  
Consumer Welfare ◽  
Allocation Of Resources ◽  
Competitive Process ◽  
Narrow Focus ◽  
Consumer Prices ◽  
Distribution Chain ◽  
The Impact

Abstract Scottish economist Adam Smith wrote in 1776 that the collective buying and selling of individuals would result in the preferred allocation of society’s resources. That insight has endured and is the basis for the competition law goal of fostering and protecting the competitive process. That goal, with venerable roots on both sides of the Atlantic, has been sidetracked by emergence of the consumer welfare standard, which is now preeminent in competition law analysis. The narrow focus of the consumer welfare standard has led to confusion and misdirected decisions that do not adequately protect the competitive process. I point to confusion about who is the buyer and who is the seller in many transactions, and describe why that classification should, in any event, be irrelevant in applying competition law. When competition is distorted, the central goal of protecting the process and ensuring a preferred allocation of resources is undermined, regardless of the impact on the consumer. The proper welfare standard is unconcerned with where the harm occurs. The standard focuses on anticompetitive conduct at any level of the distribution chain and regardless of whether the anticompetitive effects are directed upstream at sellers or downstream at buyers. The symmetric standard is rooted in competition law decisions on both sides of the Atlantic; it is sound in theory and, compared to the consumer welfare standard, is easier to explain and apply. It more comfortably honors the broader goals of competition, including promoting entry, innovation, and choices for both entrepreneurs and consumers. I assess how this symmetric welfare standard would apply to mergers and classic predatory or exclusionary conduct. The standard offers hope of simplifying analysis and better serving ancillary goals of competition. Fostering and preserving efficiency, enhancing output, and maintaining low consumer prices are among the highly valued benefits of the competitive process, but they are not determinative. The focus must remain on the central goal of preserving the competitive process.

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