Beyond the Economic Approach

2020 ◽  
Vol 37 (1) ◽  
pp. 41-55
Author(s):  
Barbara Jedličková
Keyword(s):  
Competition Law ◽  
Consumer Welfare ◽  
Welfare Economics ◽  
Economic Approach ◽  
Modern Approach

Due to the nature of competition law, which deals with business behaviour affecting the economy, it is not surprising that it is economic and not legal theories which have shaped the ‘modern’ approach. The dominant theoretical stream in competition law is welfare economics, informed by the neoliberal thinking of the Chicago and Post-Chicago Schools. In order to determine the anti-competitiveness of certain conduct, welfare economics applies a consequentialist approach by determining economic harm; anticompetitive harm occurs if total or consumer welfare and efficiency decrease.

The European Court of Justice and the More Economic Approach to EU Competition Law—Is the Tide Turning?

2019 ◽  
Vol 64 (2) ◽  
pp. 172-213 ◽  
Author(s):  
Anne C. Witt
Keyword(s):  
Competition Law ◽  
Consumer Welfare ◽  
European Court Of Justice ◽  
Economic Approach ◽  
Court Of Justice ◽  
European Court ◽  
Eu Competition Law ◽  
Eu Competition Policy ◽  
Legal Concepts ◽  
More Economic Approach

In the late 1990s, the European Commission embarked on a mission to bring EU competition policy more into line with contemporary economic theory. Over a period of ten years, it systematically revised key legal concepts of all three pillars of EU competition law. Most importantly, it adopted the consumer welfare aim, revised its understanding of competitive harm and countervailing effects accordingly, and committed itself to carrying out more in-depth assessments of the investigated conduct’s effects instead of relying on form-based presumptions of illegality. Initially, many tenets of the more economic approach were in conflict with the case law of the European Court of Justice, which had a broader understanding of the aims of EU competition law. However, after a few initial set-backs for the Commission, several recent judgments in cases such as MEO, Intel, Post Danmark I, and Cartes Bancaires suggest that the Court’s understanding of EU competition law is evolving and that it is willing to embrace at least a few of the Commission’s revised principles. In particular, it is adopting a more effects-based approach to assessing business conduct and is cautiously curbing its former concept of harm in exclusionary situations. At the same time, however, it continues to adhere to many of its former freedom- and fairness-based principles, so that a number of uncertainties and inconsistencies remain.

8 The Law And Economics Of Vertical Restraints

2012 ◽  
Author(s):  
Geradin Damien ◽  
Layne-Farrar Anne ◽  
Petit Nicolas
Keyword(s):  
Law And Economics ◽  
Competition Law ◽  
Legal Framework ◽  
Vertical Restraints ◽  
Economic Approach ◽  
Brand Competition ◽  
Eu Competition Law ◽  
Early Case ◽  
The 1960S ◽  
Independent Distribution

This chapter examines independent distribution and how it is treated under EU competition law. Since the 1960s, it is acknowledged that vertical agreements can entail restrictions of competition—generally called ‘vertical restraints’—which deserve competition law scrutiny. While the early case law and Regulations adopted in the field focused primarily on restrictions of intra-brand competition, a more liberal and economic approach was introduced with the promulgation of Regulation 2790/1999. The new legal framework rested on a basic economic premise: the ability of a vertical agreement to produce anticompetitive effects hinges predominantly on the market power of the parties to the agreement. With the expiry of Regulation 2790/1999 on 31 May 2010, but also with the growth of large retailers throughout Europe and the rise of internet distribution, the Commission initiated a review process in July 2009 which culminated in the adoption of Regulation 330/2010 and of a new set of Guidelines.

Part II Economic Regulation, 11 Competition

2021 ◽  
Author(s):  
Muchlinski Peter T
Keyword(s):  
Market Power ◽  
Multinational Enterprises ◽  
Competition Law ◽  
Consumer Welfare ◽  
Economic Regulation ◽  
Global Networks ◽  
Policy Debates ◽  
Production And Distribution ◽  
Competition Rules ◽  
National Approach

This chapter studies competition law (antitrust law in US terminology), which protects competition to maximize consumer welfare. Multinational enterprises (MNEs) may use their market power to distort competitive conditions. Unlike purely domestic firms, MNEs can do this in a transnational context. Therefore, regulating MNE competition involves not only substantive rules but also jurisdictional questions which have led to extraterritoriality conflicts. The chapter then examines the competition issues arising from the market power of MNEs operating global networks of production and distribution in often concentrated markets. It also assesses whether competition law should control MNE entry and establishment to preserve the national economy from harmful foreign competition, involving issues of industrial policy and national security. Moreover, MNE operations challenge the hitherto predominantly national approach to competition regulation. To date, there has been little progress towards global competition rules, but it remains a worthwhile question, especially in the context of sustainable development, which has been introduced into competition policy debates in recent years.

1. Introduction to Competition Law

2019 ◽  
pp. 1-74
Author(s):  
Alison Jones ◽  
Brenda Sufrin ◽  
Niamh Dunne
Keyword(s):  
Economies Of Scale ◽  
Competition Law ◽  
Consumer Welfare ◽  
Perfect Competition ◽  
Competition Analysis ◽  
Elasticity Of Demand ◽  
Eu Competition Law ◽  
Demand Curves ◽  
Producer Surplus ◽  
Total Welfare

This chapter provides an introduction to, and basis for, the material discussed in the subsequent chapters. It introduces some relevant concepts of microeconomics including demand curves, consumer and producer surplus, elasticity of demand, and economies of scale and scope. It discusses the model of perfect competition and the concepts of allocative, productive and dynamic efficiency; the problems in competition terms of monopoly and oligopoly; and the concept of welfare, particularly consumer welfare and total welfare. It considers various schools of competition analysis and theories and concepts relevant to competition law. It discusses the possible objectives of competition law, and particularly considers what objectives are pursued by EU competition law. The chapter also looks at US antitrust law; competition law and the digital economy; competition law and regulation; and at some basic issues in the application of EU competition law.

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.

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