scholarly journals The Role of Economic Efficiency in Competition Law

2017 ◽  
Vol 10 (16) ◽  
pp. 127-153
Author(s):  
Zbigniew Jurczyk
Keyword(s):  
Economic Efficiency ◽  
Competition Law ◽  
Consumer Welfare ◽  
Dynamic Efficiency ◽  
Current Application ◽  
Dominant Position ◽  
Evaluation Standard ◽  
The Us ◽  
Antitrust Analysis

The main focus of the paper is the function of economics in the current application of competition law. While advocating further economization of the law, it is seen as necessary to widen the extent to which aspects of economic efficiency encompassing static and dynamic efficiency are taken into consideration in an antitrust analysis. Much attention is devoted to these issues, while clarifying what is meant by them, how they are to be understood and implemented in the practice of antitrust authorities, as well as discussing their importance for the promotion of innovation. It is noted that accounting for the economic efficiency aspects differently in the light of competition law allows for the assessment of the market behavior of dominant companies, which traditionally has been seen as anticompetitive. This main issue of the paper is analyzed extensively and explained using the case of Microsoft, a company accused by the US and EU antitrust authorities of abusing its dominant position on the market of operating systems in that it integrated the sale of its base product Windows OS exclusively with other applications (Media Player and Internet Explorer). The differences presented in the research part of the paper as to the way Microsoft was treated by these authorities originated in their different methodology of analysis and assessment of the effects of the sales model launched by Microsoft for products offered to the PC manufacturers and their users, in spite of the US and EU antitrust authorities adopting the same evaluation standard – consumer welfare. Aspects of dynamic efficiency adequate in the assessment of the behavior of innovative firms holding a dominant position proved to be deciding. On the other side of the Atlantic, taking into account the aspects of dynamic efficiency was crucial in coming up with a lighter assessment of Microsoft’s tying compared to the European authorities’ assessment which was based largely on the structural analysis, where the benefits arising from dynamic efficiency are not visible. It is clear from the decisions made by the Commission that it favours regulation over effects generated by competition forces at a later time.

scholarly journals Designing Competition Policy for Telecommunications

2008 ◽  
Vol 7 (4) ◽  
Author(s):  
Glen O. Robinson ◽  
Dennis L. Weisman
Keyword(s):  
Competition Policy ◽  
Consumer Welfare ◽  
Dynamic Efficiency ◽  
Short Term ◽  
Competitive Outcome ◽  
Static Efficiency ◽  
Competitive Process ◽  
Welfare Losses ◽  
Network Sharing

This paper explores the role of the essential facilities doctrine in circumscribing the scope of network sharing obligations in telecommunications. Among other things it argues that a proper application of the doctrine of essential facilities should recognize the prominence of dynamic over static efficiency in promoting consumer welfare. Regulators may be averse to recognizing these tradeoffs because unlike the behavior of prices the welfare losses from foregone innovation may be unobservable to the regulators' constituency. Moreover, an emphasis on dynamic efficiency requires the short-term regulator to take the "long view" – fostering the competitive process rather than emulating the competitive outcome.

Competition Law in Europe

2020 ◽  
pp. 103-114
Author(s):  
David J. Gerber
Keyword(s):  
Reference Point ◽  
Competition Law ◽  
Institutional Arrangements ◽  
The Other ◽  
Multiple Voices ◽  
The Us ◽  
National Boundaries ◽  
Substantive Law ◽  
European Competition Law

European competition law is the other central player in the competition law world, so an entire chapter is devoted to understanding how it works and how to deal with it. Virtually all firms operating beyond their own national boundaries need to pay attention to it, many regimes use it as a model and reference point, and its institutions have broad and often deep influence on many others. Some aspects of the substantive law are similar to US antitrust, but the similarities are sometimes misleading. For example, EU law uses economic analysis in ways that often differ from how it is used in the US. Procedural and institutional arrangements are often complicated. They represent multiple voices, as national and EU institutions function together to create, apply, and enforce competition law. The chapter reveals how this system functions and what factors guide decisions in it. It looks, in particular, at the institutional arrangements between the EU and its member states, including the role of the European Competition Network.

scholarly journals The Static-Dynamic Efficiency Trade-off in the US Rail Freight Industry: Assessment of an Open Access Policy

2018 ◽  
Vol 17 (4) ◽  
pp. 267-301
Author(s):  
Daniel Coublucq ◽  
Marc Ivaldi ◽  
Gerard McCullough
Keyword(s):  
Open Access ◽  
Price Competition ◽  
Structural Model ◽  
Consumer Welfare ◽  
Investment Behavior ◽  
Investment Incentives ◽  
Dynamic Efficiency ◽  
Static Efficiency ◽  
The Us ◽  
Network Quality

Abstract Considering the US railroad industry, which is characterized by seven integrated firms that provide freight services on tracks they own and maintain, this paper provides a structural model that allows to evaluate the potential effects of opening the rail network to new firms on prices and investment incentives. In particular, we propose a framework for analyzing the tension between static efficiency (pricing behavior) and dynamic efficiency (investment behavior). The investment behavior is rendered endogenous by means of a dynamic model where the current investment depends on the expected future profits. We then use a forward simulation procedure to analyze the effect of an open-access market structure where a new firm uses the network of one of the biggest railroad firm. Under a simple access charge equaled to the marginal cost of access, investment in network infrastructure decreases by 10% per year, leading to a significant decrease in network quality over time. Under this setting, despite the increase of price competition, the decrease in network quality leads to a fall in consumer welfare. Other types of (more evolved) access charges might even allow to relax the tension between static efficiency and dynamic efficiency, allowing more price competition while preserving investment incentives. This topic deserves further research and is beyond the scope of this paper.

The Foundations of European Union Competition Law

2011 ◽  
Author(s):  
Nazzini Renato
Keyword(s):  
Interdisciplinary Approach ◽  
Competition Law ◽  
Consumer Welfare ◽  
Case Law ◽  
Analytical Framework ◽  
Dominant Position ◽  
Eu Competition Law ◽  
The Common ◽  
Definition Of ◽  
Union Competition

Article 102 of the TFEU prohibits the abuse of a dominant position as incompatible with the common market. Its application in practice has been wide-ranging with goals as diverse as the preservation of an undistorted competitive process, the protection of economic freedom, the maximisation of consumer welfare, total welfare, or economic efficiency all cited as possible or desirable objectives. These conflicting aims have raised complex, conceptual questions such as how a dominant position should be defined, and how abuses can be assessed. This book addresses the conceptual questions underlying the test to be applied under Article 102 in light of the objectives of EU competition law. Adopting a comparative and interdisciplinary approach, the book covers all the main issues relating to Article 102, including the definition of dominance, the taxonomy of abuses, and the criteria for the assessment of individual abusive practices. It provides an in-depth doctrinal and normative commentary of the case law with the aim of establishing an intellectually robust and practically workable analytical framework for abuse of dominance.

9. Monopolies and the abuse of market power

2021 ◽  
pp. 88-105
Author(s):  
Ariel Ezrachi
Keyword(s):  
Market Power ◽  
Competition Law ◽  
Monopoly Power ◽  
Predatory Pricing ◽  
Dominant Position ◽  
Bargaining Position ◽  
The Us ◽  
Competition Laws ◽  
Power Studies

‘Monopolies and the abuse of market power’ studies monopolies and the abuse of market power. The first step in applying competition law to misuse of market power is the identification of such power. How powerful should you be to be deemed to have market power that could trigger antitrust intervention? Many jurisdictions will use the benchmark of ‘dominant position’, some will use ‘monopoly power’ or ‘monopolization’, while others may focus on the presence of ‘superior bargaining position’. There is a difference in approach between the US and EU competition laws which can be seen through several categories of abuse and monopolization, including predatory pricing, excessive pricing, and refusal to supply or license.

scholarly journals Digitale Marktmacht

2019 ◽  
Author(s):  
Maximilian Volmar
Keyword(s):  
Business Models ◽  
Competition Law ◽  
Political Influence ◽  
The Internet ◽  
Dominant Position ◽  
Digital Platforms ◽  
The Us ◽  
Definition Of ◽  
A Company ◽  
The Eu

The ascending economic and political influence of the internet platforms of the 21st century has sparked a debate about the adequate regulation of these “tech titans”. At the heart of this discussion is competition law – the field of law that was created to tame dominant companies. But when does a company truly hold such a “dominant position”? The definition of this fundamental competition law term faces numerous challenges when applied to digital platforms, from zero-price markets to the multi-sidedness of business models. This book dismantles the term into its components and shows where the methodology needs to adapt to the digital economy. In doing so, it considers the legal regimes of Germany, the EU and the US, as well as findings from legal economics.

scholarly journals Monopolization Standards in US Competition Law: Evolution and Evaluation

2020 ◽  
pp. 98-110
Author(s):  
Ivana Rakic
Keyword(s):  
Economic Efficiency ◽  
Type I Error ◽  
Competition Law ◽  
Case Law ◽  
Type I ◽  
Antitrust Law ◽  
Short Overview ◽  
Sherman Act ◽  
The Us ◽  
Economic Efficiencies

The aim of this article is to provide a short overview and analysis of the US antitrust law. Section 2 of the Sherman Act stipulates that it is unlawful to monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations. The article presents case law that reflects the evolution of monopolization standards and provides some interpretations of undertakings’ behavior that can be defined as monopolization. US practice shows that monopolization standards have changed several times, in accordance with the need to increasingly consider economic efficiencies and the consequences of making wrong decisions, which may lead to reduced innovation and other behaviors of undertakings that increase economic efficiency and improve competition, which is a type I error.

scholarly journals The Role of Innovation in the Analysis of Abuse of Dominance in Digital Markets: The Analysis of Chosen Practices of Google Search

2019 ◽  
Vol 1 (1) ◽  
pp. 111-143
Author(s):  
Beata Mäihäniemi
Keyword(s):  
Market Power ◽  
Consumer Welfare ◽  
Dominant Position ◽  
Competition Analysis ◽  
Brick And Mortar ◽  
Google Search ◽  
Abuse Of Dominance ◽  
Search Bias

Competition investigations in digital markets focus increasingly on future markets, and incentives to invest and innovate play here a larger role than in traditional "brick and mortar" industries. the article analyses the role of innovation in cases of abuse of dominance in digital markets on two levels. The first level involves the strength of incentives to invest and innovate of a digital monopolist - would he have less or more incentives to innovate and prefer to resort to practices that foreclose his competitors or leverage his market power to adjacent markets to keep its dominant position on the market? The second level identifies concrete phases of the competition analysis in which innovation considerations are contemplated in digital markets, such as objective justifications or assessing the effect of the practice on consumer welfare. Toe analysis of the role of innovation in the assessment of alleged anticompetitive abuses is conducted on the example of two concerns expressed by the EC in recent investigations into practices of Google Search, namely (1) search bias and (2) restrictions on portability of advertising data to competing advertising platforms.

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