Table of Contents

Economic Theory and Competition Law

Economic Theory and Competition Law

ASCOLA Competition Law series

Edited by Josef Drexl, Laurence Idot and Joël Monéger

The context for this book is the increasingly complex relationship between economic theory and competition law which gives rise to lively political and academic debate on the direction competition law should take in a more global and innovation-oriented market place.

Chapter 8: Appropriation of the Legal System by Economic Concepts: Should Conflicting Goals be Considered?

Anne Perrot

Subjects: economics and finance, competition policy, law and economics, law - academic, competition and antitrust law, law and economics


8. Appropriation of the legal system by economic concepts: should conflicting goals be considered? Anne Perrot* 1 INTRODUCTION The primary objective of competition policy is to enhance consumers’ welfare by favouring the development of competition on markets. This objective can take several dimensions: price competition is not the only goal of competition policy, which also favours other aspects of firms’ behaviour, like diversity of products and differentiation through quality and innovation. Some goals of competition policy are straightforward, with the aim of abolishing barriers to entry, preventing abuses of a dominant position, cartels and so on: these objectives are clearly at the core of the activity of competition authorities, and the tools used to achieve these objectives are well known: they consist mainly of pecuniary sanctions and injunctions to behave in compliance with some specified rules. However, competition policy also often involves other dimensions of economic activity and consumer welfare. Very often the strategic behaviour of firms not only involves competitive actions, but also has consequences for other aspects of their economic activity, such as employment or the environment. Indeed, some goals (eg favouring both the environment and competitive behaviour) may be potentially conflicting. A more straightforward objective of competition policy, on which most competition authorities now agree, is that of consumer surplus. Such an objective, for instance, avoids protecting competitors’ interests directly and focuses instead on the efficiency of the competitive process. Despite this consensus, however, some problems may remain. For instance, this objective...

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