- Elgar original reference
Edited by Ariel Ezrachi
Chapter 22: The consumer and competition policy: welfare, interest and engagement
Competition agencies are employed to enhance consumer welfare or to make markets work better for consumers. Consumers’ organisations are there to empower consumers to operate more effectively in their everyday and, perhaps more importantly, less frequent market transactions. They have a mutual interest in each other’s work and in helping each other promote their own agendas. Such a ‘pro-consumer’ assessment of the interaction of consumer welfare, interest and engagement would have been a mainstream view during much of the 1990s and early 2000s. Indeed it is still a dominant theme for many agencies. However, the certainty with which the mantra has been chanted has lessened of late. The wider economic crisis triggered by the financial crisis of the late 2000s has led most areas of economic and regulatory policy into a period of reflection. In competition circles the most immediate pressure was faced by the European Commission, which had to consider the national bail-out packages for some financial institutions in Europe within the scope of its State Aid provisions. Pressure has also come on two perhaps more traditional fronts. First, the wider economic crisis has led to pressure for more of a focus on a total welfare model rather than a consumer welfare model; secondly, pressure has grown for a return to a modified version of the public interest, rather than relying on a consumer welfare test. For those whose only experience of the competition world is recent this must have come as a terrible shock.
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