Economic Theory and Competition Law
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Economic Theory and Competition Law

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.
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Chapter 1: Economic Analysis in EU Competition Cases

Hans W. Friederiszick


Hans W Friederiszick* 1 INTRODUCTION Economic analysis has become an integral part of EU competition policy. Competition policy focuses on the negative effects of a measure on competition and trade and balances these with potential positive effects. In this way, counterfactual analysis, market definition and an effects-based analysis in certain cases are the unifying themes of modern economic analysis as it is applied to competition policy. Economic analysis can play an important role in three different fields: improving existing rules, analysing individual cases and ex-post analysis of the effectiveness of the intervention. This chapter provides an overview of how and when economic analysis can be applied in those areas, based on some current examples. It discusses the limits and the benefits of a more effects-based approach. 2 ECONOMIC ANALYSIS IN EU COMPETITION POLICY Economic analysis was marginal to EU competition policy until the late 1980s. Since then, the importance of economic analysis has increased significantly. The main feature of this extended reliance on economics is a reassessment of decision making in the light of economic principles – with respect to both better rules and an effects-based, case-specific analysis in some cases. * The author is a member of the faculty of the European School of Management and Technology (ESMT), and Managing Director of ESMT Competition Analysis. From 2003 to 2006 he was a member of the team of the Chief Economist at the Directorate General for Competition (DG COMP), European Commission....

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