Edited by Lorenzo Federico Pace
Chapter 2: Guidance on the Commission’s Enforcement Priorities in Applying Article 82 to Abusive Exclusionary Conduct by Dominant Undertakings: From Protecting Freedom to Enter a Market to an Efficient Allocation of Resources to Increase Consumer Welfare
Valentine Korah INTRODUCTION 1 Two basic models of the function of competition law have influenced the thinking of the Commission of the European Community (EC). The first is the Ordoliberal view of freedom, adopted in reaction to Nazi tyranny and the power of the cartels: freedom from state power and from powerful firms. In this view, it is impossible to tell whether the outcome of conduct by a dominant firm (Domco) would be efficient. Whether a particular price is efficient depends on the preferences of consumers, usually unknown until after the price is fixed. This can be determined only by competition free from restraints.1 The Ordoliberals accepted the view that one of the functions of competition is to produce an efficient allocation of resources for the benefit of consumers. In contrast to many economists today and recent statements from the Commission, however, the Ordoliberals did not accept that ‘good outcomes’ were the sole purpose of competition law. They were concerned also about the accumulation of political See Friedrich August von Hayek, ‘Competition as a Discovery Procedure’, in Chiaki Nishiyama and Kurt R. Leube (eds), The Essence of Hayek (Hoover Institution Press, Stanford, CA, 1984), Chapter 13. 8 1 M2541 - PACE PRINT.indd 8 04/03/2011 13:16 Guidance on Commission’s Enforcement Priorities in applying Article 82 9 power by the state and private firms, which they feared would result from inadequate competition. The second model focuses on the probable effects on the market as the sole criterion of competition. This is...
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