Foundations and Limitations
Edited by Josef Drexl, Wolfgang Kerber and Rupprecht Podszun
Chapter 1: Consumer Welfare and Competition Policy
Gregory J. Werden* The discourse on competition policy often uses the term ‘consumer welfare’ but rarely is clear about its meaning or role. Commissioner Neelie Kroes (2005) once declared without elaboration: ‘Consumer welfare is now well established as the standard the Commission applies when assessing mergers and infringements of the Treaty rules on cartels and monopolies.’ The European Commission’s (2008) press release announcing the Article 102 TFEU (then Article 82 EC) guidance paper was headed ‘Antitrust: consumer welfare at heart of Commission fight against abuses by dominant undertakings’. The exposition of that statement in the paper itself (European Commission 2009: para. 19), however, consisted of little more than the following: The aim of the Commission’s enforcement activity in relation to exclusionary conduct is to ensure that dominant undertakings do not impair effective competition by foreclosing their rivals in an anticompetitive way and thus having an adverse impact on consumer welfare, whether in the form of higher price levels than would have otherwise prevailed or in some other form such as limiting quality or reducing consumer choice. I address the meaning and role of ‘consumer welfare’ in three discrete essays. The first reviews key economic concepts and the usage of the term ‘consumer welfare’, then outlines distinct ways in which ‘consumer welfare’ considerations could be relevant in competition law. The second essay examines the meaning and role of ‘consumer welfare’ in merger control. It concludes that the welfare of all consumers should be considered, but short-term price effects in the relevant...
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