Foundations and Limitations
Edited by Josef Drexl, Wolfgang Kerber and Rupprecht Podszun
Chapter 3: Consumer Welfare, Economic Freedom and the Moral Quality of Competition Law – Comments on Gregory Werden and Victor Vanberg
3. Consumer welfare, economic freedom and the moral quality of competition law – comments on Gregory Werden and Victor Vanberg Daniel Zimmer 1. WHICH CONSUMER’S WELFARE? Gregory Werden presents a broad analysis of the use of the notion ‘consumer welfare’ in economics as well as in legal practice. There is no point in restating it here, but I would like to underline the author’s conclusion that there is no international consensus about the meaning of the term ‘welfare’. Professor Werden points out that in US competition policy consumer welfare is practically the same as total welfare, whereas the competition policy in the EU is more oriented to benefit consumers at the end of the distribution chain. He also makes clear that ‘consumer welfare’ can come into play at different levels of competition policy: as an ultimate goal, but also as a mere test or guidance when applying competition law. He then gives some indications about the use of a ‘consumer welfare’ concept in the different areas of competition policy. According to the author, the goal of merger control laws should be understood to be promotion of social welfare generally. With respect to the implementation of this goal, Werden states: ‘Whatever test for legality is applied, it must be applied using the available analytic tools, and economics provides tools best suited to predicting likely short-term price effects from mergers’. If this is meant to say that merger control should mainly focus on short-term price effects, this raises a serious methodological question: lawyers...
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