Exclusionary Abuses of Dominant Undertakings and the More Economic Approach
Since the late 1990’s the European Commission has pursued an ambitious reform agenda which has resulted in wide-ranging changes in European competition policy. A central axis of this reform is the so-called “more economic approach” to competition law. This approach has found expression, for example, in the newly drafted Merger Control Regulation 139/2004 and the Guidelines on the Assessment of Horizontal Mergers. In December 2005 the Commission published a Discussion Paper setting forth a modernised economic approach which proposes the application of Art. 82 for controlling abuse by market dominant firms. The Discussion Paper concentrates on exclusionary abuses – of great practical importance however subject to considerable doctrinal debate – and may in the future eventually be transformed into guidelines.The consideration of economic theory in the design and application of EU competition regulations is in no regard new. Enforcement of EU competition regulations – as also with the German Act against Restraints on Competition (GWB) – has long since drawn upon economic teachings in order to make appropriate and fitting decisions. Therein, economic insight proved especially useful for reaching a thorough understanding of the facts. However, thus far the foremost concern has been to protect the economic freedom of market actors and a competitive market structure. The Commission advocates a shift in competition policy. Henceforward, agencies and courts should judge competition cases with regard to principles of economic efficiency in the adjudication of individual cases.
This reorientation poses a number of problems. One must first ask just what aim a law prohibiting competition restraints has. Does the law only serve to ensure economic efficiency? Or is it intended to protect the freedom of market participants within the arena of competition and the common market? Also needing clarification is which economic teachings can be deemed so developed and sound as to allow their translation into the law. Finally, the question arises whether regard for economic considerations in individual cases even makes economic sense. The ascertainment of relevant economic data is routinely linked with great efforts and costs, and the laboriously obtained knowledge will often not prove sufficient for the drawing of precise conclusions over market results. Therefore it seems more logical to take account of economic principles and develop general rules with which agencies and courts can resolve competition law cases. Hence, in addition to fundamentally examining the economic approach to abuse controls, this work, applying both a comparative law and law and economics perspective, develops such rules for judging market power and selected exclusionary abuses.