Competition Law as a Form of Social Regulation

Abstract

For a long time considered a fringe topic, of interest for developing and emergent economies, the question of inequality and poverty has recently taken center stage in mainstream competition law scholarship in the developed countries. Some of this literature deplores the current state of competition law, which has largely ignored this issue, and argues for a different paradigm that would actively engage with economic inequality and its causes. Taking a social contract perspective, and noting the hybrid nature of competition law, which is a tool of economic order, but also a form of social regulation, this study explores the main difficulty in enriching competition law with equity concerns: the economic foundations of mainstream competition law in welfare economics and the crucial separation of the economic efficiency dimension from that of distributive justice. It then examines alternative traditions in economic thought, which are more compatible with an egalitarian perspective. It then turns to the institutional question, exploring the various instruments that governments dispose in order to equalize, and the respective role of more conventional tools against inequality, such as taxation, concluding that the institutional argument against equity concerns in competition law does not stand serious scrutiny. It also critically engages with the argument that there is a trade-off between equality and efficiency, and again concludes that this argument does not stand serious scrutiny. The final part revisits the thorny question of what is to be equalized. Drawing on the idea of “complex equality,” it presents the contours of a fairness-driven competition law.