Abstract
The extent of economic analysis and evidence on which competition authorities and courts rely, in assessing whether specific conducts violate competition law, depends crucially on the legal standard adopted. In this article we examine the factors that influence the choice of legal standards, and hence determine the extent of economic analysis and evidence applied in competition law enforcement, focusing on the recent economic literature. We suggest a number of explanations on why the decisions of competition authorities in relation to the utilization of economic evidence may diverge from the social welfare-maximising decisions, stressing the role of substantive (or liability) standards adopted. Differences in substantive standards may be used to explain the significant divergence in the type of legal standards adopted in the EU and the USA. We also propose a practical methodology that can be used by competition authorities for identifying which legal standards minimise decision errors in the assessment of specific conduct.
Highlights
The extent to which economic analysis and evidence is relied upon by competition authorities (CAs) and courts, in assessing whether specific conducts violate competition law (CL), depends crucially on the adopted legal standards, i.e. on the decision rules that provide the basis for assessment of the conducts
In the literature we find references to: modified per se standards, where the application of the object rules requires the conducting of a analysis of market and firm characteristics before it can be determined whether the specific conduct belongs to a subclass of conducts for which there is a strong presumption of illegality; structured rule of reason19 where the conduct is assessed through a specific series of screens, to distinguish lawful from unlawful cases; in contrast to the full or open rule of reason where all potentially anti-competitive and pro-competitive effects of the specific conduct are assessed and compared
We have examined the factors influencing the choice of legal standards, and determining the extent of economic analysis and evidence applied in competition law enforcement, focusing on recent economic literature
Summary
The extent to which economic analysis and evidence is relied upon by competition authorities (CAs) and courts, in assessing whether specific conducts violate competition law (CL), depends crucially on the adopted legal standards, i.e. on the decision rules that provide the basis for assessment of the conducts. In the literature we find references to: modified per se (or modified object-based) standards, where the application of the object rules requires the conducting of a (contextual) analysis of market and firm characteristics before it can be determined whether the specific conduct belongs to a subclass of conducts for which there is a strong presumption of illegality; structured rule of reason where the conduct is assessed through a specific series of screens, to distinguish lawful from unlawful cases; in contrast to the (unstructured or) full or open rule of reason where all potentially anti-competitive and pro-competitive effects of the specific conduct are assessed and compared.. The term “quick look” is sometimes used as an alternative truncated effects standard, falling short of the “full” rule of reason—see Italianer (ibid., 2013) and Gavil (ibid., 2008)
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