Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Friday, May 9, 2008

Consumer Welfare, Standard of Proof and the Objectives of Competition Policy

Posted by D. Daniel Sokol

Italian practitioners Vito Auricchio and Alberto Pera (the latter is the former Secretary General of the Italian Competition Authority) of Gianni, Origoni, Grippo & Partners have written an article on Consumer Welfare, Standard of Proof and the Objectives of Competition Policy.

ABSTRACT: In this paper we take for granted that there is no real difference in the stated objectives of EU and US competition policy. In fact, as we discuss, the Europeans have made great efforts towards adopting evaluation criteria based on efficiency considerations. However, we look at how the objectives are implemented and argue that there emerges a problem of standard of proof and of how the analysis of the effects of a certain practice on consumers should be conducted. On this, American and European standards are probably still apart. We proceed as follows: first, we briefly review the consumer welfare criterion and we show that its adoption has led to a wider use of the "Rule of Reason" based on economic analysis. We then highlight the issues represented by the standard of proof. Hence we review the application of the standard of proof in Europe and the US: we find a great deal of convergence, but we also find differences especially with regard to the unilateral behavior of a "dominant" company. We then discuss the treatment of unilateral behaviour in the US and in Europe in light of the recent decision of the Supreme Court in the Verizon case. We conclude suggesting that Europe has gone a long way towards a consumer welfare-based standard. However, the process has taken place at different speeds in different areas of the law, so that the European approach to unilateral behaviour may resent from the idea that dominant firms have a "special responsibility" towards their competitors.

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