Tuesday, January 12, 2010
Public vs. Private Enforcement of Antitrust Law in Unilateral Conduct Cases - The Interaction between the Economic Review of the Prohibition of Abuses of Dominant Positions and Private Enforcement
Posted by D. Daniel Sokol
Mark-Oliver Mackenrodt, Max Planck Institute for Intellectual Property, Competition & Tax Law explains Public vs. Private Enforcement of Antitrust Law in Unilateral Conduct Cases - The Interaction between the Economic Review of the Prohibition of Abuses of Dominant Positions and Private Enforcement.
ABSTRACT: The present paper analyzes the interaction between the economic review of the probition of abuses of a dominant position (Article 82 EC) on the one hand and the efforts to enhance private enforcement of competition law through private damage claims on the other hand.
The paper argues that effective enforcement requires that exactly those cases should be selected for decision which cause the type of negative welfare effects that Article 82 EC seeks to prevent. The author finds that public enforcers seek to repress unilateral business strategies causing harm to competition as protected by Article 82 EC. Private plaintiffs, by contrast, are motivated by the prospect of gaining damage awards which depends on their individual harm. The paper distinguishes several groups of private plaintiffs. For each, it is asked whether there is a correlation between individual harm and harm to competition. As it turns out, there is a divergence in the incentives of public enforcers as compared to certain potential private enforcers. In cases where there is harm to competition but no or only little individual harm there is concern for an under-deterrence through private enforcement. On the other hand, there are cases where private parties have an incentive to go to court even though there is no or little harm to competition. This might result in an over-deterrence. The paper concludes by discussing the consequences for reaching an optimum level of enforcement and the influence of a more economic understanding of Article 82 EC.