For a Rigorous 'Effects Based' Analysis of Vertical Restraints Adopted by Dominant Firms: An Analysis of the EU and Brazilian Competition Laws: Comment

Posted by D. Daniel Sokol

Seth B. Sacher, Federal Trade Commission has written For a Rigorous 'Effects Based' Analysis of Vertical Restraints Adopted by Dominant Firms: An Analysis of the EU and Brazilian Competition Laws: Comment.

ABSTRACT: In a recent working paper, Damien Geradin & Caio Marioda Silva Pereira Neto argue that the Brazilian competition system would greatly benefit from the adoption of guidelines like the European Commission Guidance Paper, which offers a legal and economic methodology to implement an “effects-based approach” to vertical restraints adopted by a dominant firm. This paper notes that while their proposed effects based analysis is far superior to per se treatment of vertical restraints, this framework can be further improved by careful attention to the challenges raised by the so-called “Chicago School” regarding the impact of vertical restraints. Further, whether it would be advisable for Brazil to write formal guidances regarding its policy toward vertical restraints should be evaluated in light of both the nature of Brazilian competition laws and the flexibility of the Brazilian economy.