Tuesday, August 27, 2013
Continental Drift in the Treatment of Dominant Firms: Article 102 TFEU in Contrast to § 2 Sherman Act
Posted by D. Daniel Sokol
Pierre Larouche, Tilburg Law and Economics Center (TILEC); College of Europe - Bruges; Tilburg University - Tilburg Law School; Center on Regulation in Europe (CERRE) and Maarten Pieter Schinkel, University of Amsterdam - Amsterdam Center for Law & Economics (ACLE); Tinbergen Institute - Tinbergen Institute Amsterdam (TIA) describe Continental Drift in the Treatment of Dominant Firms: Article 102 TFEU in Contrast to § 2 Sherman Act.ABSTRACT: In this paper we compare the concepts of monopolization and abuse of dominance as in §2 of the Sherman Act and Article 102 of the TFEU, respectively. After identifying a number of distinctive features in wording and interpretation – including the special responsibility of the dominant firm, competition of the merits and protection of the competitive process – we discuss three lines of argument to explain these differences. The first builds on ordo-liberalism, with its concern for the absence of market power and for the resilience of competitive markets, which influenced EU competition law from the very beginning. The second line of argument derives from the observation that public competition law enforcement is fallible, which self-enforcement could remedy. The third argument explains some of these differences via innovation, whereby Article 102 would reflect a European perspective on innovation. We subsequently return to the underutilized EU category of exploitative abuses and argue that economic techniques developed in the context of damages litigation could open it up for future enforcement in a way that would be in line with ordo-liberal principles, properly understood.