Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

The Case for some Formalism in Rules of Competition Law

with 6 comments

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Our economist friends often believe that legal formalism is useless.

I have personally complained about the bad influence that formalistic lawyers had in competition proceedings.

Now, “assume” an economist had written the Treaty rules on Competition. This would give something like:

  • Article 101 TFEU: Anticompetitive coordination is unlawful.
  • Article 102 TFEU: Anticompetitive foreclosure is unlawful.

With such loose rules, the economic cost of enforcing the law would skyrocket. And so would the economic cost of complying with the law.

The sole saving achieved would be the ink saved in printing and reprinting the Treaty.

Or why too little legal formalism is economically inefficient.

Written by Nicolas Petit

30 September 2013 at 4:08 pm

Posted in Uncategorized

6 Responses

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  1. ¡Yes, yes, a thousand times yes! This is what I – lawyer/economist hybrid – keep telling my economist colleagues. But do they ever listen?

    Martin Holterman

    1 October 2013 at 1:07 am

  2. Yes, yes, yes! The tide is turning at last…it is high time for a more legalistic approach: if there is no role for “transport experts” to argue in cases of speeding that (i) the 50 km/h speed limit in citiies is inefficient and (ii) there was no actual harm caused by the high speed applied then why do we let economic experts do the same in competition cases???:)))

    Asimo

    1 October 2013 at 1:41 pm

  3. Which is where the wonderful block exemption regulations come in! Now, if only there could be BERs under Article 102…

    geof

    1 October 2013 at 2:32 pm

  4. Let me play the usual nagging economist. Note that if the costs of enforcing the law were to skyrocket, then the costs of compliance would disappear altogether; prohibitively costly enforcement would make for no compliance at all!

    Cedric Argenton

    2 October 2013 at 12:47 am

  5. You are adverting to the rules / standards debate, which is an ancient topic in legal scholarship. Perhaps citing some law and economics would help persuade your economist friends that rules are sometimes desirable: see Ehrlich & Posner, An Economic Analysis of Legal Rulemaking, 3 J. Legal Stud. 257 (1974). I am a bit surprised that competition law economists should have difficulty with this topic, as the per se rule / rule of reason approach in US antitrust law is a classic instantiation of the debate. Whether or not a particular per se rule is desirable, it seems intuitive that the advantages are predictability and administrability.

    Norman S

    2 October 2013 at 1:40 pm

  6. Putting off our continental background: a few precedents would substantiate what each of the terms of the proposed 101 & 102 mean – just as “undertaking”, “object” etc. are still being clarified on a case by case basis. Economic costs would not skyrocket. At most, the role of the judiciary would slightly have increased at the expense of the legislature.

    stefan

    2 October 2013 at 5:42 pm


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