Chillin'Competition

I look forward to seeing many of you next Thursday in Brussels for the launch of The New EU Competition Law. The other half of Chillin’Competition, as well as other good friends of the blog, will be there. It promises to be fun.

The first post on the book addressed the institutional transformation that the EU competition law underwent with the adoption of Regulation 1/2003. Today’s entry focuses instead on the intellectual shifts that the discipline has experienced over the past 20 years, which I address in Chapter 2 of the book (‘The rise and decline of the “more economics-based approach”‘).

The ‘more economics-based approach’ was all the rage in the early 2000s. The modernisation of Articles 101 and 102 TFEU, which was the big buzzword at the time, referred both to the substantive and the institutional changes to the application of the two provisions.

In those days, it felt as if economic analysis was taking EU competition law to its own ‘end of history’. Articles 101 and 102 TFEU (in addition to merger control), it seemed, were changing for good. This is the context in which Christian Ahlborn and Jorge Padilla coined the term ‘Brussels consensus’ (see here for their original contribution) and captured the zeitgeist.

It does not feel this way anymore. If anything, the impression is that there a new consensus is forming around different ideas. Economic analysis is not absent from this emerging consensus: its role, however, is different.

What happened over the past decade? Why are the ideas driving the rise of the ‘more economics-based approach’ seemingly falling out of favour?

Chapter 2 explains that the key might lie with perceptions about what makes competition law enforcement legitimate.

The ‘more economics-based approach’ was, I argue, a rational response by the European Commission to a legitimacy crisis in the system. The authority understood that enforcement would not be accepted as legitimate if not informed by economic analysis.

Under the ‘Brussels consensus’ what matters, above all, is input and process. What matters, in other words, is that competition authorities rely on the best available expertise and that the assessment asks the right substantive questions. The outcome (that is, whether an infringement is established or not) is something about which the system is agnostic.

Things have changed over the past decade (I draw evidence in this sense, inter alia, from some of the leading conferences organised in Brussels).

With the rise of Big Tech, and under the influence of old and new ideas, what is expected from the competition law system is that it delivers. Enforcement is deemed legitimate, in other words, if it is able to enact change.

Many stakeholders are no longer satisfied with asking the right questions and pondering whether intervention is warranted in the specific circumstances of the case. The expectation is that authorities deliver the palpable, timely restructuring of digital and other markets.

Outcomes (as opposed to input and process) are now the driving force under the emerging consensus. A number of important consequences follow. One of them is that the relationship with economic analysis changes. Formal economics does not act as a constraint on enforcement (or not in the same way it did under the ‘Brussels consensus’).

A second one is that, if the existing tools do not deliver the desired outcomes (or do not do so in a timely and/or effective manner), then new tools are introduced. This is the background against which we must make sense of the adoption of the Digital Markets Act.

A third one is that the priorities change. A key tenet of the ‘Brussels consensus’ was scepticism vis-a-vis distributional issues, in particular in the context of Article 102 TFEU. The discipline would focus on exclusion, leaving the allocation of rents to other fields of law.

Not anymore: redistribution is front and centre of the new EU competition law, with all the fascinating substantive and institutional consequences that follow.

We will be discussing all the above, and much more, next week in Brussels. À bientôt, and all the best for 2024!