This is an article-length review of The Atlantic Divide in Antitrust: An Examination of US and EU Competition Policy by Daniel J. Gifford and Robert T. Kudrle, a book on the differences between EU and American antitrust. It was published in the Michigan Law Review, and can be found at https://repository.law.umich.edu/mlr/vol115/iss6/10/.

The review is interesting because: (I) it provides an overview of the book and its arguments, which is quite useful; (II) it describes how the different goals of antitrust and institutional framework on both sides of the pond lead to different enforcement priorities and allocation of powers to enforcement agencies; (iii) it assesses in some detail how single firm conduct is differently pursued on both sides of the Atlantic; and (iv) it compares different enforcement practices regarding cartels in Europe and the US.

The main argument of both the book and the article is that: “With its steadfast economic focus, antitrust in the United States has a clear goal. In Europe, however, the goals remain muddled as the continent attempts to modernize the jurisprudence to a more effects-based economic approach. Two major factors contributing to this posture are, first, the vestiges of non-economic goals in the case law and, second, a European Commission that may use such case law to aggressively bring actions that it might otherwise not pursue given less deferential courts in conduct cases than in merger cases. This divergence between the United States and Europe is particularly pronounced with regard to single-firm conduct, and in technology markets in particular.

If this was the whole argument, I would have nothing to object. Yet, that is not the whole argument, and I disagree with parts of it. To this European competition lawyer, it seems true that the evolution in the US since the 1970s has arguably made US antitrust law more stringent and coherent than EU competition law. Nonetheless, if one acknowledges that the EU pursues different antitrust goals than the ones pursued in the USA – and that this is to a great extent a result of cultural differences and institutional constraints –, the article’s attitude begs the question of why one should presume that Europe would be wise to fully follow the US down the path it chose  (a path which, I’d like to point out, leads to a destination that is not half as clear as is usually depicted, as the unending discussions about the meaning of “total welfare” and “consumer welfare” in US antitrust literature should make clear). More importantly, the article presumes that the issue of antitrust goals is technical, ignoring that this issue is very much political (something which the author has been ready to acknowledge and consider normal about the evolution of US antitrust and its goals in other articles).

A second reservation I have is that the article’s ultimate normative position seems to be that the prohibition of any conduct which may possibly result in chilling pro-competitive behaviour should not be implemented. While – I tend to agree with softer versions of this argument, such a position does not necessarily hold if there are other goals at play other than maximising efficiency and total welfare as is the case in Europe. Further, it is argued that a rule of reason is preferable because it allows one to identify practices which are anticompetitive. However, there are serious “chilling effects” and administrative costs to implementing a rule of reason approach to all practices unless the courts and the agencies adopt a truly hands-off approach under which only very few practices are found to be anticompetitive (which, since judicial review is as deferential as it is in most of Europe, and since administrative incentives bend towards visible and successful prosecutions, is a peculiar thing to presume about the evolution of the European system). Lastly, there may be a point at which favouring non-intervention in doubtful cases is no longer socially optimal – and we do not know where that point may be, or have much empirical support for choosing such a point. For example, criticising interventions in the digital economy for lacking a proper basis is a valid criticism; but such a position can be criticised in turn for ignoring that such interventions may be necessary for authorities to learn about the markets, that they minimise the risks of false negatives, that the “chilling effect” of such interventions is empirically unverified, and that such (punctual) interventions have the ultimate potential of ultimately improving overall welfare even if they are detrimental to the investigated firms.

As should be obvious from the detailed comments above, I found the piece thought-provoking and a clear (if fairly one-sided) primer on the main differences between the US and the EU. As most pieces from Sokol, it is recommended reading.

 

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