This paper is published in Gerard, Merola and Meyring, Bernd, (eds.) The Notion of Restriction of Competition: Revisiting the Foundations of Antitrust Enforcement in Europe. (Bruylant), and can be found here.
One who is not familiar with competition law would presume that the concept of restriction of competition must surely be well established, as otherwise how can one identify those practices that restrict competition? As anyone who is closer to the action knows , the concept is not really that well established in practice. This paper’s argument is that there is much greater consensus about the concept of restriction of competition in the EU that is usually acknowledged.
Instead of presenting a normative view of what a “restriction of competition” should be, this piece systematically reviews the incremental contributions that the EU courts have made to the definition of the notion of restriction of competition, and finds broad agreement around some fundamental questions. In order to do this, the paper is divided in two section: the first part focuses on the points of consensus, while the second part is devoted to some topics that are occasionally perceived to be controversial in the literature, but that appear to be less so upon closer scrutiny.
Regarding areas of consensus, it is undeniable that, under EU law, it is necessary to consider the nature of the practice and the context of which it is part in order to find a restriction of competition. Three main implications follow. First, the form of the practice, alone, is insufficient to establish a restriction of competition. Secondly, it is necessary to assess the counterfactual, that is, whether a given practice restricts competition that would have existed in its absence. Thirdly, a restriction in the freedom of action of one or more firms does not equate to a prima facie breach of EU competition rules.
Regarding areas where there is no consensus, the authors identify: (i) the border between object and effect restrictions; and (ii) how to analyse restrictive effects. For each of these issues, they argue that the case law is clearer than commentators usually assume. Going over each of these points in turn:
- a practice is deemed restrictive where it is presumed to have a net negative impact on competition. In principle, the ‘by object’ label is only deemed appropriate for practices that are not plausibly pro-competitive in the economic and legal context in which they occur.
- While insights about what it means to assess the restrictive effects of a practice are relatively scarce and disparate in judicial pronouncements, the case law indicates that: (i) effects are relevant if they are not purely hypothetical; (ii) that such effects must be likely if an effects-based assessment is to be conducted; and that (iii) the effects must be appreciable. There is also some high-level guidance as to what a restrictive effect on competition might be.
I think this is a really comprehensive paper and a solid effort in legal rationalisation. I think such efforts are inherently valuable, and this one is particularly detailed. On the other hand, I am not sure that the law is as coherent and clear as the authors would have us believe. I admire how the authors seek to rationalise the case law, but I’m still left with doubts about how to apply the legal standards they identify to situations other than already decided cases. I think this is not due to the authors – instead, I think it is a consequence of a lack of coherence and clarity in the case law of the European courts, something which is just taken for granted (and, in my view, justly criticised) in US scholarship.