Competition Policy: Toward A New Approach

"Recently many economists have pointed out the necessity of a closer focus on consumer welfare in the implementation of competition policy with specific reference to abuses of dominance. While antitrust legislation was written with this objective in mind, its concrete application has often been biased against market leaders and in defence of their competitors rather than toward the defence of competition and of the interests of consumers. The two objectives do not necessarily overlap. The development of the New Economy, characterised by very dynamic and innovative markets, has increased the pressure for a new approach, already somewhat developed in the US but just in progress in the EU. In July 2005 a EU Report by a group of important economists, Rey et al, argued in favour of an effects-based approach to competition policy which associates abuses of dominant positions with anti-competitive strategies that harm consumers. The proposal is an interesting starting point to build a new approach to antitrust."