Volume 30 (2007)

Volume 30 (2007) / Issue 3

Ralf Boscheck, 'Competitive Advantage and the Regulation of Dominant Firms' (2007) 30 World Competition, Issue 3, pp. 463–477

Abstract

Although US and EU competition law offers a well established framework for regulating commercial conduct, its main focus—the behaviour of dominant companies—is still unsettled. Legislators and regulators are asked to distinguish and, for the purpose of rule making, pre-judge which types of conduct are likely to lead, or have led, to superior offers as opposed to the building up and abuse of market power. In reality, they often end up mixing assessments of conduct with beliefs in the intrinsic ability of markets to adjust to the prevailing circumstances. The EU’s review of the application of Article 82 to exclusionary conduct intends to move beyond such arguments as to form and belief. Intended to provide an effect-based economic approach to dominant firm regulation, the Commission’s discussion paper largely replaces formal characterisation of conduct with, instead, principles and methods for assessing the ability of businesses to foreclose markets and lock out equally efficient competitors. In the process, the Commission avoids prejudging actual behaviour and, by allowing for an efficiency-defence, in actual fact shifts the burden of proof to the dominant firm. Yet even if this could be made compatible with prior regulation, to be useful in regulatory practice and judicial review, the standards for assessing dominance and exclusionary conduct would need to be clarified and data requirements reduced.

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ISSN: 1011-4548
ID: WOCO2007029