(by Oles Andriychuk) In Pinar Akman’s post on the objective of competition policy as set out by the Court in GlaxoSmithKline (6 October 2009), she suggested the discussion in terms of ‘The Emperor is not Wearing Any Clothes’. I appreciate this metaphor, since to a large degree it indicates the situation with competition in present-day antitrust discourse. EU law has been preoccupied with the search for the appropriate benchmark of competition – so deeply that it has begin to forget the meaning of the word ‘competition’.
As in every other area of European policy, I would argue that competition should be analyzed in two consecutive steps: (i) isolated and (ii) contextualised. The first one requires conceptual separation of competition from other neighbouring policies, above all: a) consumer welfare; b) innovation; and c) industrial policy. Assuming that competition is taken seriously in Europe (otherwise what would be the point in listing it among the top EU constitutional values) the first step in any case requires an isolated examination of the phenomenon of competition without any crosschecking with these neighbouring values. This stage should be seen as the core of antitrust analysis. Competition scholars should be concerned most of all about the nature of competition (be it Hayek’s discovery process or entrepreneurial endeavour in the spirit of Adam Smith’s invisible hand). Antitrust politicians in their turn must strive to promote this set of values to the broader regulatory context.
This leads to the second step. Competition should be balanced with other societal values – such as consumer welfare, industrial growth, market integration, innovation and many others. For example, in some cases the interests of competition may conflict with the interests of consumer welfare. No one of these should be said to dominate another, but they have to be prioritised in each particular case. Nowadays however the discussion is developing rather in ‘either/or’ format, implying that the conduct is anticompetitive if it is anti-consumer and the other way around: if it is beneficial for consumers – it is procompetitive (e.g. in Leegin case in 2007 the U.S. Supreme Court held that ‘the rule [of reason] distinguishes between restraints with anticompetitive effect that are harmful to the consumer and those with procompetitive effect that are in the consumer’s best interest’).
So, I totally agree with Pinar Akman that the presence of any clothes on the Emperor’s body is quite doubtful. But we are talking about two different kingdoms (albeit allies, albeit with common heritage, albeit reigned by genetic twins): one is ‘Competition’; the other is ‘Consumer Welfare’. Although the ‘territorial dispute’ in GlaxoSmithKline does not bring satisfaction for either of them, it has promised better prospects for the former.
Title phrase taken from Eleanor Fox ‘The Battle for the Soul of Antitrust’, California Law Review, Vol. 75, No. 3 (May 1987) pp. 917-923