UCL Centre for Law, Economics and Society

In this seminar, two short presentations will focus on how economists of various schools envisage their contribution to competition law and the role of economic schools in rationalizing competition law discourse. Participants will be invited to discuss how these conceptions fit with lawyers’ notion of the usefulness of economics in this field of law.

Economists know what competition law is about: different “schools” of economic thought may advance different stories (ordoliberals, Harvard economists, Chicago, post-Chicago, Austrians, behavioral law and economics…). Is the contribution of economics to the understanding of competition law really about goals? Or is a consensus about goals a preliminary step for the real imput of economists, which consists in designing legal tests and suggesting presumptions? Or is it yet something else economists have to offer?

Obviously, many of us think that it is indeed useful, but there are nevertheless different ideas about exactly how useful economics might be as a source of competition law and, more generally, of antitrust discourse. Should competition law transplant economic concepts as such and should their use always be compatible to “sound economics”? What is the role of economic “schools” in rationalising competition law discourse?

Professor Sibony and students

Speakers:

Professor Herbert Hovenkamp
Ben and Dorothy Willie Chair, College of Law, University of Iowa

About this talk: 

• Paper by Prof Hovenkamp
  
• Comments by Dr Fletcher

The debate over the objectives of competition law statutes has recently intensified. There are many reasons for this:

First, competition law has expanded globally to different forms of economies and societal bases, thus leading to different conceptions over its scope and aims.

Second, the expansion of competition law has led to tensions between different legal regimes regulating the conduct of corporations in global markets.

Thirdly, more and more State activities are now infused with a form of competition culture: competition law is applied to previously exempted economic activities and even to some State activities, competition advocacy has also developed. Equity considerations are explicitly integrated as objectives of several competition legislations around the world, and more specifically EU competition law in the area of state aids control, alongside efficiency (total welfare). Some could also envision the standard of consumer welfare as a distributive justice standard, in the sense that it focuses on wealth transfers from consumers to antitrust law infringers. This raises questions over the deep meaning of competition law and its interaction with other public policies, including policies aiming at wealth redistribution.

Fourthly, economic analysis and evidence has become an essential ingredient of competition law discourse. Economic rhetoric emphasises efficiency considerations, but does not suppress the need for distributive choices. The recent work of the Stiglitz, Sen and Fitoussi Commission on the measurement of economic performance and social progress and the OECD happiness index illustrate this trend. Recent work has also highlighted the importance of equality concerns and distributive justice in public policy more generally (e.g. "The Spirit level"). More generally, there are fundamental questions raised by the application within the legal system of the principles of welfare economics, in view of the Stiglitz-Atkinson theorem and more generally the consideration of distributive justice by welfare economics.

The concept of distributive justice also has considerably evolved over time. To be sure, its content is not the same as in the 1930s'. Finally, the recent emphasis of competition law worldwide on fostering consumer interest requires difficult choices from policy makers, competition authorities and the courts. They must set priorities over the long v. short term consumer interest (thus including intertemporal trade offs), trade off the interest of some classes of consumers versus others, adopt - explicitly or implicitly - a specific conception of the consumer (marginal versus infra-marginal, neoclassical versus behavioural...).

The objective of this workshop will be to reflect on these fundamental issues in competition law and policy by inviting contributions from competition lawyers, economists, historians of economic thought, philosophers and sociologists.