Part Two: The Role of Economics and Economists in Antitrust Law

Abstract

On the eve of the expansion of the European Union to no fewer than twenty-five countries comprising more than 380 million consumers, it is inevitably the case that more and more American corporations will find the way they do business to be influenced by the European Union’s competition law regime. It is, therefore, increasingly important for United States corporations and their legal counsel to understand not only the key differences in the U.S. antitrust and E.U. competition enforcement regimes, but why those differences exist and how they matter to a corporation’s day-to-day business conduct. As Judge Wood notes, both the U.S. and the E.U. systems are based on principles that free markets and full-throated competition will produce the best mixture of goods and services in the most efficient way. Within this broad umbrella of philosophical agreement, however, important differences exist. This Article explores recent developments in three such areas: (i) the treatment of single-firm conduct; (ii) regulation of “gray market” or parallel imports by the European Union, and (iii) analysis of the risk of coordinated effects in merger reviews. This analysis reveals that, while areas of convergence in substantive analysis do exist, the type of economic analysis that is characteristic of recent U.S. antitrust developments has been constrained in the European Union by two unique political imperatives: the objective of integrating diverse national markets into a “single market,” while in the process protecting small- and medium-sized enterprises. As alluded to in Judge Wood’s remarks, both of these objectives are steeped in history and thus likely to remain significant factors forming the development of E.U. competition law.