The consumer welfare and the competitive process

• Department of Law

The Competition Law Working Group hosts a session with Francesco Ducci (Western Law).

Abstract:

Should antitrust promote economic welfare or protect the competitive process itself? Defenders of the ‘consumer welfare standard’ contend that the law should maximise a welfare outcome, while critics suggest that antitrust policy should instead focus on the preservation of the competitive process. This paper argues that both answers share an underlying conceptual fallacy: conflating normative goals with decision rules for anticompetitive conduct and liability. First, the paper shows that a consumer welfare goal does not automatically translate into a legal test based on consumer surplus. Rather, an element of process is already embedded in antitrust liability under the consumer welfare standard. Second, the paper argues that approaches seeking to adopt a competitive process goal offer a normatively indeterminate alternative. Emphasis on process, however, has a valuable role in redirecting antitrust debates toward reassessing the optimal balance between Type I and Type II errors. From an error-costs perspective, the problem of the consumer welfare standard may not be a lack of concern for process, but the very notion of competitive process that it already embeds.

The draft paper will be distributed upon registration.

The Competition Law Working Group is a forum where EUI members, external researchers, and practitioners working on antitrust law and economics discuss their work and interact with other scholars. All interested fellows, PhD researchers, professors and visiting academics are invited to participate.