The history of competition policy can be read as the quest for a working definition of competition as a prerequisite for the definition of restraints of competition which competition laws should prohibit in order to protect competition – Professor Peter Behrens.
Professor Peter Behrens has recently released a paper entitled “The ordoliberal concept of “abuse” of a dominant position and its impact on Article 102 TFEU.”
In this article, Professor Behrens undertakes first to show that the Ordoliberal School was not homogeneous and that, although it stayed faithful to its core tenets, it evolved considerably over time.
He also tries to refute Professor Pinar Akman’s thesis according to which the drafting of Article 102 TFEU––which prohibits the “abuse” of a dominant position––was not influenced by the Ordoliberal School.
Professor Behrens then proceeds to explain and promote “consumer choice” (or “economic freedom”) as the Ordoliberal concept of “abuse.”
I will not comment on the part of the article which deals with historical debates (the content of the Ordoliberal paradigm and the influence of this school over the drafting of article 102 TFEU), because I am not familiar enough with the primary sources.
I will focus instead on discussing the appropriateness of the concept of “consumer choice” as the criterion defining a restraint of competition.
My point will be to show that this concept is too irrational to be considered as a real definition (1.) and that, consequently, Ordoliberalism fails to deliver on its promises (2.).
1. Can the Reduction of “Consumer Choice” Rationally Be Used to Define the Concept of Abuse under Article 102 TFEU?
According to Professor Behrens,
“Abuse” is a rather vague term which lends itself easily to controversies about its meaning. It should therefore not come as a surprise that even within the specific context of EU competition law it has been interpreted from the very beginning in very different ways.
It would be hard to deny this statement. However, the author considers that the Ordoliberal School has elaborated a rational and objective definition of “abuse”: the restriction of “consumer choice.” Thus, Professor Behrens writes that
From an ordoliberal point of view, it is the role of competition law […] to protect competition as a system within which individuals are free to make their choices on the market. In order for consumers to be able to make choices, it is indispensable that there exists a sufficient variety of competing products and producers (suppliers). This brings us to the relevance of the « market structure » which reflects the number of producers (suppliers) and their market shares. […] It follows that a restraint of competition is characterized by a limitation of consumers’ choice which depends on the rivalry among a sufficient number of producers. Hence, from an ordoliberal point of view, a restraint of competition may be found wherever (1) the number of freely competing producers is artificially reduced in ways that do not result from the normal process of competition itself, and (2) where this reduces the scope of alternatives among which consumers may freely chose.
Professor Behrens thinks that this paradigm endorses Adam Smith’s legacy. As he puts it,
By emphasizing individual economic freedom as the source of competition, ordoliberals followed and still continue to follow the liberal tradition which in its classical form was established by Adam Smith.
Indeed, the author affirms that the Ordoliberal paradigm rests on the institution of private property and aims at buttressing the rule of law. He writes
Especially Franz Böhm (the lawyer) emphasized that competition is not merely rooted in individual economic freedom, but in individuals’ use of their property rights guaranteed by a system of private law, rights which are limited, however, by rules which would determine the borderline between (lawful) competitive and (unlawful) anti-competitive market conduct. Ordoliberals therefore insist that competitive markets must be based on the rule of law, more specifically on competition rules which the state must enforce by administrative and adjudicative means.
The author states, however, that the Ordoliberal School departs from the classical school of liberalism on one important point: it does not share this latter’s “optimism” as to the ability of the market to escape self-destruction without the help of the state.
After noting that Ordoliberalism, which grants consumers the right to decide how producers must use their property, differs radically from classical liberalism (1.1.), I will show that the Ordoliberal case for a “consumer choice” paradigm is grounded on a confusion resulting from a polysemy (1.2.), that the move from the choice of products to the choice of producers is not justified (1.3.), and that Professor Behrens actually does not really rely on “consumer choice” to draw the line between legitimate and illegitimate behaviors (1.4.). I will finish this first part by making some miscellaneous comments on “consumer choice” (1.5.).
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