The role of economics and the type of legal standards in antitrust enforcement by DGCOMP: An empirical investigation

Abstract

We empirically investigate, for the first time to the best of our knowledge, the role of economics in antitrust enforcement by EC s Competition Authority (DGCOMP), by constructing and measuring indicators capturing the extent and type of economics used in reaching infringement decisions between 1992 and 2016. This allows us to identify the legal standards (LSs) adopted in assessing different conducts and their evolution and compare these to their theoretically optimal level, thus capturing the quality of enforcement. On average, economic analysis plays a modest role in investigations, with little analysis to substantiate consumer harm or to account for efficiencies, for conducts for which effects-based would be the appropriate LS. However, there is a consistent and significant improvement over time in the quality of enforcement in abuse of dominance cases, with effects-based LSs adopted in recent years. This contrasts to earlier findings and questions recent views, by indicating that DGCOMP has been influenced by the significant progress that economic analysis of antitrust has made in recent decades. Results on how LSs adopted affect the outcome of the judicial review (the rate of decision annulment) do not support the hypothesis that this increases as LSs move closer to effects-based.