The European control of abuse of dominance provides for the prohibition of exploitative abuse by companies. Exploitative abuse occurs, for example, when companies set excessive prices or make excessive profits.
However, the EU competition authority DG Competition has hardly used this tool to date – a major omission, as Aline Blankertz, Tech Economy Lead at Rebalance Now, explains together with Todd Davies, Justine Haekens and Nicholas Shaxson in an article on Promarket. Promarket is a highly regarded specialist online medium for the transatlantic development of competition policy.
Failed control of abuse of dominance
The article shows that the reluctance of the EU competition authority to control abuse can be explained by two factors:
- First of all, the widespread economic analysis in the form of “industrial organisation” dominates in the authority. It is neoclassically inspired and often declares market outcomes to be automatically efficient;
- In addition, there are no guidelines for dealing with exploitative abuse (in contrast to exclusionary abuse, for which such guidelines exist).
Perspectives and alternatives
At the same time, there are sensible starting points. In individual cases in the past, competition authorities have taken action against excessive prices, excessive profits and excessive market valuations. These have included the DG Competition. In these cases, however, methods other than industrial organization were used, in particular methods of financial-economic analysis. The authorities should use these more widely.
The complete article can be found here.
Photo by Austin Distel on Unsplash
