The Oligopoly Problem in EU Competition Law

Nicolas Petit

University of Liege

February 5, 2012

Research Handbook in European Competition Law, I. Liannos and D. Geradin eds., Edward Elgar, September 2013

This paper offers a complete overview of the oligopoly problem in competition law and economics, with a specific focus on European Union (EU) law. A related purpose of the paper is to challenge the dominant view that merger control is the ultimate preventive remedy against tacit collusion. On close analysis, the merger-only enforcement paradigm against tacit collusion generates a systemic risk of type II errors. Part of this enforcement gap may, however, be alleviated through a more muscular enforcement of the rules on coordinated conduct (i.e. Article 101 TFEU) and on unilateral conduct (i.e. Article 102 TFEU). In this later respect, the paper formulates a possible theory of harm that would entitle agencies and courts to apply Article 102 TFEU to specific types of conduct by oligopolists.

The concept of abuse of collective dominance may in particular be applied to the artificial tactics which oligopolists adopt to protect an observed collusive equilibrium from the natural, disruptive effect caused by an external shock (entry, natural disaster, change in tax rate, etc.). In this sense, the paper is different from other scholarly proposals that recommend applying rules on unilateral conduct to excessive oligopoly prices and/or facilitating practices.

Number of Pages in PDF File: 80

Keywords: Oligopoly, tacit collusion, competition, collective dominance, mergers, abuse of dominance

JEL Classification: K21, L4

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Date posted: February 6, 2012 ; Last revised: February 18, 2013

Suggested Citation

Petit, Nicolas, The Oligopoly Problem in EU Competition Law (February 5, 2012). Research Handbook in European Competition Law, I. Liannos and D. Geradin eds., Edward Elgar, September 2013. Available at SSRN: http://ssrn.com/abstract=1999829 or http://dx.doi.org/10.2139/ssrn.1999829

Contact Information

Nicolas Petit (Contact Author)
University of Liege ( email )
B-4000 Liege
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