Fashioning Antitrust Regimes: One Legal Rule Does Not Fit All

Abstract:     
Countries differ in the rule used for adjudicating antitrust cases. Some consider per se illegal some business practices while others use the rule of reason to outlaw them in a case by case basis. And, countries sometimes use different criteria to adjudicate cases in different policy domains. In the US, avert collusion is per se illegal, while it used to be adjudicated using the rule of reason in the EU and most European jurisdictions. By contrast, Europe was prone to use a per se illegality rule when adjudicating the use of exclusionary practices by dominant firms, while similar monopolization cases are judged using the rule of reason in the US. This paper shows that neither per se illegality nor the rule of reason fits all countries and policy domains. Effectiveness of antitrust enforcement is maximized when the legal standard is fashioned to take into account the effect of adjudicating rules on the conduct of firms and its impact on the likelihood of causing harm. The per se illegality rule is more efficient than the rule of reason to deter firms to collude in large markets and to deter dominant position abuses in small markets.

Keywords: Antitrust, legal rules, competition restrains, per se illegality, rule of reason

JEL Classifications: K21, L40

Working Paper Series