Competition Law, Consumer Policy and the Retail Sector: Systems' Relation and the Effects of a Strengthened Consumer Protection Policy on Competition Law

Abstract

In March 2006, the French Competition Council fined 13 leading brands in the cosmetics industry and 3 major distributors of luxury perfumes a total of €46.2m for violating competition law. While cartels and competition enforcement are not new to competition law, the case triggers significant questions as it affects a retail sector, with an obvious, explicitly-recognised and direct impact on consumers. As distinct from competition infringements that are found to have taken place on a wholesale market and presumed to have an effect on consumers further down the chain, infringements in retail markets trigger more direct consumer concerns inasmuch as they may more directly and obviously harm consumer price, choice or other interests, thereby also triggering a potentially harsher application of competition law itself. Who is the consumer? What is the role of the consumer in competition law? How does consumer policy and law interact with competition policy and law? How do the developments in one body of law impact on the developments on the other body of law? And what implications does a strengthening in the perceived role of the consumer have on competition law and enforcement? This paper begins by defining and giving the basics of competition and consumer policy and law. It then inquires into the 'theoretical' relation between the two bodies of law, and finally, it explores the 'practical' implications of the consumer interest, and its strengthening, within competition law (procedural and substantive). The paper concludes by triggering some questions on 'harm to consumers' vs 'harm to competition', and whether the former could become an alternative threshold to competition enforcement.

Keywords: Competition Law, Consumer Policy, Retail

JEL Classification: K21, L49