Welfare Standards in U.S. and EU Antitrust Enforcement

Abstract

In Part I of this article, we discuss the importance of the development of economic analysis in US and European competition law to better explain how the choice of economic welfare standard has become the fundamental question of which goal to choose for competition law. This discussion sets up our substantive analysis of goals. In this article, we analyze two types of situations in which there would be a different outcome based on the goal implemented. In Part II, we discuss the first scenario. This scenario involves resale price maintenance (RPM). For RPM, we argue that even if there were a different welfare standard across jurisdictions as between Europe and the United States, in practice, it would have very little global impact. In the next part, Part III, we analyze the question of different global standards with regards to merger control. In this second scenario, we analyze a difference in welfare standard between merger regimes where the use of efficiencies might play out differently across Europe and the United States depending on the welfare standard used. Under this second scenario, the welfare standard matters globally as to business outcomes in a way in which it does not under the first scenario. If one major merger regime blocks the merger, it effectively blocks the merger globally. Part IV provides our concluding thoughts on the future and desirability of convergence around total welfare as the sole goal in the practice of competition economics globally.

Keywords: antitrust, competition law, goals, total welfare, consumer welfare, RPM, mergers, efficiencies, resale price maintenance, United States, Europe

JEL Classification: K21, l40, l42