The 'Consumer Choice' Paradigm in German Ordoliberalism and its Impact Upon EU Competition Law
Europa-Kolleg Hamburg, Discussion Paper No. 1/14
38 Pages Posted: 23 Feb 2015
Date Written: July 22, 2014
This paper explores the origin and development of the "consumer choice" paradigm as the core concept of German ordoliberal thought which has had a strong impact on EU competition policy and law. Outside Germany, ordoliberal thought is often identified with the learning of the original "Freiburg School" which represents the formative period of German ordoliberalism after the Second World War. Major developments since then have remained largely unrecognized. This paper sets out the important insights the have markedly changed some of the basic concepts of the "Freiburg School" so as to bring ordoliberalism into line the modern economic learning. The core tenets, however, remain: the crucial role attributed to consumers' choice as the driving force behind producers' rivalry, the dependence of consumers' freedom of choice upon an open market structure, efficiency (consumer welfare) as the result of competition rather than of an individual entrepreneurial market strategy. The core elements of this approach are traced back to classical liberalism and it is shown how they have been enriched and developed beyond the "Freiburg School" toward the contemporary version of ordoliberalism. This approach is still reflected and should continue to be reflected by the jurisprudence of the European Court of Justice, because it avoids the kind of consumer welfare (or consumer harm) fallacy by which the "more economic approach" of the EU-Commission risks to be caught.
Keywords: EU competition law, EU competition policy, ordoliberalism, liberalism, Freiburg school, consumer choice, consumer welfare, more economic approach, efficiency, economic order, economic system, insitutional economics, economic freedom, competition as rivalry
JEL Classification: B15, B25, D63, K21, L40, P19
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