Balancing Consumer Welfare and Public Interest in Competition Law

Abstract

When competition law is used to promote public interest, certain restrictive conduct may be immunized, while some pro-competitive behavior suppressed. This paper discusses the risks to market competition, institutions and consumer welfare of accommodating public interest concerns in competition enforcement. Promoting public interest may paradoxically lead to lower social welfare as market competition is weakened and incentives are distorted. A case is made to ring fence competition regime from public interest regime; to limit public interest considerations to the highest societal objectives that could only be pursued outside the market system; and to intervene in behalf of public interest in a transparent and systematic process.

Keywords: public interest, competition law, economic efficiency, mergers