Predictability: A Mistreated Virtue of Competition Law

Abstract

Lacking predictability of competition-law enforcement has its costs. This paper shows that academic analyses of what competition laws should look like do not always treat this factor adequately, paying instead excessive attention to the problem of error. Namely, some analyses completely ignore unpredictability as a relevant factor. Others treat effects of unpredictability as a non-substantive consideration that is more akin to resources expended on operation of competition law than to the effects of error. And still others do not sufficiently distinguish between the mis-deterrence effects of unpredictability and of error, describing both with error-related language. The paper further discusses three possible reasons why such mistreatment of predictability may be taking place. First, it may be a result of authors’ convenience. Second, it may be due to the commentator not fully comprehending the role of predictability. Third, it may be a strategic choice by the author to make competition law more aligned with the interests of competition practitioners and/or defendants. It is also briefly discussed how problematic each reason is and what solutions might be available.

Keywords: competition law and economics, industrial organization, Chicago School, antitrust, enforcement, predictability, legal certainty, accuracy, deterrence, error-cost approach, decision theory

JEL Classification: K21, K42, L40