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12 Utrecht L. Rev. 1 (2016)

handle is hein.journals/utrecht12 and id is 1 raw text is: Utrecht a e e This article is published in a peer-reviewed section of the Utrecht Law Review Rethinking European Competition L From a Consumer Welfare to a Capablity Approach Rutger Claassen & Anna Gerbrandy* 1. Introduction To ensure the efficient functioning of markets, European competition law prohibits undertakings from entering into anti-competitive agreements and abusing a dominant position on the market.' The standard justification for European competition rules lies in the welfare gains of having competitive markets for consumers. Coordination of behaviour between undertakings drives up prices, which has a negative effect on consumer welfare. Competition law therefore serves to prevent a series of economic benefits (for companies) in order to realize another series of economic benefits (for consumers). However, companies sometimes enter into agreements to further a non-economic goal, such as rendering production facilities more ecologically friendly or strengthening social cohesion in inner-city areas. They may have different motivations for doing so, but in these cases the question arises: should European competition law take these non-economic interests into account? If so, how can this be done? Since the 1990s the European Commission has increasingly adopted a consumer welfare approach to the interpretation of European competition law. In this paradigm, it is difficult to give non-economic interests their due, as we will show by discussing three recent cases in which economic and non-economic goals clash (Section 2). While the consumer welfare approach has been criticized, it is a challenge to come up with a constructive alternative. In this article, we propose the capability approach as an alternative framework for interpreting competition law. This approach was developed by economist Amartya Sen and philosopher Martha Nussbaum as an alternative to utilitarian approaches in welfare economics and theories of justice. We will introduce the main features of the capability approach and propose how it can be applied to competition law, focusing on two key issues: the identification and the weighing of capabilities in a competition case (Section 3). Third, we argue that there are good principled reasons to incorporate non-economic goals into competition law, both in terms of legal interpretation of the relevant EU texts, moral arguments about the appropriate division of labour between private companies and political bodies, and in terms of political considerations about the legitimacy of decision-making by competition authorities (Section 4). Fourth, we compare how both the capability approach and the consumer welfare approach * Dr. R.J.G. Claassen (R.J.G.Claassen@uu.nl) is Associate Professor of Political Philosophy at Utrecht University's Department of Philosophy & Religious Studies (the Netherlands). Prof. Dr. A. Gerbrandy (A.Gerbrandy@uu.nl) is Professor of Competition Law at the Utrecht University School of Law (the Netherlands). This paper was prepared for the Mancept Workshops on Political Theory, held at Manchester in October 2014. We would like to thank participants in this workshop for their valuable comments. Also we thank participants in the Economic Ethics Network Meeting (July 2014), Willem Verschoor and two reviewers at this journal for their comments. Rutger Claassen thanks the Netherlands Organization for Scientific Research (NWO) for support under his Veni grant no. 275-20-031. 1 As is well known, the main provisions of European competition law are Art. 101 TFEU (prohibition on anti-competitive agreements (cartels)), and Art. 102 TFEU (prohibition on abuse of a dominant position). Mergers are subject to an ex ante regime of control as laid down in the merger regulation. Although we focus on agreements that fall within the scope of Art. 101 TFEU the general line of reasoning may equally apply to Art. 102 TFEU or to the scrutiny of mergers. www.utrechtlawreview.org Volume 12, Issue 1 (January) 2016 http://doi.org/10.18352/ulr.321 I Cni

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