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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