Introduction

Competition law in the EC is now presented, by DG Competition, as a set of rules dominated by an economic paradigm that focuses on consumer welfare. Now we explore further what an economic approach to competition law may entail. The aim of this chapter is to present an analysis of the relationship between competition law and economic learning. Given the Community's recent conversion to economics, we use US law to learn some lessons. The central argument is that, depending on which economic premises one begins with, the prescriptions for competition law change, sometimes quite drastically. This means that embracing economics is only the starting point. It is now imperative to identify which economic approach the Commission takes. The significance of economic paradigms, from an American perspective, was noted by Professor Baker in the following terms: ‘While lawyers including judges are in control of prosecutorial choices and judicial decisions … it is fair to say that, from a longer term perspective, decade-to-decade, or era-to-era, antitrust has been shaped more importantly by the arguments of economists.’ This position is too sanguine, as there is also a political dimension that drives the adoption of economic theories. A novel economic theory should be consistent with the judicial and enforcement policy of the time in order to have a chance of success, and transitions to new economic paradigms are often preceded by policy commitments that go in a similar direction. In short, economic paradigms change when political paradigms shift.