Competition Policy in the EU: Fifty Years on from the Treaty of Rome

A volume that takes stock and looks ahead on the development and implementation of competition policy in the European Union fifty years after the Treaty of Rome. Competition policy has emerged as a key policy in the EU with competition acting as the driving force for economic efficiency and the welfare of citizens. Case law has been established to control and prevent anti-competitve behavior, state aid control has consolidated and evolved towards a more economic approach, and the authority of the EC and the judicial review of the Court of the First Instance (CFI) and the European Court of Justice (ECJ) are firmly etsablished.
The book provides an economic approach to competition policy and reflects the main areas of interest, open issues and progress in the area. The volume examines the design of competition policy institutions, the evolution of the implementation of competition policy and its convergence or divergence with US practice, restrictive practices, cartels, abuse of dominance, merger control and state aids. The volume also analyses the interaction of competition policy and regulation, and studies its application to telecoms, banking and energy sectors. All chapters are written by leadfing specialists combining theoretical with practical knowledge and discussing the underpinings of the application of law.


Contents
List of Figures xi
List of Tables xiii
Abbreviations xiv
List of Contributors xviii
1. Xavier Vives Introduction: Competition Policy in Europe 1
1.1. The Treaty of Rome 1
1.2. An Overview and Summary of the Contributions 2
1.3. Concluding Remarks 17
2. Philip Lowe The Design of Competition Policy Institutions
for the Twenty-first Century: The Experience of the European
Commission and the Directorate-General for Competition 21
2.1. Introduction 21
2.2. How to Design a Modern Competition Policy and
Enforcement System 23
2.3. Modernization of the Legal Instruments 24
2.4. Resource and Change Management inside
Directorate-General Competition 30
2.5. Reforming the Structures 34
2.6. Reforming the Processes 36
2.7. Current Management Challenges 38
2.8. Resources 39
2.9. Conclusion 41
3. Matthew Bennett and A. Jorge Padilla Article 81 EC
Revisited: Deciphering European Commission
Antitrust Goals and Rules 43
3.1. Introduction 43
3.2. A Brief Overview of Article 81 45
3.3. The Goal(s) of Article 81 57
3.4. The Concept of ‘Restriction of Competition’ 60
3.5. Article 81: Structured Rule of Reason or Quasi per se
Rule? 62
3.6. Conclusions 65
vii
4. John Vickers Some Economics of Abuse of Dominance 71
4.1. Introduction 71
4.2. Dominance 72
4.3. Some Economics of Anticompetitive Exclusion 74
4.4. Predatory Pricing 81
4.5. Discounts and Rebates 84
4.6. Refusal to Supply, Tying, and Bundling 86
4.7. Article 82: The Future 92
5. Massimo Motta Cartels in the European Union: Economics,
Law, Practice 95
5.1. Introduction 95
5.2. Economic Analysis of Collusion 96
5.3. Cartels in the European Union: Law and Practice 105
5.4. A Brief Summary 128
6. Bruce Lyons An Economic Assessment of European
Commission Merger Control: 1958–2007 135
6.1. Introduction 135
6.2. Historical Context 137
6.3. Merger Appraisal and Interventions 149
6.4. Merger Policy Evaluation 163
6.5. Conclusions 168
7. David Spector State Aids: Economic Analysis and
Practice in the European Union 176
7.1. Introduction 176
7.2. Why Should State Aid be Prohibited? 177
7.3. When Can State Aid be Beneficial? 186
7.4. The Limits of Economic Analysis 190
7.5. Past Enforcement and the Current Overhaul 194
8. Martin Hellwig Competition Policy and Sector-specific
Regulation for Network Industries 203
8.1. Introduction 203
8.2. Comparative Advantages and Disadvantages of
Competition Policy and Sector-specific Regulation 210
8.3. How Should the Line be Drawn between the
Regulated and Unregulated Parts of a Network Industry? 220
8.4. On the Coexistence of Competition Policy and
Sector-specific Regulation 228
viii
Contents
9. Jordi Gual and Sandra Jo´dar-Rosell European Telecoms
Regulation: Past Performance and Prospects 236
9.1. Introduction 236
9.2. The Liberalization Process up to 2003: Introducing
Competition 237
9.3. Regulation in a Converging Environment 251
9.4. Conclusion 256
10. Elena Carletti and Xavier Vives Regulation and
Competition Policy in the Banking Sector 260
10.1. Introduction 260
10.2. Regulation in the Banking Sector: Rationale and
Instruments 262
10.3. Competition in the Banking Sector 263
10.4. Competition and Stability: A Real Trade-off? 265
10.5. Competition Policy in the Banking Sector in the
European Union 266
10.6. The Application of Competition Policy to the
Banking Sector in the European Union 268
10.7. Integration and Liberalization in the Financial
Industry in Europe: Recent Developments 280
10.8. Concluding Remarks 282
11. Richard Green European Union Regulation and
Competition Policy among the Energy Utilities 284
11.1. Introduction 284
11.2. Obstacles to Competition in the Energy Sector 285
11.3. Moves towards Deregulation 287
11.4. The First Directives 290
11.5. The Second Directives 293
11.6. Agreements between Firms 294
11.7. Merger Policy 296
11.8. The Impact of Liberalization 299
11.9. The Sector Inquiry of 2005–7 306
11.10. Conclusions 310
12. William E. Kovacic Competition Policy in the
European Union and the United States: Convergence
or Divergence? 314
12.1. Introduction 314
12.2. Why does Convergence or Divergence between the
EU and US Systems Matter? 317
12.3. Similarities and Dissimilarities in the Substance
of EU and US Competition Policy 321
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Contents
12.4. Centrifugal and Centripetal Forces 326
12.5. A Suggested Agenda for the Future: Concepts
and Means 333
12.6. Conclusion: Future International Relationships 340
Bibliography 344
Cases Cited 362
European Directives 364
Index 367