The Object of My Effect: The Role of Economics in Restrictions “By Object” in the European Union

Wed Sep 30 12:45:46 UTC 2015
By Pedro Posada and António Freitas

Economic analysis has played an increasingly important role in the application of competition law, even in relation to investigations traditionally assessed from a legal perspective, such as potential infringements of Article 101 of the Treaty on the Functioning of the European Union.

Despite the increasing importance of the tools offered by economic theory, both the European Commission and national competition authorities in Europe tend to categorize many practices as restrictions “by object.” For example, in Spain, nearly all sentences imposed by the Spanish Competition Authority have been categorized as infringements “by object.” These are practices that produce “obvious restrictions to competition” so that the use of economic analysis is usually not required to determine if the conduct infringes competition law or not. Over the years, however, this has raised many concerns as to whether the level of enforcement has been appropriate in such cases.

In this NERA paper, NERA Senior Consultant Pedro Posada and Economic Analyst António Freitas review the approaches that competition authorities and courts have taken, and outline the economic principles that the authors believe should be considered when dealing with such cases.