Competition, in a commercial context, can be regarded as a process encompassing firms that strive to win the customersâ business in the market place.1 This process may lead to a firm succeeding in seeing off its competitors, by being the most efficient and innovative towards its customersâ needs. An undistorted competitive system should bring better outcomes than those achieved in a monopolistic market: lower prices and better products, wider choice for consumers and greater efficiency.2
As pointed out by the UK Government, âcompetition helps consumers get a good deal. It encourages firms to innovate by reducing slack, putting downward pressure on costs and providing incentives for the efficient organization of production.â3 Thus, vigorous competition between firms may be considered as a fundamental tool in order to develop strong and efficient markets.
1.1 Different policies and different objectives
Enhancing efficiency,4 however, is not the only objective of competition law, but other goals may be identified. These include the promotion of consumer welfare5 and consumer choice,6 the achievement of market integration7 and the encouragement of economic freedom, fairness and equality in the market.8 Uncertainty, then, has recently arisen as to the opportunity to consider the promotion of an effective competitive process as a means to achieve these goals or as an objective of competition per se.9
More generally, there is vigorous debate among competition authorities and governmental bodies as to the objectives of competition law.10 It is difficult to find a common view also in the literature and in the jurisprudence on what the aims of competition policy have been until now. Although it seems clear that greater weight is now given to economic rather than political objectives, there is no definitive answer or consensus on the issue.11
For instance, while in the United States relevant authorities have more than once identified the maximization of consumer welfare as the proper legitimate aim of competition policy,12 in other jurisdictions the emphasis on such a goal is less obvious. In this sense, the European Commission, while recognizing the protection of consumer welfare as one of the predominant objectives of modern competition law, has nevertheless referred also to other goals to be achieved through the enforcement of competition policy.13 This can be easily explained by considering that EU competition policy has so far been highly influenced by the legislative framework of the EC Treaty of Rome,14 which set out a number of additional goals.15
Contrasts have also arisen in the literature, where several authors have mentioned different and potentially conflicting goals for EU competition policy. Bishop and Walker, for instance, identify two main objectives: market integration and the economic goal.16 Motta, then, considers efficiency and European market integration as the main aims of competition, although he recognizes the role of social and political reasons.17 Ahlborn and Padilla instead identify three groups of objectives: fairness, welfare and efficiency, and market integration.18 Along the same lines, Monti indicates three core aims of EU competition law: efficiency, market integration and the protection of economic freedom.19
All these views seem to confirm that âEU competition law is a bit like a multiple personality, fascinating but complicated.â20 A debate may arise, inter alia, on whether market integration is an intermediate goal, which in turn should achieve the ultimate welfare objective, or whether it is itself an ultimate goal. A second question, what is more, could also be posed in relation to the optimal standard that should be adopted in the enforcement of competition rules: should the legal test directly reflect the need for market integration or should it be better based on a welfarist approach? In this second case, should the enforcement test pursue consumer or total surplus? It is undoubted that it would be difficult to reconcile, in the legal enforcement standard, all the various objectives that may potentially be assigned to competition policy.
The discussion on the objectives of competition policy, further developed in the next sections, is thus relevant as far as it helps to understand which test should be applied in the enforcement of the competition rules. The enforcement test, indeed, may diverge from the ultimate competition policy aim.
The optimal solution finally suggested reveals its clear effectiveness also when applied in the context of standard setting. In particular, the importance of the test selected will be further explained in light of the aim to guarantee the optimal functioning of standardization processes, although a more effective policy framework seems also to be necessary to this purpose. In that particular environment, the interests of IPRs owners, consumers and licensee-manufacturers could be often at odds. The adoption of one legal test over another, when enforcing competition law against anticompetitive practices, may lead to very different outcomes, which may eventually boost or compromise the whole standardization process.
Hence, it is clear the need to identify a priori the ultimate objective of competition law and the optimal test in the enforcement of the rules. The next sections are therefore devoted to define the scope of the debate and to identify possible answers to the mentioned questions.