The Impaired Economization of European Antitrust: The Quarrel over the “Effects-Based Approach” in European Competition Policy

Beginning in the 1970s, Western antitrust-regimes faced profound doctrinal challenges. Critics decried populist government activism via competition policy and jurisdiction, a disregard for possible beneficial effects of restraints of trade, and the lose and selective application of economic theory in antitrust analysis. What followed during the 1980s was, in retrospect, far-reaching change in antitrust doctrines, practices, and enforcement – often called the “Chicago Revolution” in American competition policy. By re-focusing competition policy from concerns about market structure and power to efficiency-effects of market practices, the new antitrust-movement stripped American competition policy from much of its earlier political content. Our paper analyzes the quarrel over the new approach to antitrust in Europe. Partly caused by institutional idiosyncrasies and partly caused by doctrinal misfits, the European antitrust regime only slowly adopted an impaired variety of economized competition policy. By documenting professional debates over the new approach to antitrust and its application in litigation and jurisprudence we show how European elites resisted the “modernization” of their policies towards market power and corporate size. Conceptually, the paper contributes to understanding the institutional mediation of the diffusion of ideas and the role of political quarrels over economic doctrines in processes of institutional and economic change.