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Populism & Antitrust

Populism and Competition Law Enforcement: Challenges and a Possible Idea worth Exploring
Forthcoming in Competition Law Insight, May 2018
Dr Assimakis P. Komninos*
Partner, White & Case LLP
Visiting Research Fellow, University College London
1. Competition enforcers under siege
One of the most important topics of discussion during the recent International Competition Network
(“ICN”) conference in New Delhi was the constant attack-pressure felt by competition enforcers
from populism/politics.
Not all enforcers agree on whether this should be termed a “problem”. There are those who believe
that it is absolutely legitimate for the public to question the “relevance” of competition policy to
them, especially after the global financial crisis which changed many of the given perceptions of the
free market economy. It is, therefore, believed that too much emphasis on efficiency and consumer
welfare would be counter-productive. Then, there are those who view the criticism as largely unfair,
in the sense that competition authorities have been doing a formidable job over the last decades in
keeping markets open and defending the consumers’ interests. Surely, they argue, this must be a
failure on their behalf to get the message through to the masses and they need to try harder to
popularise the benefits of antitrust enforcement.
In many respects, what is perceived as a “problem”, is also the result of antitrust’s own success. To
paraphrase a seminal article, competition enforcement in Europe is no longer “tucked away in the
fairyland Duchy of [Brussels] and blessed […] with benign neglect by the powers that be and the mass
media”.1 EU competition enforcement is now at the centre of economic life and antitrust decisions
are widely reported, especially when they entail the imposition of huge fines on powerful
Recently, we have seen a surge in press articles on antitrust and the way it applies to digital market
giants. The gist of these articles is that competition enforcement has fallen behind, not being able to
curb the formidable power exercised by the digital platforms that dominate today’s online world.
This is not a line of criticism emanating from fringe publications. Articles of this kind have also
appeared in “serious” papers, such as the Financial Times and The Economist, which are considered
to be the bastions of the capitalist system. Apart from the fact that some of these ideas may be selfserving, i.e. they may be due to an inbuilt distrust in the traditional press against the digital
platforms, which they see as competitors, a recent study by Dirk Auer and Nicolas Petit on “antitrust
versus the press” shows that this is by no means a recent phenomenon.2 Media coverage of
“monopolies” has always been negative and, in that sense, does not go hand in hand with one of the
most fundamental principles of antitrust enforcement which is that the competition rules should not
The usual disclaimer applies. These are the author’s purely personal views.
Eric Stein, “Lawyers, Judges, and the Making of a Transnational Constitution”, 75 AJIL 1 (1981).
Dirk Auer and Nicolas Petit, “Antitrust versus the Press: Two Systems of Belief About Monopoly”, available at
SSRN: https://ssrn.com/abstract=3112150.
target market structure as such but rather deal with conduct. If we were to shift focus from conduct
to structure, our competition system would fundamentally change and antitrust would be
transformed to regulation.
Meanwhile, in the US a fundamental critique of conventional antitrust enforcement has been
unleashed (termed as “hipster antitrust” by the doubters), pointing to rising concentration levels and
declining competition in many industries.3 Add to that also a bit of income inequality and you have a
rather explosive mix of general discontent with antitrust.4 In the EU, similar voices of criticism are
heard and many respectable academics put forward a proposition that competition policy should
espouse other values than just efficiency, in particular in response to the recent populist onslaught.5
2. How to deal with the perceived “problem”
The question, however, remains whether the perceived “problem” is real or not. Certain recent
studies do not lend credence to these concerns. In the US, Carl Shapiro has persuasively rebutted
some of the arguments that antitrust has failed the consumers by allowing too much concentration
of power.6 In the EU, the Chief Economist at DG Comp, speaking in his personal capacity, recently
presented the results of a preliminary research on concentration trends since the financial crisis
(2010-2015) in the five largest economies in the EU. He found that the level of industry
concentration has not changed on average, profit margins have increased less than in US, while
income inequality has increased but is still below that of US.7
But the fact remains that there is discontent. Broadly speaking, enforcers are trying to deal with this
challenge in two ways:
(a) The first way is by trying to be a bit “populist” themselves. For example, authorities may
prioritise specific cases that attract headlines and respond to modern anxieties of public
about different topics, such as data protection, privacy, climate change, inequality and the
“problem” of concentration of economic power. This is certainly the line adopted by
Commissioner Vestager. We can also explain through that lens the recent wave of excessive
This line of criticism has also been expressed by the Obama Administration’s Council of Economic Advisers
(CEA). See Council of Economic Advisers, “Benefits of Competition and Indicators of Market Power”, Issue
Brief, May 2016. Their conclusions were the following: “Recent indicators suggest that many industries may be
becoming more concentrated, that new firm entry is declining, and that some firms are generating returns that
are greatly in excess of historical standards. In addition, the dollar volume of merger and acquisition activity is
at record levels. There are also numerous barriers to entry at the State and local levels in the form of
occupational licensing and other restrictions that can affect workers as well as entry by small businesses and
See Sean Ennis, Pedro Gonzaga and Chris Pike, “The Effects of Market Power on Inequality”, CPI Antitrust
Chronicle, October 2017.
See e.g. Professor Ioannis Lianos, “Polycentric Competition Law”, Current Legal Problems Lecture Series
See Carl Shapiro, “Antitrust in a Time of Populism”, 24 October 2017, forthcoming in International Journal of
Industrial Organization. See also Gregory Werden and Luke Froeb, “Don’t Panic: A Guide to Claims of
Increasing Concentration”, available at SSRN: https://ssrn.com/abstract=3156912.
Tommaso Valletti, “Concentration trends in Europe”, presentation at the CRA conference, Brussels, 12
December 2017. The Chief Economist’s presentation ultimately includes some questions as to whether the
upward trend in profit margins increases the potential for anticompetitive leverage and if the competition
authorities operate the “right” standard for potential competition. He concludes (rightly) that “if we do not
properly adapt to changing markets, the risk is politics will (in ways we might not approve of)”.
pricing cases brought by the Competition and Markets Authority (“CMA”) in the
pharmaceutical area.
(b) The second way is by increasing outreach, advocacy and raising public awareness of
competition action – this is the more conventional way. All agencies agree that they need to
actively contribute to the public discourse rather than staying closed in their ivory towers. At
the ICN conference, the Mexican antitrust agency (“Cofece”) reported a particularly
interesting initiative: it put together a list of general competition law topics that it would like
the candidates in this year’s Mexican general election to discuss during their election
debates. Cofece is now trying to get the candidates to sign up to the list and include some of
the topics as part of their political agendas. Such a political campaign outreach is, indeed, an
innovative advocacy effort.
The above two ways are not mutually exclusive and can be combined. Both can fail miserably in their
professed objectives.
The first way (respond to populism with a degree of populist enforcement) is, first of all, of dubious
effectiveness. You can never beat a real populist by trying to imitate her. The real populist will
always be better and more effective than the fake populist. But it may also lead to serious collateral
damage. It could lead to the demise of the technocracy that has characterised antitrust enforcement
over the last six decades. In EU competition and merger law enforcement, in particular, although the
Commission is also a political body, it has consistently acted in a detached way from politics. Then,
the supranational nature of EU competition law and its institutional setting makes any intrusion of
politics a very dangerous thing. The absence of a true European demos means that politics to a great
extent remains national. True, there are certain political currents that are nowadays common but it
would be quite risky for the Commission to go down that path and this could lead to a
nationalisation of competition policy in Europe.
The second way has no obvious shortcomings other than it clearly has not worked and has not
brought competition enforcement closer to the citizens. Competition decisions and advocacy remain
relatively distant from the lives of people. This is an inescapable consequence of the fact that
competition intervention remains by definition a very “indirect” tool of intervention in the market. It
safeguards the process of competition on the merits but it is not about outcomes or certainly about
re-distribution. More targeted and clever efforts of outreach are necessary.
3. A modest proposal to make competition enforcement a bit more relevant to citizens
Thinking out of the tool-box, one idea worth exploring would be for competition authorities to
engage a bit more in re-distribution in terms of remedies that are consumer-facing. I am thinking
here, in particular, of voluntary schemes whereby the competition authority strikes a deal with
competition infringers, as a result of which the latter agree to offer monetary or in natura
compensation to the victims of their conduct, in exchange of a finding of non-infringement or a fine
reduction.8 The UK system allows for such voluntary redress schemes9 and there is no reason why
they could not be imported into the EU competition enforcement system.
See further Ariel Ezrachi and Maria Ioannidou, “Public Compensation as a Complementary Mechanism to
Damages Actions: From Policy Justifications to Formal Implementation”, 3 JECLAP 536 (2012); Maria
Such schemes allow the consumers to appreciate the more direct benefits of antitrust intervention
and would bring competition law enforcement closer to the citizen. Consumers are not interested in
high fines or in what they see as “abstract remedies” with no direct bearing on the harm they
suffered. Consensual mechanisms that would allow for direct remedies would, therefore, be
welcomed and make competition law enforcement more relevant to them.
For the avoidance of doubt, we are not advocating here a fundamental revisiting of the roles of
public and private enforcement.10 Public enforcement primarily pursues injunctive and punitive
objectives and should continue to do so. The punitive objective is pursued through the imposition of
fines, which punish infringers and deter them from breaching the law in the future (specific
deterrence) but also deter other persons from engaging in, or continuing, behaviour that is contrary
to the competition rules (general deterrence).11 The injunctive objective is pursued through the
imposition of positive or negative measures aiming at the discontinuation of the illegal behaviour.
The above, however, does not suggest that competition authorities never pursue restorative or
compensatory objectives. There are cases where the public agency enforcing the competition rules
may take into account the injury to specific victims caused by an anti-competitive practice and
impose on the infringer the obligation to compensate those persons. Indeed, the public agency may
pursue this informally, for example through an informal settlement.12 In addition, some competition
regimes also provide for a role for the State in claiming damages, acting on behalf of the victims.
So competition authorities, although better suited to prosecute and punish illegal behaviour, still
could, in appropriate circumstances, be more active in accepting remedies and commitments that
serve compensatory aims on a voluntary basis. In exchange, the companies concerned could either
avoid an infringement decision (in case of commitment decisions pursuant to Article 9 of Regulation
1/2003) or a higher fine (in which case, agreeing to put together a voluntary redress scheme would
lead to a reduction of the fine). Enforcers would retain wide discretion on whether to accept such
mechanisms and would consider them only if the companies concerned presented a well-articulated
redress scheme with in-built mechanisms that would not necessitate any monitoring by the antitrust
In these times of populism, it is time to think about creative steps that would make the role of
competition authorities more relevant to the citizens. Offering the competition infringers incentives
(in particular, via the fine reduction) to provide for consumer-facing remedies would be one step in
Ioannidou, Consumer Involvement in Private EU Competition Law Enforcement (Oxford, 2015); Catherine
Prieto, “Incitations aux réparations spontanées dans le cadre du public enforcement”, 2/2016 Concurrences 1.
CMA, Guidance on the approval of voluntary redress schemes for infringements of competition law, 14
August 2015.
See Assimakis Komninos, “Relationship between Public and Private Enforcement: quod Dei Deo, quod
Caesaris Caesari”, in: Philip Lowe & Mel Marquis (Eds.), European Competition Law Annual 2011: Integrating
Public and Private Enforcement of Competition Law – Implications for Courts and Agencies (Oxford/Portland,
See European Commission Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of
Regulation No 1/2003, OJ [2006] C 210/2, para. 4; Case 41/69, ACF Chemiefarma v. Commission,
ECLI:EU:C:1970:71, para. 173; Case C-308/04 Ρ, SGL Carbon AG v. Commission, ECLI:EU:C:2006:433, para. 37;
Case C-76/06 P, Britannia Alloys & Chemicals Ltd v. Commission, ECLI:EU:C:2007:326, para. 22.
See examples in Ariel Ezrachi and Maria Ioannidou, “Public Compensation as a Complementary Mechanism
to Damages Actions: From Policy Justifications to Formal Implementation”, 3 JECLAP 536 (2012), p. 541.
the right direction. It would make competition enforcement less “indirect” and would boost the
legitimacy of competition enforcement overall. Doing something on the remedies front would be
preferable to meddling with substantive competition analysis and weakening the applicable legal
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