Dialectical Antitrust: An Alternative Insight into the Methodology of the EC Competition Law Analysis

The main idea behind this article was to perform a theoretical analysis of the purposes and tools of antitrust policy and law. An ancient dialectical method has been applied to separate different components of competition policy with the following deconstruction of the conflicting essence of those elements without inevitable evening-out the distinctions between them. Dialectical approach to antitrust demonstrates why competition deserves to be explored independently from other legitimate economic goals and that the primary purpose of competition law logically is protection (via preventive antitrust, i.e. arts 101-106 TFEU) and promotion (via proactive antitrust, i.e. sector-specific regulation) of competition. Dialectical antitrust does not deny that consumer welfare constitutes a meta-goal of modern competition policy. Indeed in the hierarchy of economic values consumer welfare remains decisive, but methodologically it is neither exhausted nor entirely embraced by competition law, which exists in order to regulate competition. Antitrust theory has striven for a long time to reconcile the apparent dilemma between the aspiration to protect the freedom of undertakings to benefit from their successful competition on one hand, and the freedom of their less successful counterparts to participate in this competition on the other; to provide for firms liberal environment on the one hand and to fine-tune their behaviour in order to establish legal predictability and economic efficiency on the other; to protect competition on the one hand and maximise common benefits for society on the other. Essentially, those three crucial dimensions of the competition dilemma can be solved within the framework of dialectical antitrust, which on the level of methodology proposes to utilitise those conflicts by placing their different components into separate parentheses

Rediscovering the Spirit of Competition: On the Normative Value of the Competitive Process

The paper develops its core argument in 12 sections structured in three parts: I Positive analysis; II Normative proposal; and III Operationalisation. Section B illustrates the traditional justification for the utilitarian perception of competition and analyses its main weaknesses. Section C explores conceptual differences and underlines the fundamental similarities of the two major deontological antitrust schools (Austrian and Ordoliberal). Section D provides some conceptual argumentation for the treatment of competition as a constitutional value. Section E introduces the theoretical framework of value pluralism which reconciles the conflicts between constitutional values. The methodology of value pluralism is applied in order to balance the value of competition with the interests of welfare. Section F opens the second part of the paper. It explores competition as the essence of liberal democracy, claiming that the economic aspects of competition together with its political (elections) and cultural (free speech) elements constitute the core of democratic governance. Accordingly, these values should be protected as a matter of evolutionary choice of society without any utility-based verification. Section G conceptualises the ‘Oroboros dilemma’ of self-destructive freedom and democracy, which is described in the domain of competition by Robert Bork as the ‘antitrust paradox: a policy at war with itself ’. Section H continues the comparative analysis of competition. It explores regulatory practices developed for the protection of free elections (political competition) and free speech (cultural competition) on one hand and economic competition on the other. It reveals the main methodological error of antitrust, which prevents immunisation of some anticompetitive practices from sanctions on non-utilitarian grounds. This section concludes that, unlike its political and cultural counterparts, economic competition is gradually transforming into a purely instrumental consequentialist policy which corresponds neither to the semantics nor even to the syntax of the term ‘competition’. The logic of such transformation is a direct consequence of the above-mentioned methodological inconsistency between economic competition on one hand and the political and cultural aspects of competition on the other. Section I develops the argument that in certain situations anticompetitive agreements are immunised from antitrust sanctions provided that they simultaneously promote competition more than they distort it. This possibility exists in the regulation of the political and cultural aspects of competition, but it is missing in the economic context. The current structure of Article 101(3) of the Treaty on the Functioning of the European Union (TFEU) does not envisage this option. Therefore in practice courts tend to develop indirect ways of granting immunity to undertakings which cannot conform to the rigid utilitarian requirements of Article 101(3) TFEU. While acceptable, this solution is far from optimal. For this reason the section proposes a conceptual amendment of Article 101 TFEU. This proposal is designed as a contribution to the academic debate on the role of the competitive process in antitrust rather than as a direct call for changes in primary European law. Section J clarifies that the proposed deontological benchmark for competition does not diminish the importance of utilitarian values since the proposal merely extends the current regulatory framework without substituting any of its existing parts. The application of the amended Article 101 (3) TFEU would still be based upon the discretion of the decision-maker. The will of the decision-maker (be it the Commission, national authorities or courts) constitutes the central part of this section. It analyses the balancing techniques, developed by the legal and constitutional theories and implements them into the area of antitrust. Section K continues the analysis of the balancing act, dealing specifically with the technique of separation of different values. It proposes a two-step methodology of balancing. The first one is purely value-centric. It artificially isolates each value from all others in order to undertake their independent analysis which helps to understand the internal essence of each value separately. The second consecutive step recontextualises previously isolated values into the main regulatory agenda. This section demonstrates that the present-day regulatory status of competition does not enable it to be in the par-in-parem relationships with other values, because all balancing acts are performed as a one-step analysis: each value is only balanced against the others at the external level, where the one with the higher importance always prevails. This section is designed to provide the operational justification for the normative proposal developed in Section I. The last section summarises the main findings of the paper

Economic Freedom as Political Virtue: An Insight from the Perspective of Value Pluralism

This paper considers the market process as the essence and intrinsic core of liberal democracy. It disentangles market means from welfare ends and recognises the importance, constitutional status and independent stand of the former. Freedom is placed in the same categories as rights. Each constitutional right is protected not because it is efficient, useful or self-executable. On the contrary, rights are protected as a matter of evolutionary choice, as a matter of public principle, as an ethical rather than a practical value.Economic freedom usually leads to success. Its successfulness however sometimes transforms into its biggest enemy. Economic prosperity is a category which can find supporters more rapidly than the notion of economic freedom does. Therefore the latter is often perceived as a means to reach former. The main argument of this paper is that freedom itself loses its internal legitimacy if it is constantly subordinated to the tangible outcomes which it can eventually generate. Freedom can generate welfare, indeed, but welfare maximisation is neither an unconditional nor a quintessential feature of freedom. Freedom must be perceived as a driving force for entrepreneurial discovery, and a prerequisite to democracy, rather than as a mere component of the economic success. Freedom cannot be seen as purely rational, predictable and calculable

Can We Protect Competition without Protecting Consumers?

This paper suggests that an interpretation of competition solely as a means to increase consumer welfare eliminates substantial characteristics from competition as a process, depriving competition from its original meaning. It is misleading to define competition by evaluating its external role on the economy. This role is important only from the perspective of performance. From the ontological view however it is irrelevant. Some forms of competition are good or beneficial others are considered as harmful or undesirable, but in both cases we talk about different features of the same phenomenon. The idea that ‘competition has to bring positive outcomes for economy, otherwise it is not competition’ is logically incorrect. It is impossible to qualify the essence of object only by exploring its external effects. The paper concludes that competition itself deserves its protection even in circumstances when it does not lead to efficiency gains. In this respect competition can be seen as a ‘luxury product’ of market-oriented societies, which is not indispensable for achieving such values as industrial growth, market integration, social coherency, consumer welfare or innovations

Does Competition Matter? An Attempt of Analytical Unbundling of Competition from Consumer Welfare

This paper is an attempt to evaluate the conceptual relationship between two central elements of the theory of antitrust: competition and consumer welfare. These two notions are analysed in their mutual dependency. The main purpose of this paper is to show that both competition and consumer welfare are economic values of fundamental importance with no ex ante hierarchical dominance of consumer welfare over competition. In case of conflict, priority might be given to either of these values depending on the context of the assessment. As can be understood from the very etymology of the term, competition is a notion which encompasses a process, more than a result. The notion of consumer welfare, on the other hand, is result-oriented. If we are interested in the outcomes that can be generated by competition only, then the very process of rivalry between undertakings would be seen as unnecessary or, at least, not indispensable. If, however, we consider that competition (seen as a process) is important for the societal paradigm of economic development, then the outcomes generated by this process are not the only reason for the rivalry between undertakings to exist. Methodologically, the latter approach appears to be more consistent with the idea of liberal democracy

Scattering of electromagnetic waves by many thin cylinders: theory and computational modeling

Electromagnetic (EM) wave scattering by many parallel infinite cylinders is studied asymptotically as a tends to 0, where a is the radius of the cylinders. It is assumed that the centres of the cylinders are distributed so that their numbers is determined by some positive function N(x). The function N(x) >= 0 is a given continuous function. An equation for the self-consistent (limiting) field is derived as a tends to 0. The cylinders are assumed perfectly conducting. Formula for the effective refraction coefficient of the new medium, obtained by embedding many thin cylinders into a given region, is derived. The numerical results presented demonstrate the validity of the proposed approach and its efficiency for solving the many-body scattering problems, as well as the possibility to create media with negative refraction coefficients.Comment: 21 pages, 13 figure

How the Theory of Dialectical Antitrust Perceives the Role of Competition Authorities

Competition policy and law play a pivotal role in the development of the European market process. This role, however, becomes subject to revision in the time of recession. Historically each period of economic downturn is accompanied by severe critique and substantial limitation of the principles of free market with undistorted competition. Crisis cartels and similar otherwise restrictive practices often become not only tolerated but even encouraged by the regulators.This compromise is seen as an inevitable trade-off between competition and other legitimate societal goals, such as industrial growth, social stability, total welfare and sometimes even national security. On the other hand, each regulatory ‘turbulence’, which is caused by the revision of the role of competition within the markets, can be also seen as a fruitful time for introducing new elements to the competition policy itself and testing new theories of competition. Dialectical antitrust is one of these theories.This article explores the role of competition authorities in the period of economic crisis applying methodological apparatus of the theory of dialectical antitrust