Theories of harm and the effects-based approach in EU competition law

The first chapter in Part II ventures into EU competition law's theories of harm with the quest to determine to what extent a more economic approach to EU competition law presupposes, or even requires the showing of effects and how that relates to the definition of the relevant market. The chapter beings by describing theories of harm in the three main substantive areas of EU competition law (agreements, unilateral conduct, and mergers). In each of the substantive areas, an effort is made to provide economic rationales for the described practice. In this regard, an inquiry into the reasons why theories of harm have resulted in the sorting of behaviour in different categories is crucial. Further, the problems that have surfaced and the tension between efficiency, administrability, legal certainty, and the effects-based approach are explained. With the help of economic theory, the categories are rationalised as creations of a conscious effort to enhance the efficiency of EU competition law as a legal system. The chapter concludes by establishing the benchmark according to which WTO law is to be comparatively evaluated in chapter 7. The chapter shows how in EU competition law theories of harm have become significant following the adoption of a more economic, effects-based approach. It also shows how those theories of harm, a bit counter-intuitively, have developed to incorporate thinking in terms of categories, including categories that do not require the showing of effects, viz. the object box in Article 101(1) TFEU and per se abuses in Article 102 TFEU. The conclusion is that an efficient application of the effects-based approach does not require the showing of effects in every case of alleged infringements of Articles 101(1) and 102, but that the same is not true in merger control, predominantly because of the prospective nature of the inquiry.