June 2010

EU Competition Law and Economics by Damien Geradin, Anne Layne-Farrar, and Nicolas Petit, PhD The following is the first chapter of an upcoming book, EU Competition Law and Economics, written by Damien Geradin, a partner in Howrey’s Brussels office; Anne Layne-Farrar, director in the Chicago office of LECG; and Nicolas Petit, a professor at the Université of Liège Law School. The book is expected to be published in early 2011 by Oxford University Press. Reprinted with permission of the publisher and authors. The Ubiquity of EU Competition Law Only a few areas of law, and in particular of European Union (“EU”) law, garner as much press exposure as EU competition law: “Europe Fines Intel $1.45 Billion in Antitrust Case”;1 “European Commission blocks Ryanair’s bid for Aer Lingus”;2 “Brussels slaps record fine on glass cartel”;3 “European Banks get EU Warning.”4 In fact, major business newspapers almost daily report on EU competition authorities’ interventions in the market. Press agencies now boast dozens of specialized competition journalists and offer competition-related briefings on a real-time basis. European Integration Goals: Recent viewpoint, the Commission considers that sectors likely to haven restrictions Case Law Examples to interstate trade constitute priority enRationale – The effectiveness of the forcement targets.7 Many investigations Treaty rules prohibiting public obstacles have for instance been launched in the to trade between member states would car distribution and pharmaceutical be seriously undermined if firms could sectors, where, despite significant price reinstate private barriers to trade, for exdifferentials among member states, inample through horizontal market sharterstate trade has remained historically ing agreements. limited.8 Case law – To obviate risks of private partitioning of member states’ markets, the European courts very early on considered that market integration was a core objective of the EU competition rules.