As Efficient Competitor Test: An Overview of EU and National Case Law

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Determining the appropriate standards to apply in Article 102 cases involving allegedly exclusionary conduct by a dominant firm continues to provide substantial room for debate between and within the legal and economic communities. However, the nature of the debate has progressed substantially since the European Commission adopted an approach to assessing whether a dominant firm’s conduct amounts to anti-competitive foreclosure that is more closely aligned with the economic literature by publishing its Priority Guidance Paper (“PGP”). In this forward, I briefly review aspects of the case-law and outline the important contribution the PGP has made to the recent case-law. In doing so I have the benefit of a large prior literature including in particular Nazzini (2012). In short, the PGP has succeeded to a significant degree in providing a coherent framework of case-law connected, to at least a greater extent than evident in the earlier case-law, to the framework provided by economists for analysing exclusionary conduct by dominant firms. The case-law has also recognised the As Eficient Competitor (“AEC”) standard’s limitations. In the second part of the paper, I describe some of the limits to the AEC framework and discuss in particular the relationship between the AEC test and whether the conduct caused consumer harm (although the important topics of objective necessity and eficiencies are largely left for another occasion). I close by noting that the normative question of the role that the AEC test should play in future cases seems likely to be a prominent element of the debate in cases involving the digital economy. The reason is that agencies worry incumbents have benefits from scale derived from access to data that entrants may not be able to match.