The Role of Demand Side Remedies in Resolving Competition Concerns

When competition is not working effectively in a market, the typical reaction of many competition authorities is to reach for their established competition law tools, on the assumption that the issue must be on the supply side of the market, either in the form of anti-competitive agreements or the abuse of a dominant position. Far less focus is typically given to the crucial role played by the demand side of the market.1 In this chapter, we argue that this can be a mistake. We explain that effective competition requires that both sides of the market function well. Thus, focussing solely on supply side issues may be insufficient and demand side remedies can also play a key role in driving effective competition (section §2.02). We then discuss the various blockages that consumers can face in making effective decisions, with particular reference to behavioural biases (section §2.03), before identifying a variety of types of demand side remedy (section §2.04). Demand side concerns have typically been addressed through market studies, regulatory actions, consumer law or wider legislation. However, they are also poten- tially relevant to more standard (merger and antitrust) competition law. We explain how biases on the demand side can affect the potential for anticompetitive behaviour on the supply side and suggest that demand side remedies could play a greater role in cases under merger and antitrust law (section §2.05). We then highlight a number of key considerations to be borne in mind when intervening on the demand side of the market (section §2.06). Section §2.07 concludes with a brief remark about the potential for demand side concerns to generate a need for supply side remedies