Towards a Market-Based Approach: The Privatization and Micro-Economization of EU Antritrust Law Enforcement

Contains fulltext : 137340.pdf (publisher's version ) (Open Access)The paper addresses the interface of the recent antitrust reform of the European Union (EU) and the ongoing transformation of the power relations between shareholders and management as one of the key aspects of corporate governance. From the mid-1990s onwards, the EU competition regime has undergone a series of reforms. The 2004 antitrust reform, generally referred to as the ‘Modernization’, constitutes the focal point of analysis. It fundamentally changes the way in which anticompetitive conduct such as cartels and other restrictive business practices are prosecuted in the EU. With the replacement of Regulation 17 with Regulation 1/2003, the long-standing centralized public ex ante market control model was abolished and a decentralized ex post private enforcement regime became prevalent. Together with the enhanced emphasis on neo-classical micro-economic theories and econometric modeling in the assessment of anticompetitive behavior, the paper argues that the new regime introduces a more market-based approach of antitrust enforcement, which in addition also heralds a more shareholder value orientated market economy. Under the new regime, the proactivity of market actors to litigate observed anti-competitive behaviour before the EU or national courts increasingly determines whether or not EU antitrust laws are enforced. The paper demonstrates that the enhanced possibilities to litigate in antitrust matters open up a windows of opportunity for shareholders to increase their voice options vis-à-vis the management and to redistribute economic power into their favour.38 p