Ordoliberalism and Balancing Competition Goals in the Development of the European Union

• Author: Conor Talbot
• Published date: 01 June 2016
• Date: 01 June 2016
• DOI: http://doi.org/10.1177/0003603X16641238

Article

Ordoliberalism and Balancing

Competition Goals in the

Development of the European

Union

Conor Talbot*

Abstract

This paper examines the aims behind the incorporation of competition rules into the European project

and studies how the development of the doctrine has been molded to the specific circumstances and

outlooks encountered in postwar Europe. It argues that the objectives of competition law in the EU go

beyond economic or legal standards that are applied in individual cases; rather, competition law and

policy have been calibrated to contribute to allowing the EU project to harness the benefits of an open

capitalist economy within the context of a democratic European society. The analysis aims to

demonstrate that while Ordoliberal thinking played a role in the development of European compe-

tition law and policy, there were several other social, political, and macroeconomic influences at play as

well. As such, the strain that competition policy has come under is a result of attempts to use com-

petition policy to balance several public policy objectives.

Keywords

ordoliberalism, competition policy, public law, European Union

1. Introduction

National political and policy-making systems are alive and well in the European Union (EU), but the

complementary political system centered on Brussels means that some major questions of how to

balance and implement political ideals are made at a central EU level. One such question is how to

apply a specifically European version of capitalism to an area as diverse as the EU in a democratically

legitimate and socially acceptable way. This paper argues that competition policy constitutes one of

the most important tools that the EU has used to balance the economic, social, and political goals of the

European project. Given that national governments, parliaments, courts, and other bodies participate in

the EU system, alongside the EU institutions such as the European Commission (Commission) and the

European Parliament, competition policy in the EU has developed in different directions and at

*European University Institute, Firenze, Italy

Corresponding Author:

Conor Talbot, European University Institute, Via Boccaccio 121, I-50133 Firenze, Italy.

Email: conor.talbot@eui.eu

The Antitrust Bulletin

2016, Vol. 61(2) 264-289

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DOI: 10.1177/0003603X16641238

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different speeds since the European integration project emerged following World War II. This paper

examines the ever-evolving aims behind the incorporation of competition rules into the European

project and studies how the development of the doctrine has been molded to the specific circumstances

and outlooks encountered in postwar Europe. Before embarking on an examination of the internal

balancing undertaken by the European Court of Justice (ECJ) and the Commission between the

sometimes conflicting goals within competition policy, the doctrine itself must be placed in its wider

European context in order to understand its role as part of the greater integration project.

In contrast to thetotalitarianism that characterized much of Europe until the endof World War II, the

EU project sees itself as pluralistic and open, as a place where individuals and corporations are free to

pursue their ambitions. This vision of a pluralistic society and the horror of concentrated power provide

the backdrop for the development of competition policy within the EU framework in the 1950s and

1960s. Mainstream social scientists and legal scholarswere inspired by the image of a unified European

marketplacefor ideas, goods and services, capital, and politicaldecisions. However, a recurring problem

in this vision is the undemocratic persistenceof enormous disparities in power.The collision between the

elements in the evolving ideology, including competition policy, took place through debates in the

domains of politics and economics, with public interest groups, corporations, legislators, and judges all

participating. This contribution investigates these collisions and the effect they had on the theories and

policies that emerged as the EU searched for a compass to navigate between the different ethics and

outlooks that fed into the European project’s vision of marketplace pluralism. The investigation con-

ducted here leadsto a conclusion that competition law in the EU context plays a role akinto a public law

function, whereby it representsa tool for balancing the effects ofthe different strands of development in

the European project. As such, it is argued here that the objectives of competition law in the EU go

beyond economic or legal standards that are applied in individual cases; rather, competition law and

policy have been calibrated to contribute to allowing the EU project to harness the benefits of an open

capitalist economy within the context of a democratic European society.

The aims of any law or policy initiative are closely linked to the specific and general intentions of

the drafters, and both have a direct impact on the choice of standards used to apply it in practice. In the

case of competition law, for instance, if the objectives of the European Union’s competition rules were

accepted as being aligned with purely ‘‘Ordoliberal’’ teachings, this would exclude the application of

‘‘welfarist’’ efficiency-based standards as well as having fundamental impacts on the legitimate use of

competition law in an internal and external context.

1

The analysis in this paper aims to demonstrate

that while, undoubtedly, Ordoliberal thinking played a role in the development of European compe-

tition law and policy, there were several other social, political, and macroeconomic influences at play

as well. The fact that competition policy was able to absorb diverse influences has been especially

important in an EU context because of the multitude of goals that the grand European project has had

over the years. It is argued here that competition policy has been called upon to fill gaps and reach

places that Brussels’ other tools cannot, even if ultimately this has been to the detriment of the internal

coherence of competition doctrine in the EU. Aside from the annual economic benefits to the EU from

having a competition regime, the EU has benefitted in a social and democratic sense from prohibiting

the unchecked exercise of market power. Indirect social benefits of the EU’s antitrust regime come

about because this limitation on the exercise of market power prevents the excesses of capitalism

negatively impacting on the democratic societal structures of the EU.

For each individual instance of competition law being applied at the EU level we can point to

several different objectives at play. Oftentimes they are internally coherent—a short-term tactic

employed to reach a long-term strategic outcome, for example—but not always. It is when there is

1. Pinar Akman, Searching for the Long-Lost Soul of Article 82 EC (2007), https://www.uea.ac.uk/polopoly_fs/

1.104585!ccp07-5.pdf.

Talbot 265