How Economists Can Help Courts Design Competition Rules: An EU and US Perspective

This article describes the use of practical tests for assessing whether particular business practices should be found anticompetitive. The courts have implemented such tests in many areas of competition policy including the recoupment test used in the United States for assessing aggressive pricing and the exceptional circumstances test used in the European Union for considering refusals to supply intellectual property. Economists can help the courts devise, refine, and reform such tests which, to be useful, must be capable of being implemented with available evidence and must minimise the cost of making mistaken inferences concerning competitive effects.