Introduction

Is the main objective of competition policy the maintenance of competition per se or the promotion of economic efficiency? These two goals do not necessarily have the same basis or the same implications. The goal of maintaining competition per se can be justified morally, politically and legally by the wish to protect individual freedom and rights, and by limiting the power of agents. This faith in the democratic virtues of interacting competitive forces is grounded in a political philosophy which sees regulatory mechanisms resulting from impersonal market forces as a guarantee against the arbitrariness of authority, whether public or private. In this sense, competition is a right which warrants protection. Economically, competition is not considered as an end in itself but rather as a mechanism for allocating resources which in many, if not all cases, promotes economic efficiency. The question the economist has then to answer is whether or not, depending on the circumstances, competition promotes the reduction of costs, the selection of the most efficient businesses, the welfare of consumers, the creation of new products, the entry of new enterprises, the development of technological progress and innovation and so on.

To what extent do these two goals of competition policy overlap? Before setting out our framework to formulate an answer to this question, let us introduce the basic issues.