By Chris Pike & Gabriele Carovano
Competition law is under attack. On the one hand, there are calls for enforcement to re-examine the balance of risks, and prioritize delivery of fewer “false negatives.” On the other hand, there are calls to improve accuracy by adopting a more economic effects-based approach. In practice, this approach has no doubt reduced the number of false positives. However, for this to translate into increased accuracy, it is crucial that the number of false negatives does not significantly increase. For example, if an effects-based approach discourages agencies from taking risky cases, then accuracy may not improve, and enforcement will skew towards prioritizing the protection of efficiencies. This paper argues that the calls for fewer false negatives and the reduction in false positives are not incompatible since this is not a zero-sum game, and uses the lens of recent EU decision practice on parity clauses and loyalty rebates to suggest that they can be reconciled.
