Unilateral Practices and the Dominant Firm: The European Union and the United States

Competition Policy and Antitrust

Article Snapshot


Richard Epstein


In The Legal Foundations of Free Markets, edited by S. Copp. IEA, 2008


This paper compares the competition policy of the United States and the European Union.

Policy Relevance

Competition policy in the U.S. gives businesses more of the benefit of the doubt. In Europe, the law is unclear. Authorities therefore have more discretion, and might target firms for protectionist reasons.

Main Points

  • In the United States, the Sherman Act says little about dominant firms, but courts have developed some limited case law.
    •  Focus on a firm’s motives is unwise, because motives do not necessarily harm competition or consumers.
    • The fact that activity in this area has not expanded is beneficial.
    • Firms can lower prices without facing false charges of predatory pricing.


  • In the Europe Union a dominant firm’s acts are assessed by treaty provisions concerning competition (“Article 82”).
    • Article 82 treats dominant firms differently from others, listing prohibited acts, some of which might benefit consumers.


  • “Unfair” conduct is barred; this unclear term invites manipulation by a firm’s rivals. Consumer welfare is a better standard.


  • Firms that drop prices cannot predict their liability for predatory pricing.


  • The European Commission required Microsoft to share intellectual property with rivals, deterring innovation; it is unlikely a European firm would have faced such a penalty.

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