EC Consumer Protection Law and EC Competition Law: How related are they? A Law and Economics Perspective
EC Consumer Protection Law and EC Competition Law are amongst the most important areas of law, having a deep regulatory impact on the functioning of markets. Their alignment, in terms of goals and approach to the regulation of markets, seems in principle very substantial: both share the benefit of consumers as their most relevant purpose and organizing principle.
However, when one looks deeper into the underlying economic issues that both areas of the Law are more apt at addressing, significant differences become apparent. Monopoly power is the crucial problem for Competition Law in general, and EC Competition Law is no exception to this. Consumer Protection Law however, is not – and should not be – concerned with market power as such, not even in its version of inequality of economic or bargaining power between producer and consumer. The relevant economic phenomenon that justifies in economic terms consumer protection legislation, both at National and European levels, is imperfect information in consumer markets. The focus on informational failures explains the kind of instruments and approaches most common in EC Consumer Law. The divergence in economic rationales, however, is not incompatible with the idea that, in certain circumstances, joint consideration both of competition issues and consumer protection factors appears necessary, but should not lead us to forget the main role of each branch of the Law.