Out-of-Market Efficiencies in Competition Enforcement

‌

Read the background note

6 December 2023 Paris

Out-of-market efficiencies affect consumers or other economic agents in different markets from those in which anticompetitive effects are alleged to occur in the context of a merger, an anticompetitive conduct, or an agreement.

It is traditionally considered that out of market efficiencies should not be recognised in mergers and in cases of anticompetitive conduct. There is, however, a growing debate about the merits of recognising these efficiencies in competition cases. The increasing focus of competition authorities and of the broader competition policy community on sustainability considerations and on multi-sided markets contributes to this renewed interest. The lack of recognition of out of market efficiencies is also seen by some analysts as not reflecting real markets, where businesses do not behave on the basis of strict demarcations between relevant markets, and is sometimes seen to be incapable of capturing the reality of multi-sided markets. At the same time, the link between out of market efficiencies and the relevant market under investigation may be harder to establish. For this reason, broadening the definition of efficiencies could raise issues of administrability and legal certainty, as the assessment and the outcome of a case could become more subjective.

In December 2023, the OECD held a roundtable on out-of-market efficiencies in competition enforcement to discuss the arguments in favour and against expanding the notion of relevant efficiencies to out of market efficiencies.

Key takeaways from the discussion

The approaches to out of market efficiencies and how jurisdictions applying some form of total welfare standard tend to be more open to out of market efficiencies.
Including out of market efficiencies raises procedural and institutional issues, such as whether competition authorities are well placed to balance between the welfare of different consumer groups.
Distinguishing between the treatment of in market and out of market efficiencies attaches importance to market definition, against the backdrop of a trend to place less weight to defining markets.
Sustainability agreements can create benefits that go beyond the consumers that are directly affected by the agreement, raising questions about the treatment of such benefits.

This page contains all related documentation.

See the full list of best practice roundtables on competition.

Speakers

Daniel Crane Bio
Richard W. Pogue Professor of Law, University of Michigan

John Davies Bio
Member, Competition Appeal Tribunal UK

Nancy Rose Bio
Head of the Department of Economics and Charles P. Kindleberger Professor of Applied Economics, Massachusetts Institute of Technology (MIT)

Nicole Rosenboom Bio
Principal, Oxera Consulting LLP

Documents

OECD Background Note | Note de référence de l'OCDE

Detailed Summary of the discussion EN | FR

Executive Summary with key findings EN | FR

Contributions from delegations