Behavioural economics in EU competition law: Article 102 TFEU, the Digital Markets Act, and informed assumptions of irrationality

Abstract This article analyses how European Union (EU) competition law uses insights from behavioural economics to determine whether business conduct is illegal. Various Article 102 TFEU decisions against Microsoft, Google, Amazon, and Apple have reflected behavioural findings on non-rational decision-making, as do the obligations imposed on gatekeepers by the Digital Markets Act (DMA). Regardless of whether one accepts the underpinning analysis, behavioural economics is informing EU competition law. The issue is how it should do so. Both Article 102 enforcement and the DMA incorporate behavioural economics in different ways, neither of which is simply a corollary of being ‘ex post antitrust’ or ‘ex ante regulation’. It is argued that the certainty of Article 102 enforcement would benefit from it replicating the DMA’s informed assumptions of irrationality. While the Commission’s current approach of context-specific factual analysis faithfully captures the contingency of biases in behavioural economics and facilitates accurate findings of illegality, it has resulted in uncertainty as to when conduct is prohibited by Article 102. The DMA’s assumptions of irrationality admittedly distort behavioural economics and will lead to some inaccurate outcomes. Nevertheless, if suitably informed by economic research and enforcement experience, assumptions of irrationality offer the opportunity for Article 102 decisions to reflect behavioural insights without abandoning legal certainty.