Popular Kohn-Sham density functionals strongly overestimate many-body interactions in van der Waals systems

We find spuriously large repulsive many-body contributions to binding energies of rare gas systems for the first three rungs of ``Jacob's Ladder'' within Kohn-Sham density functional theory. While the description of van der Waals dimers is consistently improved by the pairwise London C₆/R⁶ correction, inclusion of a corresponding three-body Axilrod-Teller C₉/R⁹ term only increases the repulsive error. Our conclusions based on extensive solid state and molecular electronic structure calculations are particularly relevant for condensed phase van der Waals systems.