The Real Economy and Competition Policy in Periods of Retrenchment

Competition policy works well when markets are given time to evolve and drive improved efficiency; but this takes time. However, under current turbulent times, the short-run survival actions may be insistently sought by policy-makers under the pressure of trade unions and the exit of failing firms may be perceived to be more costly for society. Actually, the immediate costs that existing businesses, employees and consumers have to incur may be up-front and visible, while the benefits of competition may be less visible. As a consequence, times of severe financial and economic crises bring about a severe questioning of market mechanisms with unfailing regularity and the stance of the competition policy against this backdrop. We shall therefore look in the current paper at the role of competition authorities in a time of severe economic and financial crisis and in particular, at how the crisis will impact the application of competition law. In the end, we will conclude in favour of the need to preserve competition policy as well in difficult times even if we admit that a certain flexibilisation in procedures (but not in rules) may be probably necessary.