THE CHALLENGES OF ECONOMIC PROOF IN A DECENTRALIZED AND PRIVATIZED EUROPEAN COMPETITION POLICY SYSTEM: LESSONS FROM THE AMERICAN EXPERIENCE

Since the announcement in late 2002 of the Modernization Plan,and continuing in 2005 with the release of the Green Paper ondamages actions, the European Commission has been committedto a significant restructuring of the EU's approach to enforcingcompetition laws. Under the revised system as envisioned bythe Commission, national competition authorities and privateparties will assume a far greater role in supplementing thework of the Commission, which for 50 years has been the predominantcompetition policy enforcer in Europe. The goal is not onlyto produce a system of shared enforcement authority, but topromote the continued evolution in Europe of a "culture of competition,"while avoiding the creation of a "culture of litigation." Ifnational competition authorities and private parties acceptthis invitation, however, they are likely to face the same kindsof demands for substantial economic evidence from their nationalcourts that the EC has faced from the Court of First Instanceand the European Court of Justice in some of its most complexand challenging recent cases. This paper asks whether nationallevel enforcers, public and private, will have the proceduraland evidentiary tools necessary to respond to demands for sucheconomic proof. Drawing on the Commission's recent experiences,as well as lessons from the U.S. experience, it asks whetherthe Green Paper's treatment of economic evidence is adequategiven the importance that economic proof plays today in competitionlaw cases. It then urges the Commission to devote additionalattention to identifying and advocating reforms that will moreactively facilitate the disclosure, development, and presentationof economic evidence. This paper particularly questions theGreen Paper's preference for the use of court-appointed expertsin lieu of party-secured expert witnesses. It argues that partyand court-appointed experts can perform very different functionsin competition law cases and should not be viewed as substitutes.Moreover, it suggests that the Green Paper may significantlyunderestimate the degree to which party-secured expert economicwitnesses will be necessary if national level enforcers—publicand private—are to be adequately equipped to meet theburdens of proof they will face. If national enforcers systematicallyfind that they lack the procedural tools necessary to developthe economic evidence they need to meet those burdens, theywill reduce or abandon their efforts to initiate competitionlaw actions and it will be less likely that the promise of decentralizationand privatization can be realized.