The Constitutional Invalidity of the New Competition Tool ... Even in Geopolitical Times

This article discusses Mario Draghi's suggestion to battle increasingly uncompetitive markets in the EU by way of a so-called New Competition Tool (NCT). The NCT is a flexible tool that would extend the standard competition regime by allowing the Commission to investigate whether certain market features would cause markets to deliver less competitive outcomes than in the counterfactual without any such features and, if so, impose remedies without having to prove anticompetitive firm conduct. This article posits that a possible European NCT would be constitutionally invalid because not democratically legitimate. To protect legitimacy, the EU's principle of parliamentary primacy makes a hard cut between legislative, political rulemaking and administrative, apolitical rulemaking. Based thereupon, the correction of inefficient market outcomes is organized differently for regulatory or exchange inefficiencies. Regulatory inefficiencies fall within the legislative realm because they result from ill-defined market regulation and therefore require political decision-making to be corrected. Exchange inefficiencies fall within the competition enforcement realm because they result from anticompetitive firm conduct which does not need political decision-making to be corrected. Leaving the exchange efficiency realm, the NCT would politicize antitrust and, in so doing, fail the democratic legitimacy test.