Restrictions “by object” in the European Union
In this article we review the concept and application of restrictions “by object” in the European Union. Competition Authorities often categorize practices as restrictions “by object” where the harm to competition is not obvious. Although this partly responds to resource and time limitations to conduct a proper economic analysis, at least certain basic economic principles should be followed, in order to minimize the risk of condemning conducts that could even generate pro-competitive effects. Economic theory does not offer a consolidated analytical framework applicable to every case. However, it can play an important role in determining whether the economic context and/or the market characteristics may be relevant. As a general principle, if the practice in question takes place in a market where “market failures” exist (particularly externalities, asymmetric information or economies of scale) this may well have been implemented to correct such failures. Thus, restrictions “by object” should be limited only to explicit agreements with the clear intent to set anticompetitive prices/outputs in sectors with no market failures or other indirect/ secondary effects.