The recent EU Google decisions may represent a high-water mark for the use of behavioral economics in EU antitrust to date, but what do they imply for competition policy in the future? Do such cases represent the outer extremes of how far behavioral thinking can and should be taken? Or do they represent baby steps towards the more comprehensive incorporation of behavioral economics into competition policy thinking? This article highlights the widespread influence of behavioral economics across other areas of policy and discusses a number of directions in which competition policy could potentially be transformed. Noting the existence of an extensive literature in behavioral antitrust, it focuses on a number of aspects which have been given less attention to date.
The recent EU Google decisions made waves around the world. In large part, this was because they involved a huge and innovative digital economy platform and were the highest fines yet imposed by the EU. However, the decisions are also notable for their reliance on key insights from behavioral economics.
Behavioral economics may not have been mentioned explicitly in the Google Shopping decision, but the Commission’s case hangs on the fact that the “more favorable positioning” of results on the Google search page leads to increased traffic and click-throughs. As such, the case effectively relies on a behavioral tendency called saliency b!--more-->…