This article is an opinion piece by current students or alumni of the College of Europe. The views expressed are those of the authors and do not necessarily reflect the opinions or positions of the College of Europe. Responsibility for the content lies solely with the authors.
By Giulia Galletti and Greta Lahouse
In this interview, Zita Vasas, Economist, Senior Vice President at Compass Lexecon’s London office, and Visiting Professor at the College of Europe, discusses the importance of economic analysis in Competition law, with a specific focus on behavioural economics and digital platforms.
Question one: In our Competition Society, most members are law students, though we also have economists. How crucial is rigorous economic analysis in shaping competition law, especially in digital markets, which are often non-price markets?
Answer: To quote from Professor Whish’s book: “Competition law is about the economic analysis of markets”. Rigorous economic analysis is indeed essential in most competition cases. Only where the harm a particular conduct leads to is so evident that competition law applies a per se or quasi per se prohibition, such as price-fixing, case-specific economic analysis is not needed. But even such prohibitions are underpinned by economic theory.
The need to rely on economic analysis applies equally to digital markets. The fact that many digital products are offered at zero prices does not mean that economics cannot help. Quite the contrary. While it is true that traditionally many tools economists use for competition analysis focus on price, economics is fundamentally about a study of individuals’ and firms’ choices and what outcomes such choices lead to. Economic thinking can help us understand, for instance, the reasons why a platform sets zero price to users on one side and a positive price to users on the other side. This understanding of business models and incentives can then inform the competitive assessment.
Question two: In a recent publication (1), you mention that some DMA provisions are designed to address issues highlighted by behavioural insights, such as consumers’ tendency to stick with default options, which can strengthen gatekeepers’ market position. At the same time, behavioural economics shows that consumers do not always act rationally or in a utility-maximising way. Given that the goal of European competition policy is to maximise consumer surplus, how can regulators determine what truly maximises consumer utility when observed behaviour may not reflect it?
Answer: This is a million-dollar question which highlights a number of tensions that the DMA and other regulations are grappling with. On the one hand, we want consumers to be able to choose from a variety of products, let’s say, browsers, search engines or app stores, given the benefits of competition. At the same time, identifying and accessing the product that best meets a particular consumer’s needs may impose disproportionate costs for the consumer. These benefits and costs need to be balanced carefully.
The answer also depends on how paternalistic policymakers are. Interventions on the demand side can be necessary as inert and inactive consumers do not impose sufficient constraints on incumbent firms who can then enjoy more market power and extract more rent from consumers than they would be able to with active and engaged consumers. However, increasing consumer engagement can be notoriously difficult and informational remedies and nudges tend to have minimal impact. Regulators are thus left with more intrusive interventions, which can lead to increased costs for all, including firms, consumers and the regulator itself, or to overprotecting consumers.
Question three: The DMA aims to shift European competition enforcement from ex post, case-by-case assessments to ex ante regulation of gatekeepers. From a behavioural and economic perspective, can such an ex ante approach effectively prevent harm, or do we still need ex post analysis to capture unexpected effects?
Answer: While ex ante regulation cannot really reverse the impact of past practices, and so the entrenched market power of the Big Tech is likely to remain in place for many existing products, it should hopefully prevent these firms from leveraging their power to new markets. We still need ex post competition law, as ex ante regulation does not (and should not) cover all potentially harmful practices. As such, the two tools are complements.
We also see signs of ex post competition investigations becoming more agile, for instance, with the application of interim measures that can quickly put an end to a practice that may lead to irreversible harm. If ex post competition law can pick up the pace of digital markets, the scope of ex ante regulation could be reduced.
Question four: In the Booking/eTraveli case, the Commission prohibited the acquisition – the first prohibition decision based on ecosystem concerns – while the CMA cleared the transaction. Do you see this new theory of harm as giving regulators a stronger preventive role, or does it signal a shift away from a traditional effects-based analysis?
Answer: The European Commission’s prohibition of the Booking/eTraveli case is highly criticised by economists. The Commission’s argument resembles an “efficiency offence”, that is, that Booking would offer such a great set of products to consumers that it would become difficult to compete with. While we have seen that digital ecosystems can accumulate enormous power in the hands of the operator of the main platform, it is also evidently clear that users have benefited hugely from being able to use seamlessly interconnected products. More research needs to be done to understand under what conditions a step towards creating an ecosystem leads to consumer harm. Without a solid theoretical underpinning, it may be hard to defend a prohibition like this one in front of the courts.
Question five: Are there aspects of digital platforms’ behaviour where you think behavioural insights could guide future competition policy, but regulators have not yet explored them?
Answer: My strong suspicion is that behavioural insights will be highly relevant to how we interact with AI and AI-powered products. For instance, AI chatbots may communicate in a way that strengthens confirmation bias – when we see something that is in line with our expectations, we are giving it a higher probability for it to be true than otherwise.
(1) Fletcher, A., & Vasas, Z. (2024). Implementing the DMA: the role of behavioural insights. Journal of European Competition Law & Practice, 15(7), 456-462.
Zita VASAS
Zita Vasas is a Senior Vice President at Compass Lexecon, based in London.
She has over fifteen years of experience as a competition economist, including working in the competition team of a sectoral regulator (the Financial Conduct Authority, UK) and at a national competition authority (Hungary). She has been involved in cases in a wide range of sectors (e.g., digital and tech markets, retail financial products, audiovisual media, FMCG, healthcare, telecommunications, maritime transport), policy areas (market investigations, abuse of dominance cases, mergers, state aid and policy advice) and jurisdictions (e.g., EU, UK, Australia, South Africa, Oman and India). Zita has been recognised as a Future Leader in the 2025 Lexology Index for Competition Economists.
Zita Vasas completed her PhD in 2022 on the role of consumer search in competition policy at the University of East Anglia. She holds an MSc in Competition and Market Regulation from the Barcelona School of Economics and an MSc in Economics from the Corvinus University of Budapest. While working at the FCA, she gained experience in applying behavioural economics and consumer policy. Her recent research interests concern the intersection of behavioural economics and digital platform regulation. She has published in the Behavioural Public Policy, the Journal of European Competition Law & Practice and the Oxford Review of Economic Policy. She is currently a Visiting Professor at the College of Europe in Bruges, where she teaches the LL.M. module on Economics of Competition Law.
Giulia GALLETTI
Giulia Galletti is an LL.M. candidate in European Legal Studies at the College of Europe. She holds a Master's degree in Law from the University of Bologna and an LL.M. from King’s College London, and has been admitted to the Italian Bar.
She previously trained at an international law firm and completed a Blue Book traineeship at the European Commission (DG COMP). Her research interests include Competition Law and Economics, Financial Services, and International Trade.
She currently serves as President of the Competition Society at the College of Europe.
Greta LAHOUSE
Greta Lahouse is an MSc candidate in European Economic Studies at the College of Europe in Bruges, where she focuses on competition economics and European economic governance. She holds a BSc and MSc in Economics and Management as well as a BA in Political Science from Leibniz University Hanover, where she pursued her degrees in parallel.
She worked as a research assistant at the Institute of Political Science and completed an internship at the German Federal Ministry for Economic Affairs and Energy, where she worked on European policy, particularly related to Franco-German relations.
She currently serves as a Board Member of the Competition Society at the College of Europe.
