The Wealth Effects of the Abuse of Dominance Enforcement

The article investigates the welfare impacts of abuse of dominance enforcement proxied by the stock price evaluations. The European Commission reformed the competition policy at the turn of the new century; however, the reform efforts were more reserved and cautious regarding Article 102 TFEU than in other competition law subfields. The empirical research assesses whether the Commission and the EU Courts’ decisions affect the wealth of sanctioned undertakings for the 1990–2014 period by conducting an event study. Only Commission decisions have substantial and statistically significant negative consequences for the market value of infringers. Furthermore, the enforcement effectiveness is assessed by observing the effects of imposed remedies, and the 2004 breakpoint robustly estimates the reforms. The fines do not seem to be sufficiently negatively effective; thus, the results suggest a weaker deterrent effect than could be predicted from nominally high fines, and the more recent cases reflect an even weaker deterrent effect.