From Fairness to Resilience: Rethinking Unfair Pricing and Digital Market Abuses in a Crisis-Driven Competition Paradigm
By Behrang Kianzad, LLM /PhD, Institute for Global Political Studies, Malmö University & Founder, European Researcher Network on Fairness in Digital Markets and AI
Introduction:
Fairness was long treated as an unwelcome guest in the house of competition law—too subjective, too moral, too “un-economic.” Yet from the Code of Hammurabi to the Digital Markets Act (DMA), societies have always imposed limits on abuse in times of crisis. As COVID-19, algorithmic power, and digital gatekeeping collide, the notion of “fairness” is returning, not as a sentimental add-on but as a structural principle of resilience. This piece argues that re-embedding fairness into competition policy marks not nostalgia but necessity: a recalibration of law to match an age of systemic shocks.
I. The Return of the F-Word & The Crisis of Efficiency
For decades, antitrust lawyers were cautioned against uttering the “F-word.” (1: Sandra Marco Colino, ‘The Antitrust F Word: Fairness Considerations in Competition Law’ [2019] Journal of Business Law 329.)
Fairness, we were told, belonged to moral philosophy, not market analysis. Yet fairness is older than markets themselves. The Code of Hammurabi fixed maximum prices nearly four millennia ago. Medieval canonists like Thomas Aquinas spoke of the iustum pretium—a just price measured not by utility but by justice. Modern Europe inherited this tradition through Article 102(a) TFEU, which still forbids dominant firms from imposing “unfair purchase or selling prices.”
Then came the Chicago School, proclaiming the gospel of efficiency. Antitrust, said Robert Bork in The Antitrust Paradox (1978), should pursue “consumer welfare” and little else. High prices were signals, not sins. The market would self-correct; regulation would only blunder and lead to less ”efficient” outcomes and make everyone worse off.
This reductionist creed dominated competition law and policy for half a century, until the crises of our own era began to expose its cracks. One could argue that the Efficiency-oriented (also called Total Welfare instead of true Consumer Welfare Standard approach) already at inception was plagued by internal fallacies, pointed out by e.g. Dworkin and Kronman in debate against Posner.
COVID-19 nevertheless presented us with an economic Rorschach test. When hand sanitizer hit €20 a bottle, neoclassical theorists saw “price signals”, while most citizens saw naked exploitation. In behavioural economics, the Ultimatum Gameshows people routinely reject unfair deals even at personal cost; utility is not the only currency. The pandemic thus revealed what experimentalists from Kahneman to Fehr & Schmidt have long shown: fairness is intrinsic, not ornamental, and not able to be discounted as an ”externality” concerning transactions as people routinely forego utility maximisation in order to punish unfair behaviours.
The assumption of the perfectly informed, utility-maximising Homo oeconomicus never fit reality, and fits it even less in algorithmic markets where power is concentrated in digital “gatekeepers.” Efficiency, detached from equity, becomes brittle and does not have the same universal force as does fairness seen as normative value and concept. As Joseph Stiglitzwarned, antitrust policy built solely on efficiency “has been narrowed under the influence of ideas long discredited within economics itself”.
Further, as we all seemingly become Keynesian and even Kantian during crisis such as COVID-19 pandemic, including antagonists such as Milton Friedman, (2: Milton Friedman, “We are All Keynesians now”, Time Magazine, December 31, 1965) such crisis might be used as a proxy towards insights regarding whether the Pareto / Kaldor-Hicks efficiency criterion, the cherished Wealth maximisation standard and the strict division between equity and efficiency in Antitrust law and policy stand closer scrutiny.
The recent decades of economic research on both macro and micro level by way of behavioural, experimental, Neuro-economics and empirical industrial economics have thoroughly challenged the normative foundations upon which the efficiency-oriented approach traditionally has relied upon.
People are not rational, care less about utility than punishing perceived “unfair behaviours”, and neither firms nor people display the cherished utility and wealth maximisation tendency over other concerns such as equity, sustainability, and fairness in pricing.
This matter becomes yet more complex concerning price gouging and excessive pricing during a crisis such as COVID-19 pandemic. (3: For an in-depth study, see: Behrang Kianzad, ‘Excessive Pricing during the COVID-19 Crisis in the EU: An Empirical Inquiry’ (2021) Concurrences.) Nevertheless, such dynamics is not caught by the strict neoclassical and marginalist analysis, which is partly due to a circular view of what constitutes price, value and profit, as most ”mainstream” approaches in economics equate price with the economic value, in line with marginalist and wellfarist lines of thought. This endeavour leads to a logical fallacy, where no prices ever can be set above economic value, thereby nullifying the legal-economic approach to the matter of e.g. ”excessive” or ”unfair” pricing.
The United Brands test first limb only categorizes the excess between costs and prices. There is no abuse in and of itself by discovering an undue “excess”, but it merely is an indication elevating the second limb, “unfairness”, of the profit and mark-up imposed, which forms the “abuse”.
The “economic policy” which underlies Article 102 TFEU is firstly not monolithic, and secondly at times manifestly different than what has been alluded to in much of the doctrine, as Article 102a TFEU is not a neoclassical, marginalist and welfarist construct, hardly even an ordo-liberal ditto, but looking at its legal roots, and the economic reasoning underpinning the legal rule in the first place has to do with undue wealth transfer in and of itself.
For decades, the prevailing competition-law paradigm – especially in U.S. antitrust – has been dominated by neoclassical economics and a single-minded focus on efficiency and the so-called consumer welfare in Borkian parlance, which is indeed a total welfare standard and not the consumer welfare standard in European competition law tradition. (4: Robert Pitofsky, How the Chicago School Overshot the Mark : The Efect of Conservative Economic Analysis on U. S. Antitrust; See also Louis Kaplow and Steven Shavell, ‘Fairness versus Welfare’ (2001)
Price theory in the Chicago School tradition holds that markets are self-correcting and that interventions against high prices will chill investment and distort market signals. (5: David S Evans and A Jorge Padilla, ‘Excessive Prices: Using Economics to Define Administrable Legal Rules’ Fairness, in this view, is often dismissed as a subjective or extraneous notion, outside the purview of antitrust enforcement, where pursuit of ”fairness” would lead to a decrease in ”welfare”. (6: Frédéric Jenny, ‘Abuse of Dominance by Firms Charging Excessive or Unfair Prices: An Assessment)
This tension is nowhere more prevalent than the case of prohibition of undue wealth transfer as an object for Antitrust law and policy. (7: Robert H Lande, ‘Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged’). Why should the Sovereign intervene in functioning markets by attempting to control prices, when markets have an inherent ability to self-correct, and where high prices are signals to entry, thus ensuring lower prices and an efficient allocation of resources, as the main argument against excessive pricing and price gouging enforcement goes. (8: Behrang Kianzad, Towards Fair Pricing of Medicines?
Lessons from the European Commission’s Aspen Decision)
Adam Smith, the founding father of modern political economy, on his part remarked: “In ancient times too it was usual to attempt to regulate the profits of merchants …. it may perhaps be proper [where monopoly exists] …. But where there is none, the competition will regulate it much better than any assize.” (9: Adam Smith, “The Wealth of Nations”, 1776 bk. 1, cl. 10; cited in Watkins, “The Law and Profits“).
The neoclassical forefathers such as Walras, Jevons and Menger, and later Arrow and Debreu, (10: Kenneth Arrow and Gerard Debreu, “Existence of equilibrium for a competitive economy”) all pre-supposed and developed different views on competition as part of the general theory on how markets function, placing great emphasis on this neutral arbiter.
The distinction between price, value and profit, although made already some 150 years ago, has simply been forlorn in the ever more mathematical approach to economics, where exchange value has come to be the end-all definition of value, although the gist of human writings on value rather contemplate on “intrinsic value” and how to define this value more narrowly.
Fairness in pricing is such an “intrinsic value”, a value in itself, to use Kantian parlance, which cannot be substituted by any increase in utility. This is underscored by the manifest human preferences for fairness in pricing which people hold higher than any increase in utility, as evidenced from e.g. Ultimatum Game experiments where fairness can be modelled as both an inherent as well as an evolutionary concept (11: M. A. Nowak, “Fairness Versus Reason in the Ultimatum Game”).
The present post thus argues that neither Pareto nor Kaldor-Hicks efficiency criterion can bring about true ‘consumer welfare’, and firms do have to take fairness in pricing considerations into account as a constraint on profit seeking, in turn within the boundaries set by the Sovereign e.g. by design of Antitrust laws (12: see further Behrang Kianzad, “beyond efficiency versus Justice – Reconciling Law and Economics Approaches to Fairness).
Even Karl Marx pre-supposed existence of competition as a “coercive force” and the main regulator of the process of circulation, although approaching it from a theory of labour and capital as opposing forces. (13: Giulio Palermo, “Post-Walrasian Economics: A Marxist Critique”).
The concepts of perfect competition on the one hand and monopoly on the other, resting on neoclassical economics, are nevertheless essential for the mainstream understanding of the intricacies of competition law and antitrust, which ultimately aims to protect competition and hence directly or indirectly increase societal wealth.
But we do not longer live in the days of Adam Smith, Karl Marx or Walras and Jevons, why we today have a far more superior and sophisticated understandings of the workings of competition, both as a process and as an end-state, which forces us to integrate those insights into law and policy of what competition law should be.
II. To Intervene or Not to Intervene
The old debate of when and how to intervene in workings of the markets and firms still divides economists. Non-interventionists argue that e.g. excessive prices attract entry and innovation; the market, left alone, will self-correct why they caution against application of the law on excessive and unfair pricing. Interventionists in turn reply that this logic collapses under monopoly or crisis conditions, but also in face of the legal-economic roots of the prohibition against unfair pricing, when entry barriers, inelastic demand, or public emergencies make “self-correction” a myth, and when it would be rather strange to prohibit against indirect abuses while giving a free pass to direct exploitative abuses by dominant firms.
Historically, societies have not waited for the invisible hand to heal visible harm. From Diocletian’s Edict on Maximum Prices (301 AD) to Robespierre’s “Maximum Laws,” states have intervened to prevent exploitation. Aristotle himself framed exchange as equitable when each party receives “neither more nor less than what belongs to them.” The same moral intuition underlies modern bans on excessive pricing, but also recent regulations on digital and AI markets, all elevating ”equitable exchange”.
Yet neoclassical models obscure this lineage by collapsing value, price, and profit into a single loop of market equilibrium. If profit simply equals what the market will bear, or what the buyers supposedly are willing to pay without any care for context, no profit can ever be considered“excessive”, also owning to the fact that economic value is equated with price. But when pandemic mark-ups hit 500%, as in South Africa’s Babelegi case (Competition Tribunal 2020), the absurdity of that premise becomes clear.
III. Fairness vs. Efficiency—False Dichotomy
Economic analysis often pits fairness against efficiency, as if justice were a luxury good. In truth, they are complements. As Klaus Mathis notes, justice holds “immanent value” that cannot be offset by marginal gains in welfare. Even the Second Welfare Theorem, long invoked to separate equity from efficiency, fails under real-world frictions. Stiglitz again: “You cannot neatly separate equity from efficiency.”
Legal theorists from Guido Calabresi to Ernst-Joachim Mestmäcker warned that value-free economics is never value-free. The supposed neutrality of cost-benefit analysis masks moral choices about whose welfare counts. As Mark Blaug put it, efficiency “is necessarily value-laden.” Fairness is therefore not a sentimental add-on but the connective tissue between market legitimacy and social stability.
IV. Crisis as Mirror: COVID-19 and the Limits of Orthodoxy
Three jurisdictions illustrate the tension between theory and reality which become yet more evident during a crisis such as COVID-19 pandemic. (14: Kianzad, ‘Excessive Pricing during the COVID-19 Crisis in the EU: An Empirical Inquiry’)
European Union.
Article 102(a) TFEU explicitly bans unfair pricing, reaffirmed in United Brands v Commission (1978). Yet enforcement has waxed and waned. During COVID-19, the European Competition Network warned against exploitation but mostly relied on price caps and consumer protection tools rather than antitrust cases. France capped sanitizer prices; Malta did the same for masks. Critics saw missed opportunity: the legal basis existed, but the Chicagoan allergy to price control persisted.
United States.
Here, high prices are almost sacrosanct. The Sherman Act and Trinko (540 U.S. 398 (2004)) make no room for exploitative abuse. Yet faced with pandemic gouging, even laissez-faire America reached for emergency tools. Over thirty states activated price-gouging laws, typically banning increases above 10% of pre-crisis levels. The Defense Production Act was invoked to criminalise hoarding of PPE. Federal prosecutors, armed with wartime statutes, achieved what antitrust refused to: enforcement in the name of fairness.
South Africa.
A rare jurisdiction that enforced competition law directly during the pandemic, South Africa fast-tracked excessive pricing cases like Babelegi and Dis-Chem Pharmacies (2020). Both firms raised mask prices several-fold without cost justification. The Competition Tribunal held that exploiting consumer desperation violates the Competition Act’s prohibition on “excessive pricing.” The rulings came within months—proof that fairness can be enforced efficiently when treated as principle, not afterthought.
Together, these episodes show that markets under stress do not heal themselves. Resilience—the capacity of markets to absorb shocks without social breakdown—depends on fairness norms. When profiteering erodes trust, efficiency collapses alongside legitimacy.
V. The Digital Turn: Fairness Re-coded
The pandemic was a stress test; the digital economy is a paradigm shift. The Digital Markets Act (DMA) resurrects fairness as a legal principle for the platform age. Its goal is to ensure “fair and contestable” markets by constraining gatekeepers—firms like Google, Apple, or Meta—that act as private regulators of digital ecosystems.
Where Article 102 requires proof of dominance and abuse, the DMA flips the sequence: it designates gatekeepers ex anteand forbids listed unfair practices outright—self-preferencing, tying, data hoarding, discriminatory access, and exploitative app-store fees. The concept of fairness here is both procedural (equal treatment of business users) and distributive (equitable sharing of value from data). (15: Behrang Kianzad, ”Fairness, Digital Markets and Competition Law – Reconciling Fairness Norms in Digital Markets Act, Data Act and AI Act with Competition Law”).
The Data Act (2024) extends this logic to industrial and IoT data, granting users rights to access and share data generated by connected devices. It enshrines “fair contractual terms” in data sharing, echoing FRAND obligations familiar from patent licensing. Excessive pricing reappears here in digital garb: data holders must not charge “unreasonable” or “non-proportionate” fees.
Finally, the AI Act embeds fairness through ethics: prohibiting discriminatory AI systems and mandating transparency for high-risk models. Though not a competition law, it reinforces the same normative DNA—resisting algorithmic exploitation and asymmetric power.
Together, the DMA, Data Act, and AI Act amount to a quiet revolution: the European Union repositioning fairness not as an exception but as infrastructure.
VI. From Fairness to Resilience
What emerges from these developments is a new triad: fairness, efficiency, and resilience. Efficiency remains necessary but insufficient; fairness ensures legitimacy; resilience ensures continuity. Crises—pandemic, climate, or algorithmic—demand frameworks that can withstand volatility.
Resilience, in this context, is not mere robustness. It is the capacity of market institutions to adapt without betraying their social mandate. An antitrust regime blind to fairness may deliver short-term allocative gains but long-term political fragility. When citizens perceive markets as rigged or predatory, the appetite for more radical interventions—price controls, nationalisations—inevitably grows.
Fairness thus operates as a stabiliser: a moral shock-absorber between efficiency and legitimacy. Economic value without fairness erodes trust, which in turn erodes efficiency itself.
VII. The Path Ahead
The next decade will test whether Europe’s fairness-oriented model can deliver results where the efficiency-centric model faltered. If the DMA succeeds in keeping markets contestable, if the Data Act democratizes access to industrial data, and if the AI Act ensures algorithmic justice, the narrative of competition law may shift from “maximising welfare” to “maintaining legitimacy.”
This is not a retreat into moralism but a re-alignment with empirical reality. Humans – and firms – do not behave as the frictionless rational agents of textbooks. Indeed, nor should they, if we are to believe economists such as John Kay (who bluntly invokes that ”greed is dead”) or Amartaya Sen and Daniel Kahneman. Humans respond to norms, expectations, and crises, and display other preferences than pure utility and wealth maximisation. Fairness, far from distorting markets, is what allows them to survive the next shock and is ”what holds the edifice together” as already noted by Adam Smith.
As many antitrust scholars observe, there is “no consensus” on what efficiency or welfare or even Consumer Welfare Standard truly mean. Perhaps that indeterminacy is not a flaw but an invitation, to rebuild competition law as a framework for resilient fairness: one that tempers profit with proportion, freedom with responsibility, and innovation with justice.
