In new research, Patrice Bougette, Frédéric Marty, and Simone Vannuccini propose that competition authorities add a conditional fine to antitrust cases that is activated when behavioral remedies are no longer effective.
In July, the Court of Justice of the European Union closed the Android case, confirming a fine of 4.125 billion euros (about $4.6 billion) eight years after the European Commission issued its initial decision. The Commission had implemented a behavioral remedy requiring Google to stop practices that reinforced Google Search’s position on Android devices. This included creating a choice screen where users could select web browsers.
The Android remedies reflect how competition authorities have two very different and complementary instruments at their disposal to address harms. Fines punish past conduct and seek to deter future infringements. Behavioral injunctions instead tell firms what they must, or must not, do going forward to return competition to the market. The EU pursued both in the Android case.
However, when crafting behavioral remedies, competition authorities face a problem that is particularly acute in fast-moving markets: they must decide today how firms should behave tomorrow. And that tomorrow can stretch over many years, in markets whose evolution is increasingly hard to foresee. As University of Chicago Law School professor Randy Picker put it, “antitrust remedies are beset by the central problem faced by a dog chasing a car: what does the dog do with it when it catches it?” What happens if the behavioral remedy stops working as expected?
In our recent paper, we argue that authorities should be able to change the balance between fines and behavioral remedies over time. Rather than a package that stays fixed once a decision is adopted, we propose a two-tier sanctioning mechanism: an immediate baseline fine combined with a behavioral injunction, plus a conditional monetary fine component that can be activated if the injunction is later terminated because it failed to achieve its goal.
The basic principle is simple: fines and behavioral remedies can be complements when a decision is taken but become substitutes when circumstances change. If a behavioral remedy fails to achieve its purpose, whether because the firm circumvents responsibilities or the original remedy was inadequate, the conditional fine can motivate firms to fulfill the remedy’s intent instead.
Why behavioral remedies age badly
Behavioral remedies prescribe how the firm must behave, often in detail and for years. As Ioannis Lianos has argued, prescriptive remedies push adjudication to its limits: the authority must set obligations today that it will then have to supervise.
Competition agencies must specify obligations today without knowing all the circumstances in which they will operate tomorrow. The same question arises in merger control, where behavioral commitments must also be designed ex ante and monitored for years, as two of us have argued with Oliver Budzinski. It also raises a broader issue: once intervention can no longer be a one-off correction and must adapt to changing circumstances, antitrust starts to look like regulation.
This problem is especially important in the digital economy, characterized by a rapid pace of evolution. A remedy designed around the competitive conditions of 2026 may no longer make sense several years later.
We distinguish three reasons why this can happen.
First, competition authorities do not possess perfect information, and when a remedy is designed, the firm knows far more than they do about its technology, costs, and customers. A remedy that appears capable of restoring competition when adopted may prove ineffective in practice. The Android case illustrates this difficulty. The Commission had instituted remedies to open up Android phones to more choice, but these remedies have struggled to overcome frictions and dark patterns that push users to keep the default to Google Search.
If a remedy fails because the authority designed it badly, imposing an additional sanction on the firm would seem unfair. But in many real cases, responsibility is less clear-cut. A firm may formally comply with an injunction while using the discretion left to it to implement the remedy in a way that protects its own market position, as the Google choice screen remedy testifies.
That brings us to the second problem: moral hazard. Once the remedy is in place, the authority cannot observe everything the sanctioned firm does. The firm may therefore have opportunities to comply with the letter of a decision while frustrating its purpose.
The third problem is that the market itself may change. An injunction can become obsolete because of technological innovation, entry, changes in consumer behavior, or a transformation of the competitive environment. This happened with the final judgment against Microsoft. Remedies had placed restrictions on Microsoft in order to open up its dominance, achieved through anticompetitive behaviors, for “middleware” software like web browsers and media players. These remedies ran from 2002 until they finally expired in 2011, when the Department of Justice acknowledged that new markets in internet search and mobile phones had loosened Microsoft’s hold over software.
A second-tier fine
Suppose an authority concludes that an injunction is no longer restoring competition, or that keeping it in place would actually impose costs without producing corresponding benefits.
One possibility is simply to remove it. But removing the remedy reduces the overall burden of the decision: the firm regains valuable strategic freedom, while the deterrent effect of the sanction is weakened.
Our proposal is to anticipate this possibility from the inception.
When the original decision is adopted, the authority would impose a baseline fine, payable immediately, together with the behavioral injunction. It would also specify a conditional second-tier fine. If the injunction works, there is no reason to activate that component. But if subsequent information shows that the injunction should be terminated, part or all of the conditional fine could become payable.
The conditional fine is not a sanction for misconduct: it is the monetary counterpart of releasing a firm from an obligation that formed part of its original sanction, and it can be triggered even when nobody has done anything wrong.
Suppose the Commission had split the 4.34 billion euro fine (about $5 billion at the time) it imposed on Google in 2018—later reduced to 4.125 billion euros on appeal—from the outset: 3.7 billion euros payable immediately, an injunction requiring a choice screen, and a conditional component of 640 million euros attached to it. The total would remain the same. When the choice screen’s contribution to restoring competition came into question, the Commission could keep the injunction and leave the conditional component dormant, or accept that it was no longer doing restorative work, release Google from it, and activate part of the conditional component. Google would have known that price from 2018, and the decision to abandon the remedy would have been visible, reasoned, and appealable.
Notably, the conditional fine option is at the discretion of the authority, not the firm. The conditional fine must not become simply a price that a dominant firm can pay to escape a behavioral obligation. If escaping the obligation produces an expected gain larger than the fine, a profit-maximizing firm will rationally choose to pay.
On the other hand, competition sanctions should be constrained by proportionality and judicial review, meaning the fine cannot be set high to be used as an unlimited financial weapon. Whether such a mechanism could be built on the existing enforcement regulation, or would require amending it, is a question worth debating.
The reason why an injunction failed to restore competition should determine how the mechanism operates. If the firm intentionally fails to fulfill the remedy, activation of the conditional fine should be strong enough to discourage future misconduct. If the problem is a design error, responsibility is much less clear. Activation should therefore be cautious and subject to a strong proportionality test.
If the injunction has become redundant because competition has actually been restored, there is nothing left to compensate and the conditional component should lapse. If the injunction has become ineffective because of, for example, technological progress, while the harm persists, the authority is abandoning an objective it has not achieved, and that is where a compensatory, deterrence-preserving activation belongs. Its amount could, for instance, decline with the time for which the firm has already complied.
A predictable reduction of the conditional fine over time makes sense when nobody is responsible for the remedy becoming obsolete. But applying the same rule when the firm itself can influence the remedy’s effectiveness could create a perverse incentive: the firm might cooperate initially and then strategically reduce compliance as the remaining “price of exit” falls.
The mechanism also creates risks on the authority’s side. At the exit stage, an authority could treat the conditional fine as a source of revenue, or as a convenient way to avoid admitting that its remedy was poorly designed, shifting the cost of its own mistake onto the firm. At the design stage, an authority that knows it holds a paid exit option may impose more ambitious and less realistic obligations than it otherwise would. Clear attribution rules, and an unchanged standard of proof that a remedy is workable when it is adopted, are needed to guard against both.
Establishing safeguards for conditional fines
Constantly rewriting behavioral obligations as markets evolve is ineffective. Under the Digital Markets Act, the European Commission has had to adopt specification decisions telling gatekeepers what their obligations actually require. Our mechanism instead relies on an exit option when injunctions fail, held up by procedural safeguards.
One possible safeguard is a review clause written into the original decision, requiring the authority to reassess the remedy after a set period. Another is an independent trustee monitoring outcomes and recommending whether the injunction should remain in force. A firm could also be permitted to request a review when it believes that market developments have made the remedy obsolete.
Crucially, activating the second-tier fine should require a new decision. This would preserve the firm’s rights of defense and make the authority’s assessment subject to judicial review.
The broader principle is that long-lived remedies should acknowledge uncertainty rather than pretend it does not exist.
In sum, the challenge is not to make antitrust sanctions harsher or more lenient, but to make them more responsive to what happens after the decision is made. What we propose resembles a regulatory contract, in the spirit of responsive regulation: rules set in advance, which provide legal certainty and remain open to judicial review, but which allow the remedy to adapt as the market evolves. Herbert Hovenkamp’s point stands: a rule that cannot be administered effectively may be worse than no rule at all.
Authors’ Disclosures: The authors report no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
Subscribe here for ProMarket’s weekly newsletter, Special Interest, to stay up to date on ProMarket’s coverage of the political economy and other content from the Stigler Center.
