Antitrust Without Borders: From Roots to Codes to Networks

Competition Policy and Antitrust

Article Snapshot

Author(s)

Eleanor Fox

Source

Cooperation, Comity, and Competition Policy, A. Guzman, ed., Oxford University Press, 2010

Summary

Antitrust law is now ubiquitous, but problems remain, and horizontal solutions between nations are not all encompassing.

Policy Relevance

Antitrust law worldwide has grown tremendously from a half century ago, but there is room for improvement. Remedies now come mostly from cooperation between nations and the notion that what can be done at the lower level should be done at that level, but some problems still call for overarching, higher law solutions.

Main Points

  • Antitrust law has moved away from a global standard toward a standard that emphasizes national cooperation across borders. In the 1990s, the hope was that the World Trade Organization (WTO) might provide the framework for world antitrust law; however, this failed to materialize as nations could not agree on a “one-size-fits-all” approach and the value of the diversity of each nation was emphasized.
     
  • Comity, the idea that one nation ought to defer to another with a greater stake or interest in a matter is another antitrust concept that is losing relevance going forward. Ultimately, it sounds good, but it is limited to one nation in its dealing with another and a more universal and overarching interaction among lots of nations is the future of global antitrust law.
     
  • The rule of subsidiarity, that what can be done just as well or better at a lower level should be done at that level, has become the norm for world antitrust law. The International Competition Network (ICN), founded in 2001, is an example of this notion. The ICN works from the ground up to discuss and find solutions to practical problems, such as harmonizing procedures and rules where their divergence caused extra transaction costs, etc.
     
  • The hope for a comprehensive top-down approach to world antitrust law in the 1990s faded as a comprehensive networking approach rose in popularity through the notion of subsidiarity, embodied in the ICN beginning in the early 2000s.
     
  • Cooperation and cross-fertilization among nations have helped to dispel conflicts and lessened tension. Moreover, it has helped developing nations by sharing useful knowledge and information.
     
  • Unfortunately, cooperation and convergence cannot solve all the world’s antitrust problems. The main problem that eludes resolution through these lower level avenues is “outward-oriented harm,” which is negative externalities that result from the reality that nations do not worry very much about the effect that their policies have outside their own borders. This notion is realized most acutely in exports and world cartels and in the restrictive state trade policies that support them.
     
  • The one major problem of “outward-oriented harm” must be resolved by a top-down approach that comes from an organization like the WTO. Nevertheless, world antitrust law has come a long way in the last half century, and many of its problems can be resolved through a focus on networking among nations at a grass-roots level that emphasizes cooperation and convergence to create a comprehensible framework for working out antitrust conflicts between nations.
     

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