Towards International Competition Rules?

Abstract

The ongoing trade liberalisation has reduced tariffs and barriers to trade significantly and has opened up markets to foreign actors. The globalisation has in the same time increased the effects of the trade liberalisation by the disappearance of national borders and the facilitation of cross-border transactions. The debate of further international cooperation in the field of competition is based on the fear that the effects of the trade liberalisation will be consumed by governmental and private anticompetitive behaviour, which will constitute new forms of barriers. Admittedly, nations have a tendency to direct their behaviour by mainly national welfare considerations and this increases the likelihood that nations use anticompetitive practices to limit the result of the trade liberalisation. After all, competition is a means to attain higher national economic efficiency and this makes the fear of rent shifting practices even more justified. The inability of nations to evaluate their actions in a wider spectrum, and to work towards global welfare as the predominant goal, makes the process towards any convergence of nations’ competition laws very difficult and time-consuming. The process is also complicated by the different positions the US and the EC, the two largest economies in the world, have taken. The consequence has been a polarised debate with, on the one hand the far reaching approach of the EC, which is opting for the adoption of some core principles within the WTO, and on the other hand the more limited view of the US, which believes the best way to achieve international convergence in competition matters is by voluntary bilateral agreements.

The standpoint is taken from the cases Boeing/McDonnell Douglas and GE/Honeywell. The cases illustrate the possibility to arbitrarily take into consideration industrial policy reasons but openly defend this by the application of the nation’s competition law. Not saying this was the case in the two mergers, even if some authors are of that opinion, it is obvious that differences in competition authorities’ assessment may constitute a protectionistic measure or at least provoke accusation of protectionism.