In an increasingly globalized world, the challenges facing competition law and its enforcement are more prominent than ever. With domestic markets opening to foreign trade and multinational corporations operating globally, there is a pressing need for international harmonization of competition law and the establishment of a global competition authority.
This essay begins by highlighting the essential elements for effective international harmonization: substantive provisions and enforcement measures. It argues that for the global economy to thrive, competition law must evolve internationally, requiring harmonization across diverse legal frameworks.
Exploring the proliferation of over 130 diverging systems of competition law worldwide, the essay reveals the bureaucratic hurdles and significant costs and fines imposed, hindering the entry of small firms and start-ups into the global market. This unequal economic landscape favors large corporations, stifling competition and growth, particularly in developing countries.
The essay delves into the challenges posed by global monopolies, demonstrating how national competition laws often fail to address "borderless markets." Using examples such as differing legal thresholds for market dominance, it underscores the inadequacy of national regimes in regulating global corporate behavior effectively.
Highlighting the legal complexities surrounding monopolistic practices, such as those permitted under one jurisdiction but prohibited under another, the essay emphasizes the need for policymakers to adapt to the realities of a borderless economy.
Table of Contents
A) (Too) many diverging substantive measures – (too) many systems of competition law in order for the global economy to work and develop effectively?
I) A matter of equal economic opportunities
II) Global monopolies – how national competition law neglects the element of “inter-state trade” and the consequences for states and companies
1.) The “relevant market” ends at the borderline – the global monopoly might not
2.) Harmonization as a practical solution for both, states and companies
3.) The element of “inter-state trade” as a key link in the EU – also suitable on a global level?
B) The need for effective law enforcement as demonstrated with reference to the challenge of dealing with cartels operating on a global scale
C) Call for an International Competition Authority for an effective approach towards law enforcement
I) Decline of condemnations with regards to antitrust issues in the US as a politically motivated product
II) Underenforcement in the EU due to scarcity of resources
D) Striving for procedural fairness through harmonization
E) Conclusion – global harmonization is the key to a effectively developing global economy and the answer to the infringing power of Multinational Corporations
Objectives and Core Topics
This essay addresses the urgent necessity of harmonizing international competition law and establishing a global competition authority to manage the challenges of a globalized market, where cross-border business practices currently face inconsistent regulatory landscapes.
- The inefficiency caused by over 130 diverging national competition law systems.
- The failure of national "relevant market" definitions to capture global monopoly power.
- The potential for international harmonization to reduce bureaucratic burdens and legal costs for companies.
- The role of an international competition authority in mitigating resource scarcity and political bias in enforcement.
- The essential requirements of procedural fairness, transparency, and due process in antitrust systems.
Excerpt from the Book
The “relevant market” ends at the borderline – the global monopoly might not
For instance in the US, Sec. 2 of the Sherman Act makes it unlawful for any person to "monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations" (15 U.S.C. § 2). A company violates the law if it tries to maintain or acquire a “monopoly power” in the relevant market through unreasonable methods and there can be no legitimate business justification.
According to the Federal Trade Commission a "monopolist" is a firm with significant and durable market power, i.e. ability to raise price or exclude competitors. Whereas by market share, this is typically affirmed in the US if the firm has more than 50 percent of the sales of a particular product or service within a certain geographic area or by leading cases two thirds or more of a relevant market, Vietnam inter alia already assumes a dominant position with a market share of more than 30 % (Law No.23/2018/QH14 Hanoi, June 12, 2018, Art. 24 No. 1.). Both legal regimes take reference to the “(relevant) market”, which legally ends at the borderline. While not taking “inter-state trade” into account, this is leading to the first obstacle for firms operating globally and the attempt of policy makers and states to ensure an effective development of the global economy. In a globalised world markets do not end at borderlines. It´s rather characteristic that through outsourcing and the opening of new markets crossborder markets make up a majority.
Summary of Chapters
A) (Too) many diverging substantive measures – (too) many systems of competition law in order for the global economy to work and develop effectively?: Discusses how the proliferation of divergent competition regimes creates economic barriers and neglects the reality of cross-border trade.
B) The need for effective law enforcement as demonstrated with reference to the challenge of dealing with cartels operating on a global scale: Highlights the difficulty of managing global cartels in the absence of a supranational authority and the resulting reliance on limited international cooperation.
C) Call for an International Competition Authority for an effective approach towards law enforcement: Analyzes the political influences and resource constraints in U.S. and EU antitrust enforcement, advocating for an independent global authority.
D) Striving for procedural fairness through harmonization: Examines transparency and due process deficits in current competition regimes, suggesting global principles to enhance policy legitimacy.
E) Conclusion – global harmonization is the key to a effectively developing global economy and the answer to the infringing power of Multinational Corporations: Summarizes the necessity of an internationally harmonized standard to protect the global economy from anti-competitive corporate behavior.
Keywords
Competition law, Globalization, Harmonization, Antitrust, International Competition Authority, Monopoly, Inter-state trade, Procedural fairness, Market power, Multinational corporations, Enforcement, Substantive provisions, Cartels, Transparency, Due process.
Frequently Asked Questions
What is the primary focus of this paper?
The paper explores the need for international harmonization of competition laws and the creation of a global competition authority to better regulate a globalized economy.
What are the central thematic fields discussed?
The core themes include market fragmentation, the limitations of national antitrust legislation, enforcement challenges regarding global cartels, and the importance of procedural fairness.
What is the primary objective or research goal?
The goal is to demonstrate that current, fragmented competition systems hinder effective economic development and to propose harmonization as a solution to limit anti-competitive global corporate power.
Which scientific/legal approach is used?
The author uses a comparative legal analysis, evaluating different competition regimes (U.S., EU, Vietnam) and reviewing established legal literature and international competition case examples.
What is addressed in the main sections?
The main sections cover the economic impact of legal fragmentation, the failure of national market definitions, the scarcity of enforcement resources, and the requirement for procedural transparency.
Which keywords best characterize this research?
Keywords include Competition Law, Globalization, Harmonization, International Competition Authority, and Procedural Fairness.
Why does the author consider national market definitions problematic?
National borders limit the "relevant market" definition, which fails to account for modern, cross-border corporate operations and global monopolistic behavior.
What role does the "inter-state trade" clause play in the author's argument?
The author suggests using the "inter-state trade" element, similar to the EU model, as a functional parameter to determine legal abuse on a global scale.
How does the author characterize the US and EU approaches to competition law?
The author notes a trend of reduced antitrust intervention in the U.S. due to political conservatism and resource-driven under-enforcement within the European Commission.
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- Natalie Wüstneck (Autor:in), 2022, The Urgent Need of an International Competition Law and Competition Authority in a Globalised World. A Call for Harmonization, München, GRIN Verlag, https://www.grin.com/document/1449563
