Coherence or Confusion: The Future of the Global Antitrust Conversation

Published date01 March 2004
Date01 March 2004
DOIhttp://doi.org/10.1177/0003603X0404900110
Subject MatterAntitrust in the U.S. and the EU: Converging or Diverging Paths?
The Antitrust Bulletin/Spring-Summer 2004
Coherence or confusion:
the future
of
the global antitrust
conversation
BY JOHN H. SHENEFIELD*
I.
Introduction
385
Not too long ago, there were so few national antitrust laws in
existence that the notion of antitrust coherence among nations would
have bordered on the fanciful. The United States had an antitrust law;
Germany and Japan each had one, courtesy of American military
occupation, but the former was limited and the latter was on paper
only. The European Union had one. For the rest, national antitrust
laws were largely dead letters and their enforcement, anemic.
Today, the landscape is entirely different. Some 100 countries
have antitrust laws, and the leading industrial countries by and large
have serious and energetic enforcement programs. Premerger review
in several jurisdictions simultaneously is routine for many large
transactions, and even what had
been
dismissed as a uniquely
*Partner, Morgan, Lewis &Bockius LLP; formerly Assistant Attorney
General in charge
of
the Antitrust Division, U.S. Department
of
Justice.
AUTHOR'S NOTE: This article is based loosely on a lecture at the Regulatory
Policy Institute at Jesus College, Oxford University, in June 2002. I grate-
fully acknowledge the thoughtful comments
and
suggestions
of
Irwin M.
Stelzer, Willard K. Tom, Edward D. Cavanagh and Christine A. Laciak.
©2004 by Federal Legal Publications, Inc.
386
The antitrust bulletin
American eccentricity--criminal
enforcement-is
beginning to win
some adherents.
Why has all of this happened? Was it inevitable, or are the changes
we see in the antitrust world themselves the result of larger forces?
The last 25 years have seen two great trends-globalization and
economic liberalization-which together have had a profound and
transforming effect on most national economies, and concomitantly on
efforts to safeguardcompetition in thoseeconomies by operation of
law.
Globalization has
touched-and
sometimes
shocked-every
national economy on the planet, whether fully receptive or entirely
resistant. Even apparently very localized companies cannot remain
impervious
to
the
combined
impact
of
fluid
capital
markets,
instantaneous international communication and the economic necessity
of producers to buy from and sell into global markets. These facts of
economic life directly affect regulatory policies: trade barriers have
been forced down, and restrictions on foreign investment have likewise
declined. New industries not bounded by political borders have sprung
up, and old industries have either been reformed or eliminated, so that
increasingly products have their origins in one country, are assembled
in a second country, with parts from a third country, and are sold
through fabricators in a fourth country ultimately to consumers in a
fifth country. Although the
globalized
economy
is not always
welcome-demonstrators
on the streets
of
Seattle, Goteborg and
Genoa can think of dozens of reasons to demonize globalization-it is
nevertheless a fact of life: it cannot be rolled back; and it must be
accommodated. The competition provided by some obscure garment-
maker across the Pacific Ocean is a
competitive
reality to the
manufacturer
of
clothes
in
Oakland,
California.
Japanese
car
manufacturers have transformed the American automobile industry.
Globalization can be decried,but it cannot be made to disappear.
Similarly, the widespread consensus in support
of
economic
liberalization has had a profound effect on most national economies
across the globe. Fifty years ago, following depression and worldwar,
and confronting massive destruction, high unemployment and severe
shortages, governments lost their faith in the power of the free market
and sought refuge instead in Great Britain's "New Jerusalem," or
Coherence or confusion :387
France's "notional planning," where the state, as General de Gaulle
said in 1945, held "the levers of command." Government's intrusion
into the workings
of
the American economy, begun with Franklin
Roosevelt's New Deal, reached its bipartisan peak when the Nixon
administration introduced wage and price controls.
One of Lord Keynes's many memorable passages observes that
ideas are more powerful "than is generally understood. Indeed, the
world is ruled by little else. Madmen in authority, who hear voices in
the air, are distilling their frenzy from some academic scribblers of a
few years back
...
[S]ooner or later it is ideas, not vested interests,
which are dangerous for good or evil."!
Never was that truer than in the great liberalization debate. At think
tanks
and congressional hearings in the U.S., at the Institute of Economic
Affairs and like-minded groups in the U.K., in journals and on op-ed
pages, intellectuals and policy-makers waged a war of ideas. Gradually,
the tide of economic interventionism began to recede with the deregulation
efforts of the Ford, Carter and Reagan administrations, with the coming to
office of Margaret Thatcher, and with the ascendancy of the thinking of
Friedrich von Hayek, George Stigler, Alfred Kahn, Milton Friedman and
Thatcher's "convenient
madman,"
Sir Keith Joseph.
The results were vividly reflected in political power struggles on
both sides of the Atlantic. Airline deregulation, rail deregulation, the
breakup of AT&T following settlement with the Department of Justice
(DOJ), the abolition of energy
controls-every
battle marked a step
forward toward the liberation of the market from government control
in
the
United
States.
Privatization,
first
in
the
U.K.
and
more
gradually
on
the
Continent,
remade
the
European
economic
landscape. The Clinton administration endorsed market freedom, and
the 1997 Blair landslide consolidated the Thatcher revolution, rather
than reversing it. Across Eastern Europe in the wake of the fall of the
Berlin Wall, political freedom has been accompanied by the mostly
successful struggle toward economic liberalization, privatization and
deregulation.
Not
far
behind
in
almost
every
case
has
been
the
introduction
of
acompetition enforcement regime.
J.M.
KEYNES,
THE
GENERAL THEORY OF EMPLOYMENT, INTEREST AND
MONEY
383-84
(1936).

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