Exploring the space for antitrust law in the race for space exploration.

• Published date: 22 March 2016
• Author: Wells, Todd
• Date: 22 March 2016

INTRODUCTION: "CLEAR SKIES WITH A CHANCE OF SATELLITE DEBRIS"

Space has been called the final frontier, but The Wall Street Journal's referral to space as "The Next Business Frontier" seems like a more optimistic view of the expanse of infinite nothingness above us. (1) From overpopulation (2) and famine (3) to disease (4) and climate change, (5) humanity faces a number of perils that may prove too great unless it finds a new home. (6) Avoiding certain peril is not the only incentive for space travel--though, shouldn't that be enough? First, there are potentially immense economic benefits from space tourism. (7) And space tourism is not the only potential revenue stream. Some proponents have even suggested mining resources from asteroids. (8) Whether it comes due to these economic incentives or as a solution to many of the ills that plague society, both corporations and governments are investing heavily in space exploration.

This Note will analyze the interactions between Indian, Japanese, Russian, and United States corporate antitrust laws and those laws' effects on the space race. The first part of this Note will give relevant background information regarding international space law, the policies each country has in place regarding space exploration and an explanation of relevant antitrust law. The second part of this Note will analyze the weaknesses and strengths of the various legal structures that play a part in incentivizing space exploration. The third part of this Note will argue that privatized space exploration has large benefits, so countries around the world should be prepared to tailor antitrust law accordingly. Specifically, in order to combat some of the inefficiencies that exist in space exploration, antitrust law must adapt in a way that it rarely has.

I. THE FACTS--OR "JUST WHAT DO YOU THINK YOU'RE DOING, DAVE?"

This part of the Note will address the factual background necessary to delve into a deeper analysis of the topic. The part will first address the different attempts at space exploration by the various countries--it is important to note, however, that successful past exploration is less important than potential future exploration because this field changes so rapidly. (9) Then, this part will cover the relevant international law playing a part in the current space race. Lastly, it will explain the role of antitrust laws and the relevant antitrust laws that could benefit or hinder space exploration.

A. "In Your Face, Neil Armstrong"

The original space race, between Russia and the United States, resulted in humanity's first exploration of space. (10) Because of this, a chronological history of space exploration necessarily starts with the United States and Russia.

In 1957, Russia--the former USSR--launched Sputnik into space. (11) In early 1958, the United States launched its first satellite into space. (12) Later that year, President Eisenhower created the National Aeronautics and Space Administration (NASA) as an expansion from the National Advisory Committee for Aeronautics. (13) In 1960, Russia launched the first living creatures into space. (14) In April of 1961, Russia launched the first human into space, less than one month before the first American arrived in space. (15) This competition launched an escalatory spending spree for both countries. (16) It is not unanimously agreed upon when the space race ended, (17) but the last major space achievement for the era occurred when the United States landed humans on the Moon on July 20, 1969. (18)

1. The United States

The United States federal government has continued to spend less on space exploration--as a percentage of its overall budget--since it landed humans on the Moon. (19) Subsequently, the country has seen massive growth in the area of privatized space exploration. (20) In 1984, President Ronald Reagan, signed into law the Commercial Space Launch Act, which first allowed private launches and private licensing agreements with government launches. (21)

Some of the most exciting developments in space exploration for the United States have occurred in relatively recent years. In 1996, the Ansari X Prize was founded by the St. Louis-based X Prize Foundation. (22) The 10 million dollar prize went to SpaceShipOne on October 4, 2004 for becoming the first private company to launch a manned rocket into space twice within two weeks. (23) Some have proposed that international private launch companies threaten the survival of domestic launch companies, so trade limitations should be enforced. (24)

2. Russia

Despite losing the first space race, (25) Russia has had many developments in space exploration and now uses an approach similar to the United States: a mix of privatization and government involvement. (26) The Russian Space Agency ("RSA") assisted with the construction of the International Space Station from the beginning, and Russia assists other countries' space exploration in a variety of ways. (27) The RSA is interesting because it has operated very much unlike an American government agency: it has made a profit. (28) Russian companies, Orbital Technologies and RSC Energia, have also worked out plans for the first commercial space station. (29)

3. India

India's greatest strength seems to be cost-effectiveness. India has the Indian Space Research Organisation. (30) India, developing its space program decades after the United States and Russia, has had the benefit of gaining a lot of the knowledge required to get to space without the massive expenditures that were necessary for Russia and the United States to achieve the same goal. (31) India has not just undercut the other space agencies historically, though; it is outperforming other countries currently pursuing similar missions. (32)

4. Japan

Japan has proposed some of the most interesting space ideas recently. Japan's space agency is Dokuritsu-gyosei-hojin Uchu Koku Kenkyu Kaihatsu Kiko ("JAXA"). JAXA has stated that it has the goal of sending astronauts to the moon around 2030, with a goal of completing a manned lunar base by 2030. (33)

The manned lunar base may seem like the stuff of science fiction, but the most outlandish idea has come from a private Japanese company. The Obayashi Corporation announced that it plans to have a working space elevator by 2050. (34) This Note provides no thought on the feasibility of such a project. (35)

5. Other Countries Space Exploration

China has one of the best space programs not yet mentioned. (36) The European Space Agency is a conglomeration of multiple member countries. (37) Due to space constraints, these programs will not be thoroughly analyzed.

B. "I've Got the Whole World In My Hands"

The key international law in place for space exploration is the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, ("Outer Space Treaty"). (38) The Outer Space Treaty codifies a belief that resource management should be different in space than it is on Earth. (39)

One particularly interesting treaty that has gained little traction is the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies ("Moon Treaty"). The Moon Treaty was opened for signature in 1979. (40) The Moon Treaty has only been signed by 11 parties, and no country currently engaging in manned space exploration has signed and ratified the agreement. (41) The Moon Treaty attempts to close a "loophole in the Outer Space Treaty by banning any ownership of any extraterrestrial property by any organization or private person, unless that organization is international and governmental." (42) It is unclear the impact the Moon Treaty has on the international community. (43) The Moon Treaty is not a mandatory law that countries must follow. If it were, it would have clear effects on the privatization of space exploration. In that case, incentives would radically change, and it would significantly change the direction of this note. (44) Until actual extraction of resources in space occurs, the Moon Treaty remains in limbo. (45)

C. "I Don't Care About What Anything was Designed to Do, I Care About What It Can Do"

This part will examine what antitrust law is, the economic explanation behind antitrust law, and the antitrust law in that can make a difference in space exploration.

7. What is Antitrust Law?

Antitrust laws exist to protect the existence of private competition. (46) Antitrust law, when functioning appropriately, allows companies to take advantage of economies of scale while also allowing start-ups to enter the market. (47) In the United States, antitrust laws--also referred to as 'competition laws'--are statutes developed by the U.S. Government to protect consumers from predatory business practices by ensuring that fair competition exists in an open-market economy." (48)

2. Economic Justification

The simple reason that antitrust laws are important is because they help to promote competition. (49) Generally, increased competition drives the price of a product down. (50) It is easy to imagine the type of price gouging that could occur if there were only one supplier of a good. (51)

A key point of antitrust law, though, deals with decreasing costs due to economies of scale in a large firm like a monopoly. (52) This economic phenomenon is called a natural monopoly. (53) Natural monopolies occur when an industry has high fixed costs and marginal costs continue to drop as production increases. (54) A trash pick-up route is a good example of this phenomenon in place. (55)

3. Antitrust Laws in Place Around the World

Countries around the world take a myriad of approaches to antitrust laws. The United States has a few major statutes in place to fight anticompetitive behavior: the Sherman Act, (56) The Federal Trade Commission Act, (57) and the Clayton Act. (58) Under United States' law, a violation of an act typically requires an overt action rather than just a company being a...