“Internationalizing” Competition Policy: An Assessment of the Two Main Alternatives

• DOI: 10.1177/0003603X0304800404
• Date: 01 December 2003
• Published date: 01 December 2003
• Author: Edward M. Graham
• Subject Matter: Symposium: Global Antitrust Law and PolicyPart VI: Competition Policy Cooperation: Across the Atlantic and beyond

The Antitrust BulietinlWinter 2003

"Internationalizing"

competition

policy: an assessment

of

the

two

main

alternatives

BY EDWARD M. GRAHAM*

I.

Introduction

947

Among specialists who worry about such matters as competition in

the global economy, there is emerging a consensus that competition

policy increasingly needs to be international in scope. To state the

reason for this in simple, classical antitrust terms, many "relevant

markets" increasingly spill across national boundaries. Accordingly,

practices or conduct of firms that bear upon competition also spill

across national boundaries. This latter certainly is true

of

those

business practices that are generally deemed to be undesirable (and

hence most often illegal), e.g., practices associated with cartelization

of markets. Thus, as has been well documented, a growing number of

international

cartels

cases

were

subject

to

investigation

and

prosecution by U.S. authorities during the late 1990s.1According to

ICPAC 2000 it is not altogether clear whether this growth resulted

from

an

increase

in the

underlying

incidence

of

international

cartelization or, alternatively, achange in the priorities

of

U.S.

*Institute for International Economics, Washington, D.C.

INT'L

COMPETITION

POLICY

ADVISORY

COMM.

REPORT

TO

THE

U.S.

ATT'y

GEN.

&ASS'T ATT'y

GEN.

FOR

ANTITRUST

(2000)

[hereinafter

ICPAC 2000].

©2004 by Federal Legal Publications. Inc.

948

The antitrust bulletin

enforcement agencies. But, whichever is true, it is clear that cartels

did exist in many industries during the 1990s and that practices

of

firms participating in these cartels were international in scope. Also,

business conduct that is not necessarily seen as undesirable but is

nonetheless appropriately the domain

of

competition scrutiny or

regulation is increasingly international in scope. Thus, for example,

the number

of

large mergers and acquisitions that were "cross-border"

in nature virtually exploded during the 1990s, such that the percentage

of mergers and acquisitions subject to either European Union (EU) or

U.S. scrutiny grew dramatically. Moreover, several of these were

blocked by one set of authorities or the other. And, while problems

created by competition (or, more to the point, lack

of

competition,

e.g., in the case of international cartels) that is "global" in scope have

been

addressed

with

some

degree

of

effectiveness

by

national

authorities, there is a sense that some problems do exist that simply

are too big, or too international, to be effectively handled by such

authorities.i

However, consensus that there is some need for a competition

policy that is international in scope does not translate into a consensus

on how to achieve the desired end

of

internationalization

of

this

competition policy. Rather, several alternative approaches to how

competition policy might be internationalized have emerged, and no

full consensus exists on which, if any,

of

these approaches is the

correct way forward.

Thus,

for example, the EU has proposed a

formal multilateral agreement on "trade and competition policy," to be

embodied in the World Trade Organization (WTO). To be realized,

such a multilateral agreement would require that anegotiation be

undertaken and concluded.

If

the agreement is to be crafted in the

See.

e.g.,

id.

Proposals

for

some

sort

of

international

or

supranational

competition

policy

have

been

advanced

by a

number

of

authors, including

FREDERICK

M.

SCHERER,

COMPETITION

POLICIES

FOR

AN

INTEGRATED

WORLD

ECONOMY

(1994);

Eleanor

Fox,

Toward

World

Antitrust and Market Access, 91

AM.

J.

INT'L

L. 1(1997); and Edward M.

Graham &J. David Richardson, Issue Overview. in

GLOBAL

COMPETITION

POLICY

3(Edward M. Graham &J. David Richardson eds., 1997). For a

skeptical view, see Daniel K. Tarullo, Norms

and

Institutions in Global

Competition Policy, 94

AM.

J.

INT'L

L. 478 (2001).