Private Anticompetitive Behavior in World Markets: A WTO Perspective

• Date: 01 December 2003
• DOI: 10.1177/0003603X0304800408
• Published date: 01 December 2003
• Author: Robert E. Hudec
• Subject Matter: Symposium: Global Antitrust Law and PolicyPart VII: Competition Policy and the World Trade Organization

The Antitrust BulietinlWinter 2003 1045

Private anticompetitive behavior in

world markets: a WTO perspective

BY ROBERT E. HUDEC*

The activities

of

the World Trade Organization (WTO) with regard

to private anticompetitive behavior can be divided into two tracks.

The first track consists

of

WTO activities directed to antitrust law

and policy, which the WTO, in common with the rest of the world,

refers to as "competition law and policy." After a period of almost

50 years in which its predecessor organization, the GATT (General

Agreement on Tariffs

and

Trade), paid virtually no attention to

competition law and policy, Iin 1996 the WTO created a Working

Group on the Interaction Between Trade and Competition Policy. Its

mandate was

to study issues raised by Members relating to the interaction between

trade and competition policy, including anti-competitive practices, in

*Deceased in 2003, Professor Hudec was at the time of the Sulli-

van

Conference,

Research

Professor

of

International

Law,

Fletcher

School

of

Law and Diplomacy, Tufts University; and Professor Emeritus,

University

of

Minnesota Law School.

AUTHOR·S NOTE: An earlier version

of

this article was presented at a

conference at the New England School

of

Law in March 1999. The author

is grateful to Brian Hindley.

Amy

Porges. Bill Davey and John Kingery

for

helpful comments on a still earlier version, and doubly grateful to

Rob Anderson

for

his extensive critique

of

that version.

The

GATT's

limited involvement with questions

of

restrictive

business practices is discussed briefly at notes

25-28

infra.

© 2004 by Federal Legal Publications. Inc.

1046

The antitrust bulletin

order to identify any areas that may merit further consideration in the

WTO

framework.2

Under the chairmanship

of

Professor Frederic Jenny of France, the

Working

Group

has conducted an extensive series

of

studies and

meetings since 1996, the content of which is summarized in its first

four

annual

reports

to

the

WTO

General

Council." In

the

WTO

decision

of

November 2001 launching the current "Doha Round" of

trade negotiations, the subject of competition policy was not included

in the agenda of subjects to be negotiated. Instead, it was agreed that

"negotiations" would take place after the Fifth Ministerial session in

late 2003 "on the basis

of

a decision to be taken, by explicit consensus,

at that session on modalities of negotiations."4 In other words, the

decision as to what to negotiate about (and thus, in effect, the decision

about whether to negotiate at all) was in fact put off for 2 years.

To

observers

outside

the

Working

Group,

it

appears

that

the

conditions

for

negotiation

of

meaningful

substantive

WTO

commitments on competition law are not yet present. There is still far

too much disagreement about the need for international cooperation,

as

well

as

disagreement

about

the

nature

and

substance

of

such

cooperation. There has been rather widespread agreement on the need

to help smaller countries build up their regulatory capacity in this

area, and it is likely that the Working Group will make an important

contribution in this regard.' But the vision

of

the WTO itself playing a

2

Singapore

Ministerial

Declaration,

WTO

Doc.

WT/MIN(96)1

DEC.,120.

The

first four reports, issued in 1998 to 2001, are published as

WTO Docs. WTIWGTPCI2-5.

4

Doha

Ministerial

Declaration,

WTO

Doc.

WT/MIN(Ol)IDEC.,

124.

For

a

relatively

modest

proposal

that

focuses

on

these

more

limited prospects, see Alexis Jacquemin et al., Competition Policy in an

International Setting: The Way Ahead, 21

WORLD

ECON.

1179 (1998). The

proposal suggests the creation of a small "unit" housed within the WTO,

but

autonomous

from

it,

that

would

provide

a

forum

for

national

competition authorities (1) to examine problems of divergence between

national

laws

and

policies,

(2)

to

examine

the

global

effects

of

Private anticompetitive

behavior:

1047

role in bringing competition law to bear on private anticompetitive

behavior is at present a rather distant one.s

The second track for dealing with private anticompetitive behavior

consists of action by the WTO itself treating certain instances

of

private anticompetitive behavior as a trade policy problem. Under this

second track, the WTO would act without seeking the cooperation or

concurrence of competition law authorities around the world. This

second track has received relatively little attention so far, due to the

widespread view that competition law, as administered by national

competition law authorities, is the most appropriate instrument for

dealing with the problem

of

private anticompetitive behavior. This

almost exclusive concentration on the competition law track has

unduly

narrowed

the

search

for

possible

legal

responses

to

anticompetitive behavior. To be sure, direct action by the WTO, on

trade policy grounds, has many potential limitations and shortcomings.

However, in the present situation where the competition law track is

likely to offer little immediate regulatory impact, the direct trade policy

track may well be the only option there is.

Over the years, the concern for private anticompetitive behavior as

a trade policy problem has focused on private restraints that block

imports of goods into certain markets. Such private restraints are

viewed as partial denial of the reciprocal benefits upon which most

anticompetitive practices, (3) to advise developing countries who wish to

enact new or improved competition laws, and (4) when governments are

ready, to initiate negotiations on further convergence or harmonization of

national laws and/or procedures.

The one article in this symposium that examines the prospects for

the competition law track comes to a similarly negative conclusion. See

Edward

M.

Graham,

"Internationalizing"

Competition

Policy:

An

Assessment

of

the Two Main Alternatives, in this issue

of

The Antitrust

Bulletin.

See

also

Brian

Hindley,

Competition

Law

and

the

WTO:

Alternative Structures

for

Agreement, in 2

FAIR

TRADE

AND

HARMONIZATION:

PREREQUISITES

FOR

FREE

TRADE?,

343-47

(Jagdish Bhagwati &Robert E.

Hudec eds., 1996). Hindley's essay is an exceptionally thorough analysis

of the possible forms that a

WTO

agreement on competition policy might

take.

Although

written

in

1994,

subsequent

events

have

shown

its

skepticism to have been particularly perceptive.