The Vertical Dimension of Cooperative Competition Policy

DOI10.1177/0003603X0304800406
Published date01 December 2003
Date01 December 2003
Subject MatterSymposium: Global Antitrust Law and PolicyPart VI: Competition Policy Cooperation: Across the Atlantic and beyond
The Antitrust BulletinlWinter 2003 1005
The vertical dimension
of
cooperative
competition policy
BY
JIM
CHEN*
I.
Law's fractal geometry
Law as an organic system
can
hardly escape the power law distri-
butions that govern
"a
wide variety of physical, biological, and
social
systems."1 The
apparent
chaos
of
the law masks
deeply
complex
structures that operate at any scale. Intergovernmental
relations in
particular
exhibit
the elegant geometry
of
fractals:
"No
matter how high the magnification, no matter how deep into
the structure
you
look, it always looks exactly, dizzyingly, the
same."2
*James L. Krusemark Professor of Law, University of Minnesota
Law School.
AUTHOR'S NOTE: Daniel A, Farber, Gil Grantmore, and Philip J. Weiser
provided helpful comments. I wish to express my appreciation for E. Thomas
Sullivan, who served as dean
of
the University
of
Minnesota Law School
throughout much
of
my academic career, and
for
Daniel J. Gifford, a col-
league and friend
of
the highest order. Special thanks to Kathleen Chen.
David Post &Michael Eisen, How Long Is the Coastline
of
the
Law? Thoughts on the Fractal Nature
of
Legal Systems, 29 J.
LEGAL
STUD,
545, 569 (2000); see also Pablo Marquet,
Of
Predators, Prey,
and
Power Laws, 295
SCIENCE
2229, 2229 (2002) (hailing the "vast number of
biological power laws").
Post
&
Eisen,
supra note 1, at 551. See generally
DIMITRIS
N.
CHORAFAS,
CHAOS
THEORY
IN
THE
FINANCIAL
MARKETS:
ApPLYING
FRACTALS,
©2004 by Federal Legal Publications. Inc.
l006
The antitrust bulletin
The contributions
of
Edward M. Graham! and Frederic Jenny-
to this symposium on global antitrust law and policy provide an
ideal occasion for exploring the fractal nature
of
law and coopera-
tive competition policy. Dr. Graham and Professor Jenny disagree
in their assessment
of
multinational cooperation on what most of
the world calls competition policy. Despite conceding that
"the
increasingly 'global' nature of at least some markets" enhances the
desirability of a comprehensively international competition policy,
Graham believes that multilateral negotiations under the auspices
of
the World Trade Organization (WTO) is politically infeasible."
Jenny takes a more sanguine view of the prospects for "a multilat-
eral framework for cooperation on competition which will provide
for transparent, fair and effective cooperative mechanisms."6 So
does the WTO itself, whose Ministerial Conference at Doha, Qatar,
yielded
adeclaration
"[r]ecognizing
the case for a
multilateral
framework to enhance the contribution
of
competition policy to
international trade and development."7
Rather than contest these depictions of international cooperation
on competition policy, I shall project onto the global stage certain
Fuzzy
LOGIc,
GENETIC
ALGORITHMS,
SWARM
SIMULATION
AND
THE
MONTE
CARLO
METHOD
TO
MANAGE
MARKET
CHAOS
AND
VOLATILITY
(1994);
BENOIT
B.
MANDELBROT,
THE
FRACTAL
GEOMETRY
OF
NATURE
(2d ed. 1988);
BENOIT
B.
MANDELBROT,
LES
OBJETS
FRACTALS:
FORM,
HASARD
ET
DIMENSION
(3d ed. 1989).
See Edward M. Graham, "Internationalizing" Competition Policy:
An Assessment
of
the Two Main Alternatives in this issue of The Antitrust
Bulletin.
4Frederic Jenny, International Cooperation on Competition: Myth,
Reality and Perspective in this issue of The Antitrust Bulletin.
Graham, supra note 3.
Jenny, supra note 4.
Ministerial
Declaration,
Fourth
WTO
Ministerial
Conference,
Doha, Qatar,
WT/MIN(0l)/DEC/1,
123 (Nov. 14, 2001) (agreeing that
negotiations over such a multilateral framework will take place after the
WTO's
fifth Ministerial Conference, subject to "explicit
consensus"
on
the "modalities
of
negotiations"),
The vertical dimension
l007
lessons derived from the American experience. A leading American
jurist, no slouch on matters
of
antitrust and economic regulation, has
argued that the "experience"
of
other federal systems "may . . . cast
an empirical light on the consequences of different solutions to a
common
legal
problem,"
especially
"the
problem
of
reconciling
central authority with the
need
to preserve
the
liberty-enhancing
autonomy of a smaller constituent governmental entity,"! Other legal
systems facing similar challenges of coordinating competition policy
across internal
jurisdictional
boundaries
often
consult American
precedent.9I shall now endeavor to reverse the flow of legal wisdom
praised by Justice Stephen Breyer. What can American law teach a
broader
world
that
would
emulate
or
evade
our
experience
in
coordinating competition policy across the jurisdictional boundaries
of a federal republic?
The United States has certainly enjoyed great success in exporting
antitrust policy. Much (though by no means all) of global antitrust
policy over the past generation reflects international convergence
toward
greater
acceptance
of
"market-driven
outcomes"
and
"efficiency defenses" that earlier, less economically literate antitrust
enforcers
might have rejected.!?
"[Ijntemational
cooperation on
competition issues" over the past decade has been "characterized by a
higher level of sophistication on economic analysis" and by wider
acceptance
of
"the
notion
that
the
promotion
of
efficiency
and
consumer welfare were fundamental goals of any competition law."ll
To the extent it is truly taking place, such convergence represents a
triumph of the substantive antitrust standards that American law has
Printz
v.
United
States,
521 U.S. 898,
977
(1997)
(Breyer, J.,
dissenting).
9See, e.g., Regina v.
Nova
Scotia
Pharmaceutical
Soc'y,
[1992] 2
S.C.R. 606 (Can.); Peter Herzog, United States Supreme Court Cases in
the Court
of
Justice
of
the European Communities, 21
HAST.
INT'L
&
COMPo
L.
REV.
903 (1998);
Spencer
Weber
Waller, Bringing Globalism
Home: Lessons From Antitrust
and
Beyond, 32 Loy. U.
CHI.
L.J. 113, 120
(2000).
10
II
Graham, supra note 3.
Jenny, supra note 4.

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