What is Competition? A Comparison of U.S. and European Perspectives

• Author: William J. Kolasky
• Published date: 01 March 2004
• Date: 01 March 2004
• DOI: http://doi.org/10.1177/0003603X0404900102
• Subject Matter: Antitrust in the U.S. and the EU: Converging or Diverging Paths?

The Antitrust Bulletin/Spring-Summer 2004

What is competition? a

comparison oflJ.S. and European

perspectives

BY WILLIAM J. KOLASKY*

I.

Introduction

29

During the year and a half that I served as Deputy Assistant Attorney

General for International Enforcement in the Antitrust Division of the

U.S. Department

of

Justice, the Division undertook two major

initiatives designed to promote greater international convergence and

cooperation in the enforcement of competition

law-the

formation of

a new International Competition Network (ICN) and the strengthening

of

the bilateral relationship

between

the United States and the

European Union (EU). The Division made more progress in both

areas than any thought possible when it began. The ICN is not only up

and running,

but

is already

serving

as an

important

force

for

international cooperation and convergence and the relationship

between

the

United

States

and

Europe,

despite

occasional

disagreements, is stronger than ever. The European Commission and

the Antitrust Division worked closely together in launching ICN and

making it a success. The bilateral U.S.IEU joint merger working

group has stepped up its activities and now meets regularly to discuss

important issues of common concern. Based on this group's work, a

*

Co-chair

of

the Antitrust and

Competition

Practice

Group at

Wilmer Cutler &Pickering.

©2004by Federal Legal Publications,Inc.

30 The antitrust bulletin

new set

of

best practices for coordinating merger reviews was released

in October 2002. 1

Until recently, efforts in the international area have been largely

devoted to institution- and relationship-building and to improving the

processes for merger review. In going forward, attention needs to

tum

more to the substance

of

the antitrust laws and to strengthening the

analytical framework used to enforce those laws. And that is the focus

of this article.

I will begin by discussing the purposes

of

competition policy. In

the United States, antitrust practitioners like to say that the purpose of

the antitrust laws is to protect competition, not competitors. This

principle has now become such acentral part

of

American antitrust

jurisprudence that it is taken for granted. However, it is surprising to

find

that

this

principle

does

not

resonate

quite

the

same

way in

Europe. When Isuggested in London in May 2002 that it be used as a

guiding

principle

for

sound

competition

policy.?

a

European

competition official responded that it seemed an empty slogan, devoid

of

content.

And

in

the

debate

over

GE/Honeywell,

Commission

officials

treated

this principle as more

of

aparadox, arguing

that

without competitors, there

can

be no competition.! These reactions

underscore the need for a better explanation

of

this principle in order

to

persuade

others

to

apply

it in

designing

and

enforcing

their

competition laws. That cannot be done without first defining what is

meant by "competition."

U.S.-EU

MERGER

WORKING

GROUP,

BEST

PRACTICES

ON

COOPERATION

IN

MERGER

INVESTIGATIONS,

available at http://www.usdoj

.gov/atr/public/international/docsl200405.htm.

2

William

1.

Kolasky,

North

Atlantic

Competition

Policy:

Converging

Toward

What?,

Address

at

the

British

Institute

of

International

and

Comparative

Law

Second

Annual International and

Comparative

Law

Conference

(May

17,

2002)

(transcript

available

on

U.S.

Department

of

Justice

Antitrust

Division

Web

site,

www.usdoj.gov/atr/).

3

Gotz

Drauz,

Unbundling

GE/Honeywell:

The

Assessment

of

Conglomerate Mergers Under EC Competition Law, 2001

FORDHAM

CORP.

L.

INST.

183,

197-98

(B. Hawk ed., 2002).