Global Antitrust and the Evolution of an International Standard

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ABSTRACT

This Note explores recommendations for developing a global antitrust regime and ultimately rejects those suggestions in favor of more traditional nationally-based applications of antitrust rules. Part II introduces an economic model of global antitrust to show the systemic difficulties inherent in creating a global regime. Part III contrasts the difficulties in creating a global regime with the greater historical success of developing regional antitrust authorities. Part IV tracks the history of the extraterritorial application of antitrust laws by the United States and the European Union. Part V argues that the path to effective global antitrust lies not in the creation of a single global regime, but in the continued extraterritorial application of national antitrust laws and the further creation of regional antitrust regimes.

I. INTRODUCTION

At a conference to celebrate the tenth anniversary of European Union merger regulation, then-U.S. Assistant Attorney General in charge of the Antitrust Division of the Justice Department, Joel Klein, opened a new round in the long push towards coordination of international antitrust efforts by calling for the creation of a global organization similar to the Organisation for Economic Cooperation and Development (OECD) to help coordinate international competition law convergence and enforcement. (1) This declaration signaled a new opening to develop effective international competition law enforcement in an increasingly global business environment, particularly between the European Union and the United States. (2) The plan Klein envisions is a body separate from existing global organizations, though similar in structure to many. (3) His recommendation for a separate body is in direct opposition to proposals made by EU officials to place such an international organization under the auspices of the WTO. (4)

These new attempts mark the sixth major effort to achieve a truly international antitrust regime. (5) Each prior attempt failed to one degree or another. (6) Persuasive commentators have suggested that the primary cause of the past failures has been a difference of expectations on the part of the relevant state actors. (7) Other measures of the failure to achieve effective international antitrust can be seen by contrasting the highly-developed national antitrust schemes with the near-total lack of an effective international antitrust regime. (8)

These failed attempts to standardize international antitrust regimes have taken on multiple hues. Some proposals, like ones that presently exist between the United States and the European Union, call for cooperation between existing national and regional antitrust enforcement authorities. (9) Such agreements call for antitrust authorities to respect the antitrust jurisdictions of competing authorities and, where possible, share information and theories on antitrust liability and enforcement. (10) Other proposals call for coordination of antitrust enforcement among different authorities. (11) For example, the international coordination agency proposed by Klein would aid multiple antitrust authorities in bringing joint antitrust actions against defendants. (12) The most radical solutions call for harmonization of the antitrust laws of different countries. (13) These proposals would require countries to standardize their antitrust laws to a single global norm. (14)

There is a major impetus to develop effective global international antitrust regimes. Primarily, global business organizations have a need for effective global antitrust. (15) The present system, in which global business entities must seek antitrust approval from a variety of enforcement authorities to merge, imposes enormous deadweight costs on these organizations (16) that could be alleviated if there were a global standard for antitrust compliance. (17) Furthermore, these failures in the antitrust arena stand in sharp contrast to more successful efforts to standardize international business law in other areas. …