Academic journal article Vanderbilt Journal of Transnational Law

Capturing the Transplant: U.S. Antitrust Law in the European Union

Academic journal article Vanderbilt Journal of Transnational Law

Capturing the Transplant: U.S. Antitrust Law in the European Union

Article excerpt

ABSTRACT

The scholarly literature on the movement of legal norms focuses almost exclusively on transfers from one jurisdiction to another. It largely ignores transfers into new regulatory regimes. Drawing on a case study of the transplantation of U.S. antitrust law into the nascent entity that was to become the European Community, and analyzing its evolution from a public choice perspective, this Article suggests that transfers into new regulatory regimes are more likely to be effective when the lack of established institutions creates opportunities for stakeholders. The endorsement of a new law will enable stakeholders to influence its application and to capture positions of the regulatory agency in charge of its administration. An enhanced understanding of this transplant and the impact of a German stakeholder on the development of EU competition law explains why, if today the European Union and the United States investigate the same transaction, the competition law standards set by the European Union will prevail.

TABLE OF CONTENTS

I.   INTRODUCTION

II.  CAPTURING LEGAL TRANSPLANTS

     A. Transplants into New Regulatory
       Regimes
     B. The Role of Stakeholders

III. THE CASE STUDY: U.S. ANTITRUST IN EUROPE

     A. The Harvard School and
        Structuralism

     B. Europe and the Ordoliberal School

     C. Capturing the U.S. Antitrust
        Transplant

IV.  TODAY'S DIVERGENCE AND PROTECTIONISM
     IN THE EUROPEAN UNION

V. CONCLUSION

I. INTRODUCTION

The wave of regional and global economic integration that started in the 1950s with the formation of the European Community (EC) called for the definition of supranational rules and policies to regulate trade in newly integrated markets. (1) Key among these policies was the promotion of a competitive market, which promised to attract capital inflows and spur economic growth. Familiarity with competition law was, however, not widespread when the integration movement started, and the negotiators of the newly formed EC had to refer to the U.S. example, the only country that had a comprehensive system of competition law in place at the time. (2) The U.S. Sherman Act thus became a model for the competition laws of the European Coal and Steel Community (ECSC), the entity that laid the foundations for the EC. (3) The definition of new rules through transfers or imitation is by no means a new phenomenon in the scholarship on integration, convergence, and, more generally, the movement of legal norms, but this Article explores a different and underestimated angle of this literature: the transfer of rules into new regulatory systems. (4) Drawing on the transfer of U.S. antitrust law to the EC, this Article asks--how are transfers to new regulatory regimes different? How is this difference relevant to the globalization of competition? To what extent did U.S. antitrust law influence the formation of competition policies in the European Union?

These questions have become more and more relevant since European antitrust authorities began making it increasingly difficult for U.S. firms to operate in Europe. Over the past decade, the European Commission has fined Microsoft more than $3 billion and ordered the company to change the products it sold in Europe in response to its antitrust abuses, even though U.S. authorities had previously cleared such behavior. (5) Similarly, the European Commission accused Google of abusing its dominance in the online search market. (6) Whereas the U.S. Federal Trade Commission (FTC) dropped its charges against Google in 2013, the Commission's investigation is ongoing, and it is causing much agitation in Congress, since a recent resolution by the European Parliament called for the "unbundling [of] search engines from other commercial practices." (7) This would require Google to split its operations, which would fundamentally alter the way Google operates in Europe as well as worldwide. (8) The regulatory leverage that European competition law is exerting on the companies that come under its jurisdiction, including U. …

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