Wednesday, November 5, 2008
The Democracy of Competition - EC (Competition) Law and the Fine Line between Markets, Public Interests and (Self-)Regulation
Posted by D. Daniel Sokol
Hans Vedder of University of Groningen discusses The Democracy of Competition - EC (Competition) Law and the Fine Line between Markets, Public Interests and (Self-)Regulation in his latest working paper.
ABSTRACT: The EC and it's Member States struggle to draw the line between markets and public interests. Traditionally, these two are contrasted, most prominently by the continental Member States and followed by a conclusion that public interests require public governance. Some of this public governance takes the form of a public law framework within which self-regulation by the members of a profession occurs. We also see a more subtle version of self-regulation, whereby regulators are so dependent on specific information from the professions concerned, that they effectively become captive regulators. In those circumstances, the degree to which the public interest, rather than the interest of the professions concerned, is actually served may be doubted.
This holds true even more where legislators, both at the EC and the Member State level, are moving the line between markets and public interests towards the market side. It is uniformly recognised that public governance is not the blanket solution for market failures and the introduction of market mechanisms may actually increase consumer welfare. The contrast between public interests and markets may therefore also be rephrased into a citizens versus consumers antithesis. EC (competition) law plays a prominent role in this debate in that it requires member state regulators to rethink how and to what extent their actions serve the public interest. This role of EC (competition) law requires a fundamental rethinking of the market (consumer) and public interest (citizen) antithesis. The hypothesis central to this paper is that EC (competition) law can serve as a democratic instrument to increase legitimacy whilst refining the line between markets and public interests.