Thursday, December 10, 2009
Posted by D. Daniel Sokol
Michal Gal (Haifa - Law) has an interesting new paper on Regional Competition Law Agreements: An Important Step for Antitrust Enforcement.
ABSTRACT: In the past two decades the number of jurisdictions that adopted a competition law has grown exponentially. Yet many of them, most notably developing jurisdictions and small ones, face significant obstacles to efficient enforcement. Indeed, a World Bank study estimated that competition authorities in advanced countries are 40% more effective than their counterparts in developing ones. Many of these problems result from the unilateral enforcement model which currently dominates competition law.
This essay argues the regional competition law agreements on joint enforcement and advocacy (RJCAs) hold an important potential to solve many of the enforcement problems that developing and small jurisdictions face and can provide additional benefits that go beyond such solutions. It also argues that the costs involved in such agreements are not prohibitive and many can be overcome by structuring appropriate solutions. Accordingly, RJCAs hold the potential to create Pareto-superior solutions to enforcement problems relative to unilateral enforcement.
The essay then broadens the analysis and focuses on the potential effects of RJCAs on non-member states. It is argued that such agreements create much lower negative externalities on non-member states and on international coordination efforts than do regional trade agreements. On the contrary- they often create positive externalities on non-member jurisdictions. Accordingly, they offer an important potential for strengthening competition law enforcement and should generally be encouraged.
Finally, it argues that RJCAs generally further the international efforts for coordination and cooperation in competition law. They might even serve to overcome the main obstacle for including anti-cartel provisions in the WTO or in another supranational enforcement body.
The analysis is timely, given that the past few years have experienced a wave of regionalism which is not only characterized by an increased dynamism but is also often characterized by more ambitious and deeper levels of integration, taking steps that go beyond information sharing and comity. Not surprisingly, all of the new regional agreements involve developing or small signatories.