Saturday, December 11, 2010
Posted by D. Daniel Sokol
Alan Riley (City Law School) has posted EU Competition Policy in 2025: A Vision of an European Internationalist Future?
ABSTRACT: This is a view of future EU competition policy through looking at the way cases could be decided taking into account current trends.
I would argue that there are three trends that are already making themselves felt. The first is the dominance of the European model of antitrust over that in the United States. Articles 101 and 102 as well as the Merger Regulation are overwhelmingly the antitrust models adopted by the world's competition agencies. As major antitrust regimes develop around the world the impact of that choice will become much more pronounced. Antitrust agencies will look first to European case law and procedures and not to the United States. This will provide DG Competition with the potential of obtaining enormous influence and "soft power" across the globe. However, for that influence to be maximized, DG Competition has to be ready to learn and adapt to what will be increasingly intellectually sophisticated and original centers of antitrust thought located far from Europe.
Furthermore, the failure of the U.S. economic model and the limitations of the classic Chicago School in antitrust economics are likely to further boost that influence. I personally doubt that we will have the development of a neo-ordo liberalist school in Europe, but we are likely to end up with a broader antitrust assessment standard. That standard is likely to include assessments as to supply security and systemic risk as well as a greater concern for the social impact of competition. The European Union case law, being far less fixated on Chicago economics and with an alternative quasi-ordo liberalist narrative within its case law to draw upon, will be able to more easily respond to the intellectual and economic challenges of the twenty-first century.
The second major trend is international co-operation. As more sophisticated antitrust agencies develop in the major twenty-first century centers of business in and beyond Brazil, Russia, India, and China ("BRICS"), international co-operation will become a dominant feature of major antitrust cases. International co-operation is, of course, already a feature of many merger and cartel cases. However, for the moment there are very few really significant international co-operation procedures. What is likely to happen over the next 15 years is that those procedures will develop, permitting greater direct co-operation in cartel cases, joint remedies in merger cases and case selection, and prosecution delegation in abuse of dominance cases.
The third major trend will be the adoption of quasi-criminal procedures in price-fixing cases. This will be in part because of the demand for corporate executives to be held personally accountable and in part because of the European Court of Human Rights ("ECHR") standards imposed by the Lisbon Treaty. Despite the corporate demands for greater ECHR compliance the irony is that the greatest victor out of a more quasi-criminal procedure is the Commission. Notwithstanding Commissioner Kroes' tenure, DG Competition underplays its hand in relation to price-fixing cases by running the cases behind closed doors. A quasi-criminal procedure would open up the cases to the public, increasing public understanding and support for DG Competition (and probably generating political careers for some DG Comp officials). It would also make guilty settlement pleas the majority choice of most corporate price-fixers as only the most desperate firms would choose a public trial.
Below I have not mentioned damages actions. This is because I am focusing on DG Competition's operations. Nevertheless, one of the major trends of the next fifteen years will be the development of antitrust damages litigation in all the major centers of antitrust practice across the planet. By 2025 a damages litigation culture is likely to have made itself felt in Europe, and will be beginning to appear in other major jurisdictions. In Europe by 2025 one would expect a number of centers to be established with a functioning antitrust litigation bar such as Amsterdam, London, Warsaw, Istanbul and Dusseldorf-and almost all major antitrust cases to have a significant damages component.