Monday, September 19, 2011
Posted by Sandra Marco Colino
Antitrust has gone viral. The rapid emergence of antitrust regimes since the last decades of the twentieth century has raised questions as to the usefulness of the experience of established regimes for budding systems. The ‘copycat’ approach can very quickly be discarded; context matters, and scholars have long stressed the need to consider economic, political, legal and historical factors when regulating competition.1 And just like ‘[a] properly functioning free market system does not spring spontaneously from society’s soil as dandelions spring from suburban lawns’,2 antitrust systems do not miraculously ripen: they require experimenting. Nonetheless, there are obvious benefits in looking at the practice of those that have been experimenting for longer. Despite contextual disparities, many of the challenges faced by recently introduced regimes are likely to have arisen, and been dealt with, in other jurisdictions. Therefore, the temptation to peep at others’ answers is comprehensible and may indeed prove enlightening. Antitrust scholarly writing is useful for unlocking this acquired knowledge. In this context, there is an added value in Crane’s insightful exploration of US antitrust procedure in his book ‘The Institutional Foundations of US Antitrust Enforcement’. Twelve short chapters take the reader on a fascinating journey into the history of the antitrust institutions of one of the oldest competition regimes (part I, chapters 1-4), suggesting ways for optimising their performance (part II, chapters 5-9) and even looking beyond the States at the institutional arrangements of other selected antitrust systems (part III, chapters 10-12).
As Crane himself explains in the introduction, by focusing on institutions (understood as ‘the system’s transsubstantive determinants, their interactions and outputs’, p. xii) and enforcement rather than substance, the book fills a notorious lacuna. It is not that the topic was previously unexplored, but the book is pioneer for its comprehensive coverage. Institutional choices lay down the rules of the game in society,3 and determine the dynamics of antitrust systems around the world.4 In this sense, Crane’s detailed analysis of recurring institutional problems is arguably relevant beyond national borders. Take Asia for instance, where most competition regimes are only just germinating. Some of the local elites are reluctant to succumb to the antitrust trend, as they struggle to understand the merits of introducing restrictions on the freedom of entrepreneurs in the marketplace. In Hong Kong, opposers to the Competition Bill are concerned about the uncertainties businesses will face as a consequence of the Bill’s open-ended provisions. Such a view unduly emphasises the role of the legislator. As Crane explains, ‘highly generalized and open-textured antitrust norms’ are the general rule, and it is for enforcers to subsequently flesh out the details and apply the law to the facts (p. 96).
Even countries that have introduced competition laws are oftentimes still far from ‘institutionalising’ their regimes. The paucity of cases that have prospered in China since the introduction of the Chinese Anti-Monopoly Law is less surprising considering the somewhat wacky ‘tripartite’ institutional framework (pp. 214-217).5 And while it is never easy to predict how adequately institutions will use their enforcement powers,6 the problems of a policy orchestrated by three conductors can be seen in plain sight. A certain parallelism can be drawn between the Chinese system and the institutional arrangements of US federal enforcement, where two agencies co-exist with ‘different but not that different’ powers, as discussed in Chapter 2. Struggling to provide a convincing justification for dual enforcement, Crane concludes that the system may simply not be broken enough to need fixing (p. 48). Later in the book he attempts to provide suggestions for improving dual enforcement (chapter 7). The insistence on the benefits of co-operation between enforcers is of doubtless relevance for any institutionally-complex new regime, as a single (public enforcement) voice is paramount for the development of a coherent policy (pp. 130-131).
A final interesting aspect refers to the politics of antitrust. Many of the problems detected in Asia – from Hong Kong’s resistance to competition law to China’s questionable institutional choices – can be traced back to a strategic, political use of the law not unknown in US history. Much ink has been spilled about to the extent to which political ideologies have played a role in the vigour of antitrust enforcement. The ‘swinging pendulum’ narrative, convincingly questioned by Kovacic,7 is rocked yet again by Crane’s statistically validated study of antitrust’s increasing technocracy (chapter 4). Importantly, he shows that the populist dimension has all but vanished in the US, as the public progressively ‘ceased to view antitrust as a primarily political enterprise, and the political parties saw no gain from attempting to exploit it as one’ (p. 78). Moreover, Crane concludes that there is an acceptance that ‘antitrust is an important but largely technical matter that should be administered vigorously but without great public fanfare’ (p. 86). While such a view may come naturally with the maturity of antitrust systems, for the time being the political visibility of antitrust in Hong Kong continues to prevent the adoption of the law altogether.
Crane’s book is an instant classic; it is a pleasure to read, and remains insightful and incisive throughout. One hopes that the author’s critical analysis and shrewd suggestions are used constructively to their full potential in new jurisdictions for that all-crucial informed antitrust experimenting.
1. HM Hollman and WE Kovacic, ‘The International Competition Network: Its Past, Current and Future Role’ (2011) 20 Minnesota Journal of International Law 274, at 279-280
2. GL Reback, Free the Market! Why Only Government Can Keep the Marketplace Competitive (2009) Penguin
3. DC North , Institutions, Institutional Change and Economic Performance, 3rd ed (1991) Cambridge University Press
4. D Sokol, ‘Antitrust, Institutions, and Merger Control’ (2010) 17 George Mason Law Review 1055
5. EM Fox, ‘Antitrust and Institutions: Design and Change’ (2010) 41 Loyola University Chicago Law Journal 473, at 487
6. Sokol, D. ‘Antitrust, Institutions, and Merger Control’ (2010) 17 George Mason Law Review 1055
7. WE Kovacic, ‘The Modern Evolution of US Competition Policy Enforcement Norms’ (2003) 71 Antitrust Law Journal, 377