Monday, August 16, 2010

Cruz on Global Competition: Law, Markets and Globalization

Posted by M. Elina Cruz

David Gerber's book begins by discussing the uprising and downfall of several projects that proposed the implementation of a global competition law framework. Certainly, if this were any ordinary work, the reader (interested in competition law) might feel discouraged to keep reading. Except- there is nothing ordinary or common about Global Competition: law, markets, and globalization. The book transforms the failed attempts made to achieve a global competition law, into lessons to be learned and -by the last chapter- a particularly cynical reader of global law (such as myself) finds that there is not only hope- but a clear pathway to achieve the goal of having a global competition framework.

As an academic in competition law from a developing country, from the team of the "other players”, identified by the author- one of the first ideas that caught my attention was the horizontal versus vertical approach towards globalization of antitrust. As explained in the book, Latin America has been one of the examples of verticality, in the sense that we have received a strong influence from US competition law into our legislations. In this regard, Gerber proposes a more egalitarian design of global competition law: a process in which the US and the EU are essential, but not necessarily imposing the particular characteristics of their experiences. I believe this view is consistent with the fact that in developing countries (as well as developed) the value of competition sometimes needs to be balanced with other relevant goals. Additionally, in general, there is a lack of awareness of the importance and benefits of competition law in developing countries, so proposing a global approach poses a harder challenge.

Another important issue discussed in this book is that global competition law -achieved either through convergence, agreements or pathways- requires not only the text of competition law as a common denominator, but also that the implementation of such law must be similar throughout the world. Gerber’s pathway concept is built on having the same set of objectives, designing the steps towards these objectives and acquiring an obligation to follow these steps. In connection to this point, it is important -for the sake of the debate- to note that the “implementation step” (or obligation to follow the steps in the case of a pathway) is not always easy, particularly in Latin America. At least in this region of the world, as Sokol as shown[1], competition clauses contained in multilateral or bilateral agreements are usually not followed or applied (unlike the treaty itself). A challenge remains as to investigate the reasons that explain this unenforceability.

Gerber’s book is not only an excellent work by itself, but also leads the way to discuss new ideas related to the goal of having global competition law. In this sense, it is interesting to note that the verticality (referred to above) has now merged into each country’s tradition and culture. This is shown in the fact that verticality between the US and Latin America is really an influence of common law over civil law jurisdictions, producing unexpected outcomes in the legal landscape of countries in which case-law has no value given by legislation. The reception of US competition law has created “common law oasis”, where previous decisions are relevant for future decisions (unlike other fields of the law), but where these decisions have to be coherent with a civil law system. This is yet another proof that competition law can break national barriers, even differences between common law and civil law jurisdictions.    

The last paragraph of the book reads “The development of legal regime capable of effectively combating anti-competitive conduct of global markets may be a key to two central challenges of the twenty-first century -achieving and maintaining economic prosperity and harnessing prosperity in ways that foster the development of human capacities and freedoms everywhere[2].  And for once, as a reader, I have to say I completely agree. Moreover, I strongly recommend this work to academics, practitioners and anyone interested in competition law, especially those who –like me- had already started to lose faith on international solutions for international issues.

[1] Order without (Enforceable) Law: Why Countries Enter into Non-Enforceable Competition Policy Chapters in Free Trade Agreements. D. Daniel Sokol. Chicago-Kent Law Review, Vol. 83, 2008


[2] Page 345

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