Thursday, September 22, 2022

Competition Law and Supply Chain Resilience

Competition Law and Supply Chain Resilience

Elias Deutscher

University of East Anglia (UEA)



Global value chains are currently experiencing a ‘perfect storm’ triggered by the coincidence of various random events, including the COVID-19 pandemic, the temporary blocking of the Suez Canal by the stranded giant container ship ‘Ever Given’, the congestion of major ports, and the outbreak of the war in Ukraine. All these events have laid bare the degree to which our economies rely on integrated and often vulnerable supply chains that form the neural system of our globalised market economies. Empty supermarket shelves, steep increases in energy prices and the bleak prospect of a global food crisis have led to a widespread awareness of the interdependence and fragility of tightly-knit networks of integrated just-in-time value chains. Against this backcloth, there are mounting calls for a general rethinking of how various economic policies and regulations could foster the resilience of integrated supply chains against exogenous shocks. This paper follows this invitation by exploring whether and how competition law – i.e., the prohibition of anti-competitive agreements, the abuse of monopoly power and anticompetitive mergers – could contribute to greater supply chain resilience. It thereby makes three contributions. First, the paper seeks to clarify the notion of value chain resilience and its relationship with competition. It thus addresses the fundamental question of whether competition is conducive or detrimental to supply chain resilience. Second, the paper maps four avenues through which competition policy can promote the shoring up of international supply chains. Third, the paper identifies a number of filters to incorporate concerns about supply chain resilience into competition law analysis. The paper thus lays down the conceptual foundations and pathways for a nascent research agenda on competition (law) and resilience.

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