Competition Law and Economic Regulation: Making and Managing Markets

394 Pages·2015·1.821 MB·English

by  Niamh Dunne

COMPETITION LAW AND ECONOMIC
REGULATION
Niamh Dunne undertakes a systematic exploration of the relationship
betweencompetitionlawandeconomicregulationaslegalmechanismsof
market control. Beginning from a theoretical assessment of these legal
instruments as discrete mechanisms, the author goes on to address
numerousfacetsofthesubstantiveinterrelationshipbetweencompetition
law and economic regulation. She considers, amongst other aspects, the
concept of regulatory competition law; deregulation, liberalisation and
‘regulation for competition’; the concurrent application of competition
law in regulated markets; and relevant institutional aspects including
marketstudyprocedures,thedistributionofenforcementpowersbetween
competitionagenciesandsectorregulators,andcertainlegalpowersthat
demonstrate a ‘hybridised’ quality lying between competition law and
economic regulation. Throughout her assessment, Dunne identifies
andexploresrecurrentconsiderationsthatinformandshapetheoptimal
relationshipbetweentheselegalmechanismswithinanyjurisdiction.
niamh dunne isalecturerinLawatKing’sCollegeLondon.

COMPETITION LAW AND
ECONOMIC REGULATION
Making and Managing Markets
NIAMH DUNNE
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©NiamhDunne2015
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Firstpublished2015
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LibraryofCongressCataloging-in-PublicationData
Dunne,Niamh,1984-author.
Competitionlawandeconomicregulation:makingandmanagingmarkets/NiamhDunne.
pagescm
Includesbibliographicalreferencesandindex.
ISBN978-1-107-07056-1(Hardback)
1.Competition,Unfair. 2. Competition,Unfair–UnitedStates. 3. Competition,
Unfair–EuropeanUnioncountries. 4. Antitrustlaw. 5. Antitrustlaw–UnitedStates.
6. Antitrustlaw–EuropeanUnioncountries. I. Title.
K3850.D862015
343.2407023–dc23 2014042970
ISBN978-1-107-07056-1Hardback
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CONTENTS
Acknowledgements page ix
Tables of cases xi
1 Introduction 1
I. Marketfailureandthepursuitofefficiency 6
II. Mechanismstoaddressmarketfailure(I):theconceptof
competitionlaw 14
(i) Theoriesofcompetitionandmonopoly 14
(ii) Thestructureofcompetitionlaw:theUSandEUsystems
ofcompetition 18
(iii) Thegoalsofcompetitionlaw:outcomesorprocesses? 26
III. Mechanismstoaddressmarketfailure(II):theconceptof
economicregulation 33
IV. Acomparisonofcompetitionlawandregulation 41
V. Conceptualisingtheinterfacebetweencompetitionlawand
regulation 48
(i) Competitionlawandregulationassubstitutes 49
(ii) Competitionlawandregulationascomplements 54
VI. Theinterfaceinpractice:theevolutionofUS
telecommunicationsregulation 60
VII. Concludingremarks 65
2 Competition law as regulation 69
I. Competitionlawassubstitutionaryorgap-fillingregulation 71
II. Doctrinalregulatorycompetitionlaw:proceduralandsubstantive
dimensions 78
(i) Distinguishingregulatorycompetitionlawfromcompetition
law’sestablishedcore 79
a. Administrative/technocraticenforcement 79
b. Exanteenforcement 81
c. Prescriptivecompetitionlawdoctrines 82
v
vi contents
d. Regulatoryremedies 83
e. Mandating‘best’solutions 84
f. Regulatorycompetitionlaw:jurisdictionalvariations 86
(ii) Theprosandconsofregulatorycompetitionlaw 87
a. Separationofpowers 89
b. Legitimacyandtheruleoflaw 91
c. Errorcostsandbadbargains 93
d. Politicisation 95
e. Assessingtheprosandconsofregulatory
competitionlaw 96
III. Proceduralregulatorycompetitionlaw:negotiatedsettlements 97
(i) TheAmericanexperience:consentdecreesinUSantitrust 98
a. Thenatureofconsentdecrees:accommodating
bargains,noveltyandregulation 102
(ii) CommitmentdecisionswithinEUcompetitionlaw 108
a. CommitmentdecisionsandpolicymakingintheEU
energysector 112
(iii) Negotiatedsettlementsasregulation:acriticalassessment 116
IV. Doctrinalregulatorycompetitionlaw:excessivepricesand
essentialfacilities 119
(i) Excessivepricesundercompetitionlaw 120
a. Antitrustapproachestoexcessiveprices:theapparent
US/EUdichotomy 123
b. Excessiveprices,regulationandtheroleofcompetition
authorities 127
(ii) Theessentialfacilitiesdoctrine 129
V. Conclusions 136
3 Regulation, deregulation and the space for
competition law 139
I. Regulationabsentcompetitionlaw 141
II. Critiquesofregulation–thepublic-choicemovement 143
III. Publicchoiceinpractice:deregulationandprivatisation 146
(i) Deregulationinpractice:theUSandUKexperiences 151
(ii) Deregulationandtheroleofcompetitionlaw 155
IV. Reformingregulation:‘betterregulation’ 161
(i) Betterregulationandtheroleofcompetitionlaw 168
V. Regulation’ssubstantivecore:non-economicvaluesand
structuralinefficiency 173
(i) Distributionaljusticeandothernon-economicvalues 174
(ii) Structuralmarketinefficiency 175
contents vii
(iii) Regulatinginlieuofantitrust:theEURoamingRegulation 179
VI. Conclusions 185
4 Concurrent application of competition law and regulation187
I. Conceptualisingconcurrency 188
(i) Concurrentapplicationofcompetitionlawinregulated
markets:conceptualissues 188
(ii) Competitionproblemsinregulatedmarkets:theexampleof
marginsqueeze 191
(iii) Concurrency:conceptualapproachesandcriteriafor
application 193
II. Concurrencyinpractice:TheUSandEUlawpositions 198
(i) USantitrustandstateregulation:thesignificanceof
sovereignty 199
(ii) USantitrustandfederalregulation:substance-andpolicy-
focusedapproaches 203
a. Theconventionalapproach:apresumptionof
concurrency 203
b. Fromconcurrencytowardspreclusion:theTrinko
andCreditSuissedecisions 205
c. Aholisticapproachtoconcurrencyandcritiquesofthe
newdirection:thedecisioninTownofConcord 209
(iii) ConcurrentapplicationunderEUlaw:prioritising
effectiveness,compromisinglegitimacy? 212
a. ConcurrentapplicationofEUcompetitionlawand
regulation:generalprinciples 212
b. Concurrency:theEUconstitutionaldimension 214
c. Concurrencyand‘Stateaction’inEUlaw 215
d. TheEUapproach:analysisandcritique 221
(iv) Analysis:differingapproachestoconcurrentapplicationin
practice 227
III. Theparametersofconcurrency:economic,rule-of-lawand
institutionalconcerns 228
(i) Analyticalandeconomicconcerns 228
a. Accountingfortheimpactofregulationonmarkets
andbehaviour 229
b. Risksofcompetitionenforcement:falsepositivesand
inefficientoutcomes 232
c. Duplicationofmarketsupervisoryfunctions 234
(ii) Rule-of-lawconcerns 236
(iii) Institutionalconcerns 243
a. Privateenforcement 243
viii contents
b. Remedies 246
IV. Marketcircumstanceswhereconcurrencyarises:policy
implications 251
(i) Unrelatedcompetitionabusearisinginregulatedmarkets 252
(ii) Regulationinpursuitofnon-economicgoals 254
(iii) Brokenregulation:designinefficiencyorregulatorycapture 256
(iv) Regulatorygaming 258
V. Conclusions 261
5 Institutional issues at the interface of competition law
and regulation 263
I. Allocationandsharingofpowersbetweenpublic-enforcement
agencies 264
(i) TheUKmodel:concurrentcompetitionenforcementby
regulators 267
(ii) TheAustralianmodel:anantitrust‘super-regulator’ 272
(iii) Resolvingconflictswithintheconventionaldivision
oflabour 275
II. Institutionalgatewaystocompetitionlawandregulation(I):
marketstudies 279
(i) SectorinquiriesintheEuropeanUnion 280
(ii) MarketinvestigationreferencesbytheUK’sCompetition
andMarketsAuthority 285
a. TheBAAairportsinquiry 290
(iii) Marketstudies:analysisandconcludingremarks 293
III. Institutionalgatewaystocompetitionlawandregulation(II):
‘hybridisation’ 294
(i) Concretisingcompetitionprinciples:accesstoinfrastructure
regulation 296
(ii) Section5oftheFederalTradeCommissionAct 304
IV. Conclusions 314
6 Analysis and conclusions 316
I. Thecentralroleoftheconceptofcompetitionlaw 319
II. Delimitingtheinterfacebetweencompetitionlawandregulation:
recurringissues 327
(i) Generalwelfareversusindividualrights 328
(ii) Theroleofefficiency 329
(iii) Democraticaccountabilityversuspoliticalinterference 330
III. Concludingremarks 332
Bibliography 335
Index 360