The Governance of Global Competition: Competence Allocation in International Competition Policy

310 Pages·2008·1.86 MB·English

by  Oliver Budzinski

The Governance of Global Competition

The Governance of
Global Competition
Competence Allocation in International
Competition Policy
Oliver Budzinski
Associate Professor of Economics, Philipps-University of
Marburg, Germany
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
©Oliver Budzinski 2008
All rights reserved. No part of this publication may be reproduced, stored in a
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or photocopying, recording, or otherwise without the prior permission of the
publisher.
Published by
Edward Elgar Publishing Limited
Glensanda House
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Cheltenham
Glos GL50 1UA
UK
Edward Elgar Publishing, Inc.
William Pratt House
9 Dewey Court
Northampton
Massachusetts 01060
USA
Acatalogue record for this book
is available from the British Library
Library of Congress Cataloging in Publication Data
Budzinski, Oliver, 1970–
The governance of global competition : competence allocation in international
competition policy / by Oliver Budzinski.
p. cm.
Includes bibliographical references and index.
1. Competition, International. 2. International economic relations. 3.
Antitrust law—Economic aspects. I. Title.
HF1414.B83 2008
382′.3—dc22 2007039432
ISBN 978 1 84720 630 5
Typeset by Cambrian Typesetters, Camberley, Surrey
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
Contents
List of figures x
List of tables xi
List of abbreviations xii
Foreword xiii
1. Introduction 1
2. Globalisation of competition and business structures 10
1. The internationalisation of business activity and competitive
markets 10
2. The corresponding globalisation of anticompetitive practices
and structures 14
2.1 Anticompetitive arrangements 14
2.2 Predatory practices and abuse of market power 18
2.3 International merger activity 19
2.4 Co-evolution of anticompetitive practices and
competition policy? 25
3. International competition policy between decentralism and
centralism 26
1. The limits of national competition policy regimes in
globalised markets 26
1.1 Does worldwide competition erode the scope for
competition policy? 27
1.2 Can national competition policy cope with worldwide
competition? 32
1.2.1 The inbound focus of national competition
policies 32
1.2.2 Extraterritorial application of competition rules 33
1.2.3 Discretionary bilateral cooperation as an
insufficient supplement 49
1.3 The role of strategic competition policies 53
1.3.1 Instruments of strategic competition policies 54
1.3.2 The economics of the strategic competition
policy dilemma 57
v
vi The governance of global competition
1.3.3 The political economy of real-world strategic
competition policies 61
1.3.4 Do strategic competition policies violate WTO
trade rules? 62
1.3.5 Concluding remarks 64
2. The limits of a uniform worldwide competition policy regime 64
2.1 Supranational governance and national sovereignty 65
2.2 Public choice problems of a uniform regime 67
2.3 Overall adequacy of centralised global competition
governance 70
3. Does competition of competition policy regimes provide
an escape? 72
3.1 Type (I) regulatory antitrust competition via mutual
learning 74
3.2 Type (II) regulatory antitrust competition via
international trade 78
3.3 Type (III) regulatory antitrust competition via
locational competition 79
3.4 Type (IV) regulatory antitrust competition via choice
of law 80
4. Concluding remarks: competence allocation as a problem 82
4. Towards an international multilevel system of competition policies 84
1. The concept of multilevel systems of institutions – general
idea and working properties 84
1.1 Governance concepts between centralism and
decentralism: a brief overview 84
1.2 Multilevel systems and the economics of federalism 88
1.2.1 Introductory remarks on multilevel systems 88
1.2.2 The economics of federalism as a theoretical
foundation for a theory of competence
allocation in multilevel systems 91
1.3 Atheory of competence allocation in multilevel
systems of competition institutions 95
1.3.1 Externalities and spillovers 95
1.3.2 Efficiencies in terms of production, transaction
and administrative costs 103
1.3.3 Preference orientation 104
1.3.4 Agency problems and lobbyism 105
1.3.5 Institutional evolution and adaptability 107
1.4 Criteria for the evaluation of rules for the allocation
of competences 113
Contents vii
2. Existing multilevel competition policy regimes – an
analytical overview 115
2.1 The US antitrust system: ongoing discussion about
federalism? 116
2.2 The EU competition policy system and its reform
dynamics 121
2.3 The WTO competition regime: creating an additional
level of antitrust jurisdiction? 134
2.4 The international competition network: a virtual
global level? 142
2.5 Avenues towards and state of the world competition
order: some brief remarks 148
3. Concluding remarks 149
5. Acomparative analysis of different rules for the allocation and
delimitation of competences 151
1. Design options for rules for the allocation of competences 151
1.1 Stylised rules extracted from existing regimes 153
1.1.1 The effects doctrine 153
1.1.2 Interstate commerce clause, interstate trade
criterion, and community dimension 154
1.1.3 Turnover thresholds 155
1.1.4 Nondiscrimination rule 156
1.1.5 Best practice recommendations and peer
pressure 158
1.2 Stylised rules derived from literature 160
1.2.1 Principle of origin and location doctrine 160
1.2.2 The relevant markets rule 162
1.2.3 X-plus rule 163
1.2.4 Voluntary lead jurisdiction (advanced comity
principle) 165
1.2.5 Mandatory lead jurisdiction 166
2. An institutional-economic analysis of competence-allocating
rules 168
2.1 The effects doctrine 168
2.1.1 Internalisation of external effects 168
2.1.2 Efficiency: economies of scale and the one-
stop-shop principle 169
2.1.3 Preference conformity 170
2.1.4 Minimisation of lobbyism 171
2.1.5 Adaptability 172
viii The governance of global competition
2.2 Turnover thresholds 173
2.2.1 Internalisation of external effects 173
2.2.2 Efficiency: economies of scale and the one-
stop-shop principle 174
2.2.3 Preference conformity 175
2.2.4 Minimisation of lobbyism 176
2.2.5 Adaptability 177
2.3 The nondiscrimination rule 178
2.3.1 Internalisation of external effects 178
2.3.2 Efficiency: economies of scale and the one-
stop-shop principle 179
2.3.3 Preference conformity 180
2.3.4 Minimisation of lobbyism 180
2.3.5 Adaptability 181
2.4 Best practice recommendations and peer pressure 182
2.4.1 Internalisation of external effects 182
2.4.2 Efficiency: economies of scale and the one-
stop-shop principle 183
2.4.3 Preference conformity 184
2.4.4 Minimisation of lobbyism 185
2.4.5 Adaptability 185
2.5 Principle of origin and location doctrine 187
2.5.1 Internalisation of external effects 187
2.5.2 Efficiency: economies of scale and the one-
stop-shop principle 190
2.5.3 Preference conformity 190
2.5.4 Minimisation of lobbyism 191
2.5.5 Adaptability 191
2.6 The relevant markets rule 192
2.6.1 Internalisation of external effects 192
2.6.2 Efficiency: economies of scale and the one-
stop-shop principle 193
2.6.3 Preference conformity 194
2.6.4 Minimisation of lobbyism 195
2.6.5 Adaptability 195
2.7 X-plus rule 196
2.7.1 Internalisation of external effects 196
2.7.2 Efficiency: economies of scale and the one-
stop-shop principle 197
2.7.3 Preference conformity 197
2.7.4 Minimisation of lobbyism 198
2.7.5 Adaptability 199
Contents ix
2.8 Voluntary lead jurisdiction (advanced comity principle) 199
2.8.1 Internalisation of external effects 199
2.8.2 Efficiency: economies of scale and the one-
stop-shop principle 201
2.8.3 Preference conformity 201
2.8.4 Minimisation of lobbyism 202
2.8.5 Adaptability 202
2.9 Mandatory lead jurisdiction model 203
2.9.1 Internalisation of external effects 203
2.9.2 Efficiency: economies of scale and the one-
stop-shop principle 204
2.9.3 Preference conformity 204
2.9.4 Minimisation of lobbyism 205
2.9.5 Adaptability 205
3. Acomparative conclusion 207
3.1 Internalisation of external effects 207
3.2 Cost efficiencies 209
3.3 Preference conformity 210
3.4 Minimisation of lobbyism 212
3.5 Adaptability 213
6. On the appropriate design of an international multilevel
competition policy system 218
1. Elementary features of an international multilevel system of
competition policies 218
2. The fundamental principles of competence allocation 221
3. The levels and their interrelations 223
3.1 The global level 223
3.2 The supranational–regional level 229
3.3 The national level 231
3.4 The subnational–regional level 232
4. Concluding remarks 233
References 238
Index 281