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Source link: http://archive.mises.org/5110/the-culture-of-competition/

The culture of competition

May 30, 2006 by

Earlier this month, the Federal Trade Commission and Justice Department organized the fifth annual conference of the International Competition Network, a mini-UN for unelected antitrust regulators and their supporters in academia and the private antitrust bar. According to Thomas Barnett, the head of the DOJ’s Antitrust Division, the ICN’s objective is “substantive convergence” among regulators, meaning that all nations adopt U.S. and European Union-style antitrust laws. The ICN “support[s] new antitrust agencies both in enforcing their laws and in building strong competition cultures in their countries.”

A sample of the ICN’s work is a paper presented at this year’s conference by the “Competition Policy Implementation Working Group” dealing with the experiences of “young competition agencies.” The first problem identified by the working group was “inadequate legislation.” Unelected bureaucrats complaining about a lack of empowerment by elected legislators is hardly new, but it takes a certain level of arrogance to have a U.S.-led group come in and do the complaining for you.Most of the “inadequate legislation” complaints simply translate to “foreign legislatures haven’t passed antitrust laws identical to those in the U.S. and EU.” Among the more troubling statements, the working group said, “the Bulgarian Commission for Protection of Competition (CPC) had no competency to use dawn raids in its investigations.” The CPC also could not impose “pecuniary sanctions” without going to the country’s Supreme Administrative Court, which the ICN considered inadequate.

Other examples of “inadequate legislation” included:

  • Private companies in Tunisia were “reluctant to introduce cases”;
  • Belgium’s Competition Council was reviewing too many mergers, thus preventing investigations of “anti-competitive behavior”;
  • Armenian regulators found it too difficult to collect necessary information about private companies;
  • “Loopholes” prevented the Netherlands Competition Authority from raiding private homes; and
  • The Jamaican Court of Appeal limited the ability of that country’s regulator “to investigate and hear matters in a quasi-judicial capacity.”

Thankfully, the working group said, these “inadequacies” were being addressed through proposed or enacted legislation in the various countries.

Inadequate legislation is only part of the problem, however. The working group also identified “untrained judiciary” as a barrier to international antitrust convergence. This problem was being addressed largely by employing U.S. and European experts. The working group singled out several countries for praise in this respect, such as Jamaica:

The Jamaican Competition Authority has developed a fairly sustained programme of training the officers of the local judiciary. On the very first occasion its training for judges took the form of a lecture presentation by Professor Richard Whish [Kings College, London], Competition Law and Policy, scholar and author. This represented the inauguration of the Shirley Playfair Lecture Series; and was an exclusive affair. The public was not invited. The presentation explored the concepts of market definition and dominance. In 2004 Judge Diane Wood, Circuit Judge of the US Court of Appeals for the Seventh Circuit, conducted a two-and-a-half day Workshop for six members of the judiciary. Attempts are now being made to have the programme continued. (Emphasis added.)

U.S. taxpayers often foot the bill for these “workshops.” In 2002, the U.S. Agency for International Development said that it had spent $86 million to promote antitrust policy as part of President Bush’s trade agenda. That year, USAID bankrolled a five-part junket for FTC and DOJ lawyers to train antitrust regulators in South America—among the invited participants were agents of Venezuelan President Hugo Chavez. Ironically, the first seminar’s topic was “abuse of dominance.”

The final problem identified by the ICN was a “lack of a competition culture” in emerging markets. This culture has nothing to do with satisfying customer demands or promoting economic growth, however, but with protecting the total authority of unelected government regulators:

A culture of competition among stakeholders and the wider business community is necessary for the effective enforcement and promotion of competition law and policy. A culture of competition in this context refers to the awareness of, the business community, governmental agencies, non governmental agencies, the media, the judiciary, and the general public, of the rules of competition law, and their overall responsibility to ensure that such rules are observed in the interest of competition and overall economic development. For example Competition authorities depend on a continuous supply of evidential and supporting information to expose and make determinations with regard to the effect of certain business practices on domestic competition. Only a knowledgeable and aware community will provide such cooperation. The lack of such a culture has plagued practically all young agencies.

The next ICN conference will take place in Moscow. One wonders about the “competition culture” in that state.

{ 3 comments }

Artisan May 30, 2006 at 4:14 pm

I find that quite ironical, because if the government truly realizes one day that the problem of anti-trust regulation is the lack of competition culture… it may well die off naturally.

By the way, I don’t understand quite the logic behind a sentence like
Belgium’s Competition Council was reviewing too many mergers, thus preventing investigations of “anti-competitive behavior”

Skip Oliva May 30, 2006 at 5:06 pm

By the way, I don’t understand quite the logic behind a sentence like Belgium’s Competition Council was reviewing too many mergers, thus preventing investigations of “anti-competitive behavior”

The ICN report said that because the threshold for advance reporting of mergers was “too low” in Belgium, the Competition Council had to devote most of its resources to reviewing these deals rather than investigating non-merger activities that “restrain trade.”

quincunx May 30, 2006 at 7:57 pm

So stupid…it makes my head hurt.

Aside from the fact that anti-trust laws are anti-competitive – you’d think the international competition network would figure out that having ONE international competition network is: anti-competitive. What do you call an anti-competitive competition network trying to impose coordinated anti-competitive action?

Damn the inadequate legislation in the Netherlands. How can we get our job done if we can’t raid peoples’ homes? We don’t want a monopoly on having sofas and TVs in the same room.

How many of these inadequate leg. countries have better competition than the US? Why was this question never addressed? Yes, I know, I know – it’s just a waste of taxpayer money for power.

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