Summary And Policy Proposals

Author:Damien Geradin
Profession:Professor of Law at the University of Liège and Director of the Global Competion Centre

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Competition law has witnessed an enormous growth these last two decades and today a large number of countries have adopted competition law regimes. Such competition laws have often resulted from regulatory transplants. Through the accession process, as well as the Association Agreements with third countries, the European Commission has managed to extend the sphere of application of EC competition rules to a large number of nations. Some argue that today EC competition law is the dominant model of competition law in the world.

The adoption of competition law regimes can be beneficial to developing and emerging economies. However, such economies generally present characteristics that differentiate them from industrialized countries. The development of competition law regimes in emerging economies is a process that should be engaged into with great care. Because of the limited institutional endowment of these countries, such regimes should avoid provisions giving large discretionary powers to the enforcement authorities or that require these authorities to make extremely complex assessments. An incremental approach whereby emerging economies first apply competition law provisions dealing with the most blatant anticompetitive practices (such as cartels and abuses of a dominant position), while leaving more sophisticated processes (such as merger control) to a later stage, is advisable.

In the Southern Mediterranean countries, competition law has advanced on several fronts. First, countries such as Cyprus, Malta, and Turkey, which are candidates to join the EU, have had to transpose EC competition rules into their domestic legal order as part of the accession process. The transposition of the EC competition law has generally been satisfactorily completed and these candidate countries now have strict and coherent competition laws, and well functioning competition authorities. The accession process has proved a very effective tool in promoting the development of competition law regimes in the candidate countries. Second, the EC signed with non-candidate MPs Association Agreements containing competition law provisions that are patterned on the competition rules of the EC Treaty. Several factors, such as the lack of implementation measures, have, however, limited the effectiveness of such rules in controlling anticompetitive practices affecting trade between the EC and the MPs. Third, some non-candidate MPs have spontaneously adopted Page 84 competition laws and created competition authorities. While in some countries, such as in Israel, these laws have proven effective in challenging anticompetitive practices, in many MPs, domestic competition laws have been poorly implemented and have failed to discipline market actors.

In some policy documents, the Commission has expressed its desire to strengthen the competition law regimes of the non-candidate MPs through a process of regulatory convergence. What the Commission seems to encourage is the progressive approximation of the competition rules of the MPs with EC competition rules. Regulatory...

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