The purpose of competition laws is to secure a
competitive marketplace and thus protect the consumer
from unfair, anti-competitive practices. The latter tend to
increase prices and reduce the availability and quality of
goods and services offered to the consumer.
Such state intervention is usually done by establishing a
governmental Authority with full powers to regulate the
markets and ensure their fairness and accessibility to new
entrants. Lately, international collaboration between such
authorities yielded a measure of harmonization and
coordinated action (especially in cases of trusts which are
the results of mergers and acquisitions).
Yet, competition law embodies an inherent conflict: while
protecting local consumers from monopolies, cartels and
oligopolies - it ignores the very same practices when
directed at foreign consumers. Cartels related to the
country's foreign trade are allowed even under
GATT/WTO rules (in cases of dumping or excessive
export subsidies). Put simply: governments regard acts
which are criminal as legal if they are directed at foreign
consumers or are part of the process of foreign trade.
A country such as Macedonia - poor and in need of
establishing its export sector - should include in its
competition law at least two protective measures against
these discriminatory practices:
1. Blocking Statutes - which prohibit its legal entities
from collaborating with legal procedures in other
countries to the extent that this collaboration
adversely affects the local export industry.
2. Clawback Provisions - which will enable the local
courts to order the refund of any penalty payment
decreed or imposed by a foreign court on a local
legal entity and which exceeds actual damage
inflicted by unfair trade practices of said local
legal entity. US courts, for instance, are allowed to
impose treble damages on infringing foreign
entities. The clawback provisions are used to battle
this judicial aggression.
Competition policy is the antithesis of industrial policy.
The former wishes to ensure the conditions and the rules
of the game - the latter to recruit the players, train them
and win the game. The origin of the former is in the 19th
century USA and from there it spread to (really was
imposed on) Germany and Japan, the defeated countries in
the 2nd World War. The European Community (EC)
incorporated a competition policy in articles 85 and 86 of
the Rome Convention and in Regulation 17 of the Council
of Ministers, 1962.
Still, the two most important economic blocks of our time
have different goals in mind when implementing
competition policies. The USA is more interested in
economic (and econometric) results while the EU
emphasizes social, regional development and political
consequences. The EU also protects the rights of small
businesses more vigorously and, to some extent, sacrifices
intellectual property rights on the altar of fairness and the
free movement of goods and services.
Public-domain text, read in full here on John Shaqi.
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