Competition Law and Globalisation: Uniformity or Convergence, Networking or State Sovereignty?

• Jurisdiction: South Africa
• Published date: 15 August 2019
• Author: DM Davis
• Date: 15 August 2019
• Citation: 2009 Acta Juridica 185
• Pages: 185-203

Competition Law and Globalisation:

Uniformity or Convergence, Networking or

State Sovereignty?

D M DAVIS*

University of Cape Town

I INTRODUCTION

Two signif‌icant stories have dominated antitrust

1

regulation since World

War II, more particularly over the past two decades. Whereas prior to

1950 antitrust law was essentially the province of the United States and its

predecessor, Canada, more than one hundred countries have since

introduced relevant legislation. In the wake of the rapid globalisation of

the world economy over the past two decades, the cry for some conver-

gence in approach has increased in volume. The past decade has witnessed

the creation of various horizontal networks of antitrust agencies, the

International Competition Network (ICN), the formation of a WTO

working group on the interaction between trade and competition law as

well as extensive activity generated by the Organisation for Economic

Cooperation and Development (OECD) and the United Nations Con-

ference in Trade and Development (UNCTAD). There was even the

promise of the development of certain minimal universal principles on

competition at Doha in November 2001. Further, it has become apparent

that many national competition laws have struggled to deal with the

growing extraterritoriality of economic activity. Even with the adoption

of bilateral enforcement cooperation agreements, the intention has been

less to extend jurisdiction beyond the territory than to ensure that

enforcement or litigation will take place within their jurisdiction.

This paper is concerned with the possibility of some form of global

governance of antitrust or anticompetitive behaviour. At the outset, it

must be remembered that international attempts to control anticompeti-

tive practice are not new. In the pre-World War II period, cartels played a

signif‌icant role in the economies of the world.

2

Signif‌icantly, at the

Bretton Woods Conference of July 1944, the proposal was made for the

* Judge of the High Court of South Africa; Honorary Professor in the Faculty of Law,

University of Cape Town. Thanks to David Unterhalter SC for valuable comments and to

Professor Eleanor Fox for the intellectual stimulation which forms much of the basis of this

paper.Needless to say, all faults are my own.

1

In this paper, I have employed the terms ‘antitrust’and ‘competition law’ interchangeably

in order to accommodate both sides of the NorthAtlantic Ocean.

2

R K Michels Cartels, Combines and Trustsin Post-War Germany (1928).

185

2009 Acta Juridica 185

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creation of an international trade organisation (ITO), the charter of which

would deal with restrictive business practices. It was intended that the

ITO would provide for dispute resolution mechanisms for anticompeti-

tive conduct and practices that limited access to markets and that members

would take measures against business practices that were harmful to the

expansion of international trade or production. However, the US Con-

gress feared a loss of sovereignty in the event of the creation of the ITO

and, perhaps ironically but not atypically, developing countries consid-

ered that their increased focus on import substitution-based industrial

policy would be affected by the charter. Essentially as a result of a lack of

support from the US, the organisation did not materialise.

3

Since that period, the US has adopted an aggressive approach to the

criminal prosecution of international cartels and expanded the application

of its antitrust laws extraterritorially, particularly from 1945 with the

United States v Aluminium Co. of America decision.

4

At the time of the

Aluminium case, as noted above, international antitrust law was extremely

underdeveloped. There were only two jurisdictions, the US and Canada

which had full blown competition laws, including provisions to deal with

merger activity. Twenty other jurisdictions had some competition law

elements.

5

Many Western European countries had begun to introduce or

had already introduced some form of competition law, initiatives that

have increased exponentially over the past two decades throughout much

of the world. By 2006 there were over seventy jurisdictions with merger

laws, while over a hundred countries had a competition law of sorts or

were in the process of adopting legislation. Most recently, and of the

greatest signif‌icance, competition legislation has come to both India and

China.

Assessed in general terms, the early enactments were highly discretion-

ary with vaguely couched norms concerning abuse of economic power.

Germany, for example, prohibited cartels but this only applied to cartels

based on formal contracts and with an extensive series of exemptions. In

1951, a prohibition of anticompetitive agreements and unilateral abuse by

dominant enterprises in the coal and steel industries came into force with

the European Coal and Steel Community Treaty. Some f‌ive years later

this was followed by more general prohibitions with the conclusion of the

European Economic Community Treaty in 1957. New legislation,

although sourced in EU and US precedent and experience, has often

included a prohibition of unilateral conduct, bid rigging, predatory

3

J H Jackson WorldTrade and the Law of GATT (1969).

4

148 F.2d416 (2d Cir. 1945).

5

P S Mehta ‘Competition policy in developing countries: an Asia-Pacif‌ic perspective’ in

Bulletin on Asia-Pacif‌ic Perspectives 2002/03 (2002), available at http://www.unescap.org/drpad/

publication/ bulletin%202002/ch7.pdf (last accessed 20 May 2009).

186 GLOBAL ADMINISTRATIVE LAW

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