Competition Law’s Fairness Gap: Why Better Procedure Requires Better Incentives
Everyone agrees competition enforcement should be fair. Agreement gets shakier once fairness starts costing agencies time, discretion, or victories.
Competition authorities often warn that procedure should not become an obstacle to enforcement. Fair enough. Antitrust investigations can be slow, document-heavy, and vulnerable to delay tactics. A firm with deep pockets may try to turn “process” into attrition.
But that is only half the institutional problem. An agency with broad discretion, weak disclosure duties, and limited independent review can turn enforcement into regulation by accusation.
That concern is economic as well as legal.
Due process helps competition authorities separate harmful conduct from vigorous competition. Notice, access to evidence, a meaningful chance to respond, protection for privileged and confidential information, reasoned decisions, and independent review all improve the quality of enforcement. When those safeguards are weak, agencies make more errors, firms face greater uncertainty, and interest groups gain more opportunities to seek favorable treatment.
The costs do not stay inside the hearing room. They appear in lower investment, less experimentation, and fewer innovations.
My recent Antitrust Chronicle article on the “next step forward” examined the substantial international framework already in place. It includes the Organisation for Economic Co-operation and Development’s (OECD) recommendation on procedural fairness, the International Competition Network’s (ICN) Framework for Competition Agency Procedures, and the growing use of due-process commitments in trade agreements.
The problem is no longer a shortage of principles. It is the gap between stated commitments and actual practice.
That gap reflects institutional incentives. Competition agencies do not operate as detached maximizers of social welfare. Like other institutions, they respond to political pressure, resource limits, internal priorities, and organizational self-interest.
A serious reform program must therefore do more than urge agencies to be fair. It must make sound procedure visible, reward compliance, and impose some cost when authorities ignore it.