EU/US Convergence in Competition Policy
FTC Chairman William Kovacic, easily one of the most insightful thinkers and writers on issues of global competition policy, has posted a new paper offering a thoughtful analysis of where the EU and US competition policy systems have been, where they are going, what institutional differences might cause the systems to converge or diverge further, and what to do about it. Kovacic notes that while “the apparent agreement on overall objectives would seem to be, and is, an important step toward achieving convergence between the two systems” it is important not to avoid frank discussions of what both US and EU officials mean when they invoke the concept of “consumer welfare” or “protecting competition, not competitors” precisely because these phrases can “are so open-ended that their true meaning in practice depends on how they are applied.” Kovacic goes on to discuss various institutional forces favoring both convergence and divergence and offering some suggestions for facilitating the adoption of superior norms. The paper is a must-read for anybody interested in global competition issues.
In other events on the “convergence” landscape, I recently attended a conference at Stanford (sponsored by SIEPR, Stanford Law School and Hoover) on the Modernization of Antitrust Law-Private and Public Enforcement and Abuses – Europe and the US where I spoke on a panel discussing issues of transatlantic convergence (and lack thereof) with respect to single firm conduct and abuse of dominance (sorry, I can’t find an online version of the agenda to link to). I must admit that I typically find discussions of the “convergence issue” in competition policy underwhelming as they seem to systematically resort to the types of open-ended and meaningless slogans Kovacic discusses in his paper, avoiding a frank and rigorous assessment of the true costs and benefits of both convergence and divergence of competition systems. However, I’m very pleased to report that the SIEPR conference panel discussing these issues (which was moderated by Roger Noll and including presentations by Tim Bresnahan (Stanford economics) and Matthew Bennett (OFT) and comments from Michael Topper and myself) surpassed my expectations (largely due to the quality of exchange between presenters, discussants and the audience in the open Q&A session).
For what its worth, my brief comments emphasized: (1) carefully distinguishing between convergence at the agency and court level, (2) sensitivity to the relationship between institutional design and convergence/ divergence, and (3) a possibility not frequently discussed in the convergence literature on single firm conduct policies in the EU and US: that the US policies will look more like the EU and not the other way around. On the third point, one would be hard pressed to find an invocation of the benefits of convergence by a U.S. commentator or agency official that does not implicitly assume that convergence means Article 82 looks more like Section 2 in the future. While there are other recent examples available that also threaten this possibility, I discussed recent U.S. antitrust enforcement in the standard setting context as an example of an area where this sort of “reverse” convergence might be occurring. The lesson, of course, is of the “be careful what you wish for” variety. The appropriate focus should not be convergence or divergence per se, but jurisdictional competition combined with facilitation of superior substantive analytical norms.