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Interaction between Regional Competition Law Systems and National Enforcement
 

Background

In recent years, many groups of countries have adopted a competition law covering their entire membership. Such groups of countries (which we will call groupings) are often regional or sub-regional in their geographical scope and driven by trade interests (i.e. the desire to establish a customs union or a common market). The underlying assumption is that the elimination of obstacle to free trade among the member states will promote economic growth. When competition law provisions are included into those agreements, it is to ensure that public obstacles to trade which are to be eliminated will not be replaced by anticompetitive practices enacted by member states firms aiming to restrict competition from firms in other member states.

In groupings which have a regional competition law, the relationship between the regional competition law enforcement system and the national competition laws enforcement systems of the member states is complex and can be quite diverse.

The issue of the interaction between the competition law system at the regional level and the national competition law systems of the member states has not been extensively researched in the past.

In some groupings there is a duty for the Member States to adopt a national competition law consistent with the regional law. In other groupings, there is the possibility that Member states may prohibit some practices which are not prohibited at the regional level (see, for example, the EU case). Finally in some groupings there is no obligation on the member states to adopt a competition law.

In some groupings, regional competition law enforcement is centralized with a regional authority under the control of a regional court (ex: WAEMU or European Union until 2000 for exemptions or to this day for merger control of community dimension). In other groupings regional competition law enforcement is directly applicable by national competition authorities or by national courts.

In some groupings national competition authorities can enforce both their domestic competition law and the regional competition law, in some other groupings they can only enforce their domestic law, finally in other groupings they cannot enforce their domestic law as there is a monopoly of the regional authority on competition law enforcement in the region. In the last case national competition authorities' function is to cooperate with the regional authority.

In some groupings in which national authorities have enforcement powers the allocation of cases between the national competition authorities and the regional competition authority is clear, in other groupings the allocation of cases is not so clear.

The cooperation duties of national authorities with the regional authorities are quite varied from one grouping to another. Furthermore in some groupings there are elaborate systems to promote cooperation between the competition authorities of member states (horizontal cooperation), whereas in other groupings the only cooperation provided for is the cooperation between each national competition authority and the regional competition authority.

Finally in some groupings there is a sharing of revenues between the regional authority and the national competition authorities while there is no such revenue sharing in other groupings.

Thus the existence of competition provisions in regional agreements may have a number of effects on national competition law enforcement: it can determine the existence or lack of existence of a domestic competition law, the scope of the national law, the intensity and the quality of enforcement of the national law, the kind of cooperation that the national authority can expect, the setting of priorities by the national competition authorities, the revenues of the national competition authorities etc.

Some of the effects of the coexistence between national competition laws and regional competition laws may be beneficial to competition law enforcement ( for example by allowing the elimination of anti-competitive practices which no national competition authority could tackle on its own or by facilitating cooperation between them or between them and the regional competition authority), but some of the effects of this coexistence can also be to weaken competition law enforcement ( for example, by preventing the development of a competition culture at the local level or by excessive centralization of the enforcement).

Objective and Project Plan

This research project aims at exploring the various facets of the potential conflicts and complementarities between regional competition law enforcement and national competition law enforcement.

First we will map out the different dimensions of the interaction between regional competition law enforcement systems and national competition law enforcement systems.

Second we will look at all the regional groupings which have a competition dimension in the developed and the developing world in order to compare the solutions adopted in each possible area of conflict or complementarity.

Third, we will discuss the extent to which specific solutions which seem satisfactory to maximize the synergies between national competition law enforcement and regional competition law enforcement in some groupings could be adapted in other regional groupings ( by looking at variables such as the level of economic development of countries in different groupings, whether the solutions imply more or less abandonment of national sovereignty than what could be acceptable for some groupings), what are the resource implications of the solutions, etc.).

Fourth we will make policy recommendations based on the previous analysis.

Current Phase of Implementation

The project is currently in Phase 1.

Contact Information

Prof. Fréderic Jenny
Co-Directeur du Centre Européen de Droit et d'économie (CEDE)
ESSEC Business School
 
Med Rezzouk
Associate Researcher
Centre Européen de Droit et d'économie (CEDE)
ESSEC Business School
 
Dr. Graham Mott
Economic Affairs Officer
Competition and Consumer Policies Branch (CCPB)
UNCTAD
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