The New Trustbusters

9 Pages Posted: 1 Mar 2002

See all articles by David S. Evans

David S. Evans

Market Platform Dynamics; Berkeley Research Group, LLC

Abstract

The European Commission's rejection of the GE/Honeywell merger in July 2001, a deal that the United States Department of Justice had already approved, highlights the dangers that multinational companies face as antitrust laws proliferate around the globe. Although American and European regulators generally agree on enforcement actions, the GE/Honeywell case revealed some important differences in substantive and procedural approaches to antitrust enforcement. U.S. antitrust laws are enforced in the courts, where the burden generally falls to the enforcement agencies (or other plaintiffs) to demonstrate anti-competitive harm. U.S. courts have espoused several core principles that guide antitrust enforcement in the United States. First, the sole purpose of antitrust laws is to protect consumers. Second, antitrust laws should not be used to protect businesses from competition. Third, unfettered competition generally benefits consumers even when a single firm captures most or all of the market. In Europe, by contrast, the Commission acts as prosecutor, judge, and jury. The process gives greater voice to competitors and limits the ability of companies to respond to allegations presented by their rivals. In addition, the Commission, which employs fewer economists than its counterparts in the U.S., has embraced economic theories such as "conglomerate effects" that protect competitors at the expense of consumers. As multilateral discussions about international competition policy commence, the United States should bare in mind two points. First, the conflicts between the United States and Europe over antitrust enforcement are not about the protection of national interests. Second, the European Commission has generally been a progressive force in the EU. However, as the Commission becomes a more aggressive regulator, more disputes along the lines of GE/Honeywell are likely to occur, and the United States must continue to emphasize the core principles of antitrust policy.

Suggested Citation

Evans, David S., The New Trustbusters. Available at SSRN: https://ssrn.com/abstract=302832 or http://dx.doi.org/10.2139/ssrn.302832

David S. Evans (Contact Author)

Market Platform Dynamics ( email )

140 South Dearborn St.
Chicago, IL 60603
United States

Berkeley Research Group, LLC ( email )

99 High St.
Boston, MA 02110
United States

HOME PAGE: http://davidsevans.org

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