Competing Ways Towards International Antitrust: The WTO Versus the Icn

Marburg Economics Working Paper No. 03-2005

33 Pages Posted: 9 Mar 2006

See all articles by Mariana Bode

Mariana Bode

University of Hannover - Faculty of Economics and Business Administration

Oliver Budzinski

Ilmenau University of Technology

Date Written: March 2005

Abstract

Various problems coming along with the ongoing globalization of markets and business activities like international cartels, monopolization of world markets, deterrence of market access in spite of relaxed trade barriers as well as jurisdictional conflicts about transnational mergers and alleged or actual anticompetitive business strategies call for the creation of an international antitrust regime. Two alternative avenues to internationalize antitrust policy are currently advanced by governments and antitrust authorities. The first avenue is to complement the World Trade Organization (WTO) by a board of supervision for international competition issues including a harmonized antitrust code. With the Doha Declaration (2001), the WTO members agreed to engage in negotiations on an international antitrust agreement, although the time schedule remains uncertain in the light of the Cancun failure. The second avenue was opened up by the creation of the International Competition Network (ICN, 2001), which addresses global antitrust concerns by policy coordination.

This paper compares the two approaches against the background of economic and political criteria. It starts with a brief overview of the theoretical alternatives to cope with cross-border antitrust problems, such as the strengths and weaknesses of unilateral instruments (effects doctrine), bilateral agreements and (past) multilateral attempts. Following a descriptive characterization of the key features and underlying principles of the WTO and the ICN approach to international antitrust, the main section of the paper presents an analytical comparison of the two approaches. It is based on selected criteria, which are predominantly derived from institutional and political economics. The comparative performances and potentials of WTO- and ICN-styled international antitrust are evaluated regarding the internalization of externalities, agency problems and preference conformity, overall practicability & negotiation/implementation competences, efficiency of governance, protection of effective and efficient competition, instruments of conflict resolution, and the capability to cope with changing environments. Additionally, the article examines another dimension of the process towards an international antitrust regime, which has been neglected so far in the literature. Are their benefits and/or deficiencies of having a 'competition of ways' to select the superior regime? This points to the theory of institutional (or regulatory) competition. The final section presents conclusions.

Keywords: international antitrust, international competition network, world trade organization

JEL Classification: L40, K21, K33, H77, F02, F42

Suggested Citation

Bode, Mariana and Budzinski, Oliver, Competing Ways Towards International Antitrust: The WTO Versus the Icn (March 2005). Marburg Economics Working Paper No. 03-2005, Available at SSRN: https://ssrn.com/abstract=888682 or http://dx.doi.org/10.2139/ssrn.888682

Mariana Bode

University of Hannover - Faculty of Economics and Business Administration ( email )

Department of Marketing and Consumer Research
Koenigsworther Platz 1
30167 Hannover
Germany
+49 511 762 5927 (Phone)

HOME PAGE: http://www.marketing.uni-hannover.de

Oliver Budzinski (Contact Author)

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

HOME PAGE: http://www.tu-ilmenau.de/wth

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