Cross Border Transfer of Wealth – Reflections on Competition Law and Developing Economies

Abstract

Protection of consumer welfare is a central pillar of competition law enforcement. Although not the sole goal pursued by competition law, such protection – preventing unjustified transfer of wealth from consumers to producers – is a common feature of modern competition regimes. In the domestic sphere, transfer of wealth is a consistent and clear benchmark in competition law enforcement. However this is not necessarily the case in an international setting. The assessment of “transfer of wealth” in a cross-border setting may distort competition law enforcement. While extraterritoriality and cooperation could, at times, remedy sub-optimal enforcement, this may not always be the case. Using the prism of “transfer of wealth” this paper reviews the implications of welfare externalities on developing and small economies.

Keywords: Competition law, consumer welfare, Extraterritoriality, Export Cartels