Here's a link to a new paper, and its abstract, to be published in th Chicago International Law Journal.
As Einer Elhauge and I noted in the preface to our recently published casebook, modern antitrust law is global antitrust law. This is not so much the case because large corporations are subject to global antitrust rules, but because their behavior is being reviewed under the antitrust rules of an ever growing number of jurisdictions. While the last six decades have seen repeated unsuccessful attempts to develop global antitrust rules, the 1980s and 1990s have witnessed significant growth in the number of countries adopting antitrust law statutes and setting up specialized antitrust agencies and/or courts. Thus, some 100 countries currently have antitrust rules in place, and the process has not ended yet. On August 1, 2008, China's Anti-Monopoly Law (hereafter, the "AML") entered into force and various factors indicate that China will become a significant actor on the global antitrust scene.
As a result, a typical merger between large U.S. corporations now ordinarily requires approval not just in the United States ("U.S."), but also in the European Union ("EU"), Canada, Brazil, South Africa, Russia, Korea, and the numerous other jurisdictions which have merger control rules and in which the activities of such corporations may produce market effects. Similarly, international cartels may trigger administrative, civil or even criminal investigations not only in the United States, but also in a range of other jurisdictions. The Microsoft case also bears testimony to the fact that firms engaging in certain practices, such as refusal to license or tying, may end up being condemned for abuse of dominance under the antitrust laws of different nations and, as a result, face a variety of remedies that are not necessarily consistent. Thus, businessmen, lawyers and policy-makers can no longer content themselves with understanding only the antitrust law of their nation. They must also be conversant with the other regimes that form part of the overall legal framework that regulates competitive behavior.
While I, like many other scholars, have supported and even to some extent contributed to the development and adoption of antitrust law regimes in a growing number of jurisdictions, my increased level of involvement in recent years in cases dealing with the application of antitrust laws and the participation of authorities of several jurisdictions has permitted me to gain first hand experience of some of the pitfalls of the process of "decentralized globalization" of antitrust, which has taken place in the last few decades as a result of the concomitant failure of nations or international organizations to develop a global antitrust law regime and the decision of many nations to adopt their own antitrust laws. While the notion of "decentralized globalization" may sound like an oxymoron, it represents an attempt to describe the fact that antitrust is today a global phenomenon, not through the adoption of supranational rules such as in areas pertaining to environmental protection, labor rights, or human rights, but through the adoption of national rules often varying in scope, objectives, methods, and the manner in which they are enforced.
There is no doubt that the adoption of antitrust rules in a larger number of nations generates benefits as it allows, for instance, these nations to protect their citizens against international cartels or excessive market concentration This process has, however, also given rise to challenges for global corporations, some of which are well known. The "decentralized globalization" of antitrust increases: (i) the cost of doing business and the complexity of large-scale antitrust investigations, which now often have a multi-jurisdictional component; (ii) the risk of contradictory decisions where a firm's behavior is reviewed by different antitrust authorities under different sets of rules; and (iii) the likelihood that some decisions be guided by protectionist motives.
The objective of this paper is to raise awareness of a particular problem, which relates to the fact that in a world where a conduct of a given is subject to different antitrust regimes, the most restrictive antitrust regime always wins, i.e. the firm in question will be required to ensure that its conduct conforms to whichever regime is most restrictive, hence leading to global antitrust over-enforcement. As will be seen, this issue, which I referred to as the "Strictest Regime Wins" problem, may lead to situations where the decision of an antitrust authority in one jurisdiction (for instance, taking a negative decision on a conduct that is otherwise considered to be pro-competitive) may deprive consumers in other jurisdictions of various efficiencies that are well-recognized by their own antitrust authorities. This paper also draws attention to a number of procedural issues, which may negatively impact the ability of corporations investigated in foreign jurisdictions to defend their case.
Against this background, this paper is divided into five parts. Part II describes the process of "decentralized globalization" alluded to above. Part III discusses the various benefits brought about by the adoption of antitrust regimes in an increasingly large number of nations, but also the challenges that this has created for multinational corporations. Part IV focuses on the problem of global antitrust over-enforcement described above. Finally, Part V provides for a short conclusion.