Competition law and liberalisation

Abstract

Introduction In the 1980s, states began to relinquish control in a number of economic sectors that had been under their ownership since at least the post-war era (e.g. telecommunications, energy, transport, postal services). For economic reasons (the industries were considered natural monopolies) and/or political considerations (the industries provided public services that all should have a right to as citizens, not as consumers) competition was excluded and in many countries the industries operated as a single, vertically integrated, state-owned monopoly. However, state monopolies were called into question by three considerations: economic (increasing dissatisfaction with the performance of these sectors under state management and an understanding that competition could inject greater efficiency), technological (innovations weakened the natural monopoly argument) and political (a shift in the conception of the role of the state, perhaps best encapsulated by the catchphrase ‘rolling back the state’). Today, the provision of public services does not allow one to make a prima facie case for excluding competition. Instead ‘[t]he traditional approach to public life, based on stewardship and public duty, has been replaced by a market-oriented approach to the delivery of public goods and services’. One useful way to describe the changed relationship between the state and newly liberalised industries is to deploy the concept of the regulatory state.