The Economic and Financial Crisis, Regulation and Competition

Abstract

The financial crisis and the economic crisis it sparked are raising legitimate questions about the market economy’s capacity to promote growth and well-being. Although the 1990s and the early 2000s saw competition law acquire growing power to shape our economic activity, it is government intervention and regulation – more intrusive than competition law – on which hopes for economic recovery and a return to prosperity are now pinned. However, we need to qualify the arguments of those who proclaim the death of economic liberalism and the end of competition law as the pre-eminent tool for regulating the functioning of markets, by analysing closely the roots of the crisis, its symptoms and the remedies envisaged, and then looking at the role of competition authorities in a time of crisis and how the crisis will influence the application of competition law. The competition authorities of the Organization for Economic Cooperation and Development (OECD) member countries engaged in just such an exercise in mid-February 2009 at a meeting of the Organisation’s Competition Committee. The remarks that follow are not a summary of these discussions, but rather a commentary on the main themes that were addressed.