Competition Policy Reform Research Articles

Intergovernmentalism in a supranational field: France, Germany, and EU competition policy reform

Competition policy is one of the few truly integrated policy fields of the European Union (EU), with supranational actors like the European Commission having extensive competences. Scholars consider it to be a relatively stable policy domain, characterised by strong path dependencies, a solid anchoring in European primary law, and the pre-eminence of epistemic authority. However, in recent years, EU competition policy has undergone remarkable changes including merger control, projects of common European interest, and state aid. This article argues that France and Germany, the EU’s two largest member states with most financial resources, have been decisive in promoting and realising these changes. Competition policy is an unlikely case for Franco-German European-level political work, primarily because of the supranational character of the policy field and the two countries’ oftentimes opposing positions on aspects related to the European single market. Building on policy document analysis and expert interviews, the article shows how and why France and Germany, partly in confrontation and partly in alignment with the Commission, have re-shaped EU competition policy.

Two steps forward, one step back? Party competition, cooperative federalism, and transport policy reforms in Germany

BackgroundTransport policy has regained political relevance in Germany. The successful realization of the Verkehrswende,—the extensive transition toward sustainable transport and mobility—is central to reaching climate neutrality. In 2020, the Federal Government proposed the reform of two key ordinances that have regulated road traffic so far. The amendment was aimed at implementing several provisions at the expense of car drivers and, at the same time, in favor of cyclists and pedestrians. Due to cooperative federalism, the governments of the 16 constituent units (Länder) had to adopt the amendment in the Bundesrat, Germany’s second chamber. In the legislative process, however, the reform ultimately failed in its original scope. Using it as a particularly instructive case study, we show how and why party competition and cooperative federalism hamper comprehensive transport policy reforms in Germany.ResultsIn the German political system, political interests interact within a complex web of cooperative federalism. To understand partisan encroachment on the federal decision-making processes, this paper uses a process-tracing approach. To investigate decision-making in the Bundesrat and its outcomes, the empirical analysis combines qualitative analyses of several publicly available sources. We can empirically demonstrate that political parties influenced legislative procedures. The reform failed in its original scope because the three political parties with veto power in the Bundesrat insisted on their positions and were not willing to agree on a compromise.ConclusionsFor the implementation of the Verkehrswende, the German federal system proves to be both a blessing and a curse. On one hand, the institutional design of the Bundesrat constrains extreme positions and helps promote decisions most citizens may agree with. The Länder governments and administrations can also contribute their expertise and local experience to federal legislation via the Bundesrat. On the other hand, veto powers are ubiquitous in the German system of cooperative federalism. Therefore, it is prone to blockades. The actions of the political parties in the Bundesrat have hampered the comprehensive reform of road traffic regulations that was originally envisaged. Policymaking took two steps forward toward implementing the Verkehrswende, only to immediately take one step back again.

Productivity, Economic Dynamism and the “Failure of Competition” Narrative*

Productivity growth has declined in Australia and other developed countries over the past two decades. It has been argued that reduced dynamism and the failure of competition at an economy‐wide level is to blame, leading to calls for broad competition policy reforms. In this paper we consider the theoretical and empirical evidence to support this “failure of competition” narrative. We find that the evidence, at best, is ambiguous. Competition failures in some areas support the need for reform, but the competition landscape across Australia is complex and there is no simple link between indicators of competition, such as concentration levels; indicators of reduced dynamism, such as falling business investment, and falling productivity growth.

A Zippier Economy: Lessons from the 1992 Hilmer Competition Reforms*

The Hilmer Review and National Competition Policy reforms were an important part of the 1990s productivity surge and have been estimated to have delivered a permanent 2.5 per cent lift in GDP. I outline the key elements of these reforms and identify seven lessons for modern competition reformers. In the 2020s, with the startup rate falling and market concentration rising, boosting competition is one way of increasing productivity and improving the dynamism of the Australian economy.

Choosing the right filter: Market definition in two-sided markets

The advent of the digital economy over the last two decades has stimulated significant regulatory change. While much ink has been spilled over high-profile enforcement and potential competition policy reform, the Commission’s review of its market definition notice has passed relatively unnoticed. But the review has the potential to frame how competition law assesses digital markets—as well as every other type of market—for decades. It offers the opportunity to address some of the new questions posed by digital platforms, in a consistent way across the EU. This article offers thoughts on the thorny issue of how market definition should apply to platform markets, the relevance of the SSNIP test, and some practical perspectives on the vexed topic of defining one or more markets for two-sided platforms.

Competition Policy in Transition: Exploring Data Portability’s Roles

The paper explores data portability from an EU competition policy perspective as set against an institutional and conceptual background swept by gales of transformation. The looming competition policy reform package includes an ex ante regulatory framework aiming to impose proportionate constraints on the behavior of particularly powerful, structuring digital platforms, as well as a further competition tool possibly inspired by the UK market investigation regime. This brief contribution takes stock of data portability a decade after the Obama Administration first launched a series of so-called “My Data” portability initiatives in the US. In the EU, significant developments in this respect have been the introduction of the data portability right under the General Data Protection Regulation and, more recently the data porting framework under the Free Flow of Non-Personal Data Regulation. Specifically, the paper points out that, from a competition policy perspective, data portability can play three distinct roles, namely it can allow for switching, enable data fluidity and thereby promote competition and innovation especially in the context of digital ecosystems, as well as enhance consumer empowerment in the digital economy overall. These different roles are than analysed against the background of: (1) traditional competition law, (2) a market investigation regime and (3) an ex-ante regulatory framework targeting large online platforms with gate-keeping power.

Sizing up the competition: explaining reform of European Union competition policy in the Covid-19 era

ABSTRACT Ensuring fair competition has long been a core pillar of the European Union (EU). In the wake of the Covid-19 pandemic, however, the EU has diverted significantly from its traditional commitment to market-based competition, notably in state aid and foreign subsidies. This article explores change and continuity in post-Covid-19 European competition policy (ECP) by considering both the radicality and permanence of these changes. Using process-tracing based on primary documents, secondary materials, and personal interviews, this article examines recent shifts in EU competition policy, probing three causal factors: 1) digitization of the global economy; 2) geopoliticization of competition regulation; and 3) Brexit. We argue that the Covid-19 crisis has brought these pre-existing challenges to ECP to the fore and, thereby, created space for policy entrepreneurs in EU member state governments and institutions to push for greater promotion and protection of European industry in the internal market while reinforcing supranational competition enforcement.

Competition Policy in Transition: Exploring Data Portability’s Roles

The paper explores data portability from an EU competition policy perspective as set against an institutional and conceptual background swept by gales of transformation. The looming competition policy reform package includes an ex ante regulatory framework aiming to impose proportionate constraints on the behavior of particularly powerful, structuring digital platforms, as well as a further competition tool possibly inspired by the UK market investigation regime. This brief contribution takes stock of data portability a decade after the Obama Administration first launched a series of so-called “My Data” portability initiatives in the US. In the EU, significant developments in this respect have been the introduction of the data portability right under the General Data Protection Regulation and, more recently the data porting framework under the Free Flow of Non-Personal Data Regulation. Specifically, the paper points out that, from a competition policy perspective, data portability can play three distinct roles, namely it can allow for switching, enable data fluidity and thereby promote competition and innovation especially in the context of digital ecosystems, as well as enhance consumer empowerment in the digital economy overall. These different roles are than analysed against the background of: (1) traditional competition law, (2) a market investigation regime and (3) an ex-ante regulatory framework targeting large online platforms with gate-keeping power.

The Institutions of U.S. Antitrust Enforcement: Comments for the U.S. House Judiciary Committee on Possible Competition Policy Reforms

This paper provides comments on the investigation by the US House Judiciary Committee (“the Committee”) into the state of competition in the digital marketplace. The comments focus on the third topic identified by the Committee: Whether the institutional structure of antitrust enforcement – including the current levels of appropriations to the antitrust agencies, existing agency authorities, congressional oversight of enforcement, and current statutes and case law – is adequate to promote robust enforcement of the antitrust laws. The paper focuses principally on the policy implementation challenges that stand between ambitious reform aspirations and their effective realization in practice and the measures that Congress can take to strengthen antitrust’s implementing institutions. Drawing on lessons from modern antitrust history, other jurisdictions, and our own experience, the paper proposes steps to overcome identified impediments that are otherwise likely to stand in the way of effective delivery of proposals to expand competition policy in the US.

Competition law in the Asia-Pacific region makes small and medium enterprises poorer without innovation law

Based on international advice, most countries in the APEC region have now adopted competition laws. The more competition, the better – especially for the small and medium enterprises (SMEs) that most need to compete. Yet, ‘better’ competition laws (as measured by a range of characteristics commonly associated with competition law and policy rankings) may actually hurt trade and growth. In this article, we provide a model of SME competition in the APEC region – and show how innovativeness determines the effectiveness of competition law from international data. We show how countries like Singapore and Hong Kong benefit from competition policy reform – because they already have vigorous innovation policies. For countries with such policies – like Brunei – freer trade and competition could actually hurt GDP growth.

Management aspects of development of competitive biofuels production in Ukraine

In the context of easing the dependence of most countries of the world on the import of fossil energy sources, a complex of systematic research on the search and effective use of renewable energy sources, in particular the development of the biofuels industry, is a necessary direction. An urgent problem need arises for the parallel implementation of the policy of diversification of supply and efficient use of fuel and energy resources with the active introduction of competition policy and infrastructure reforms in the economic and energy sector. Economically developed countries pay significant attention to energy supply on the basis of sustainable development, which determines the urgency of developing an integrated system of directions and priorities for the formation of Ukraine's energy security on the basis of its own biofuels production. The purpose of research is to provide scientific and practical substantiation and systematization of organization and innovative aspects of effective regulation of the development of competitive biofuels production in Ukraine at different levels of management. The methodical and practical experience of Ukrainian scientists concerning the division of Ukraine into natural-economic region was used. The methods of system analysis, monographic, graphical and abstract-logical are applied. The development of national biofuels production contributes to the efficient use of scientific, economic and labor potential and provides optimization of biofuel specialization areas. On the basis of the natural-economic region, it is necessary to form the main economic-energy proportions of macro-regional development and carry out balance calculations of production and consumption of biofuels. The formation of competitive biofuels production should be based on the principles of independence, self-sufficiency, accessibility and quality, based on clusterization processes. It is necessary to intensify the processes of increasing the volume and share of renewable energy consumption, giving priority to the development of the biofuels industry. Biofuels are a significant innovative contribution to the local energy supply of natural-economic regions, areas, administrative districts and individual agro-industrial enterprises to increase the competitiveness of manufactured products. Keywords: economic development, management, state energy policy, renewable energy, biofuels industry, natural-economic region.

Analysis of Abuse of Buyer Power Under the Kenyan Competition Law Regime

Competition policy regime in Africa is developing at a heightened speed as countries establish and strengthen both their legal and institutional framework. This calls for continuous legal education, research and development in competition law and policy for competition lawyers and practitioners in order to achieve the benefits of competition enforcement through merger regulation and prohibition of anti-competitive conduct. Kenya remains active in competition policy reforms in Africa. In 2016, Kenya amended its Competition Act No. 12 of 2010 (Competition Act) and prohibited for the first time in Africa abuse of buyer power. The objective of this paper is to interrogate, analyze and discuss section 24(2A) of the Competition Act. This paper discusses in detail the definition, determination of buyer power and abuse of buyer power as contemplated under the Competition Act.

Competition policy reform in Europe and Germany – institutional change in the light of digitization

ABSTRACTThe ubiquitous process of digitization changes economic competition on markets in several ways and leads to the emergence of new business models. The increasing roles of digital platforms as well as data-driven markets represent two relevant examples. These developments challenge competition policy, which must consider the special economic characteristics of digital goods and markets. In Germany, national competition law was amended in 2017 in order to accommodate for digitization-driven changes in the economy and plans for further changes are already discussed. We review this institutional change from an economics perspective and argue that most of the reform’s elements point into the right direction. However, some upcoming challenges may have been overlooked so far. Furthermore, we discuss whether European competition policy should follow the paragon of the German reform and amend its institutional framework accordingly. We find scope for reform particularly regarding data-driven markets, whereas platform economics appear to be already well-established.

Competition Policy Reform in Europe and Germany – Institutional Change in the Light of Digitization

The ubiquitous process of digitization changes economic competition on markets in several ways and leads to the emergence of new business models. The increasing roles of digital platforms as well as data-driven markets represent two relevant examples. These developments challenge competition policy, which must consider the special economic characteristics of digital goods and markets. In Germany, national competition law was amended in 2017 in order to accommodate for digitization-driven changes in the economy and plans for further changes are already discussed. We review this institutional change from an economics perspective and argue that most of the reform’s elements point into the right direction. However, some upcoming challenges may have been over-looked so far. Furthermore, we discuss whether European competition policy should fol-low the paragon of the German reform and amend its institutional framework accordingly. We find scope for reform particularly regarding data-driven markets, whereas platform economics appear to be already well-established.

The European Commission's Fight against Cartels (1962–2014): A Retrospective and Forensic Analysis

AbstractOn the basis of information collected from all the published European Commission's decisions in cartel cases between 1962 and 2014, this paper identifies different stages in the supra‐nationalization of cartel policy at the European Union (EU) level. It analyzes major competition policy reforms, strategies and initiatives taken by the European Commission (EC), and its relationship and interaction with Member States’ resistance and other policy players’ positions, which offers a new in‐depth study on the history and political economy of a key pillar of EU integration. It also provides a forensic analysis of the sanctioned cartels at each stage. This study shows that the introduction of the leniency programme was a critical juncture that allowed cartel authorities to identify cartels more effectively and to provide evidence for sanctioning collusion much more easily than before. This success was a key determinant for deepening the EU integration in competition policy. The intended drivers and the paradoxically unexpected shifters of such growing integration in cartel policy enforcement at the EU are discussed.

Normative Beliefs, Party Competition, and Work-Family Policy Reforms in Germany and Italy

Normative Beliefs, Party Competition, and Work-Family Policy Reforms in Germany and Italy

Competition Politics

This article examines the political origins of antitrust enforcement in the developing countries. I consider how the organization and political influence of business affects governments’ commitments to competition policy institutions. The analysis predicts cross-class coalitions with contending regulatory preferences. An alliance of incumbent producers and affiliated labor groups (“insiders”) opposes competition policies that threaten its existing rents. A procompetition coalition of consumers, unorganized workers, and small businesses (“outsiders”) favors the price and employment effects of effective antitrust enforcement. I argue that governments’ commitments to competition policy reflect the congruence of interests among economic insiders and the strength of democratic institutions. I examine the argument using a new dataset measuring the timing of competition policy reforms, as well as governments’ commitments to the effectiveness of the competition policy authority. The empirical analysis indicates that democracies are more likely to pursue competition policy reforms. I also find that organized insiders are associated with a slower reform process and with less effective competition agencies.

Developing Countries, Political Clientilism, and Weymouth’s “Tug of War” Model of Antitrust Reform

Stephen Weymouth’s article, ‘‘Competition Politics: Interest Groups, Democracy, and Antitrust Reform in Developing Countries,’’ argues that the political determinants of competition policy reform, which includes both competition legislation and its enforcement, lie at the intersection of two competing forces: the insiders that comprise incumbent businesses and organized labor in these businesses; and the outsiders that comprise entrepreneurs, consumers, and unorganized labor. The main contention is that the insiders will deter competition reforms while outsiders will demand these changes. The underlying motivations for these competing groups to act in these ways are intuitive: the insiders, including the affiliated labor groups, gain by keeping their markets uncompetitive and extracting ‘‘monopoly rents’’; while the outsiders would want costless entry to these markets (entrepreneurs), competitive prices (consumers), and more firms and employment (unorganized labor). Very importantly, Weymouth introduces into the analyses the relevant political context within which these interactions take place. The a priori argument is that if the political system is characterized by more democracy rather than less, the probability of competition reform would be higher since the outsiders represent a bigger voting bloc that can effectively decide electoral outcomes in a democracy.

Competition Policy and the Competition Policy Review

Australia's 1990s competition reforms were a model for the rest of the world. But since 2005, these reforms have stalled. The 2015 Competition Policy Review Final Report details an agenda and a process to restart competition policy reform. The strength of the Final Report is its breadth. In particular, it considers the reform of human services in detail. The Final Report's weakness, however, is its failure to address the political barriers to reform and its lack of alternative implementation strategies.

EU competition policy and U.S. antitrust: a comparative analysis

The article provides a critical overview of the most important elements of EU competition policy reforms and presents a comparative analysis between EU and U.S. competition policies. The main focus is on the analysis of cartel enforcement policy, monopoly policy, and merger control.