The International Competition Network at Seventeen

Alden Abbott —  28 March 2018

Introduction

Last week I attended the 17th Annual Conference of the International Competition Network (ICN) held in New Delhi, India from March 21-23.  The Delhi Conference highlighted the key role of the ICN in promoting global convergence toward “best practices” in substantive and procedural antitrust analysis by national antitrust (“competition”) agencies.  The ICN operates as a virtual network of competition agencies and expert “non-governmental advisers” (NGAs), not governments.  As such, the ICN promulgates “recommended practices,” provides online training and other assistance to competition agencies, and serves as a forum for the building of relationships among competition officials (an activity which facilitates cooperation on particular matters and the exchange of advice on questions of antitrust policy and administration).  There is a general consensus among competition agencies and NGAs (I am one) that the ICN has accomplished a great deal since its launch in 2001 – indeed, it has far surpassed expectations.  Although (not surprisingly) inter-jurisdictional differences in perspective on particular competition issues remain, the ICN has done an excellent job in helping ensure that national competition agencies understand each other as they carry out their responsibilities.  By “speaking a common antitrust language,” informed by economic reasoning, agencies are better able to cooperate on individual matters and evaluate the merits of potential changes in law and procedure.

Pre-ICN Program Hosted by Competition Policy International (CPI)

Special one-day programs immediately preceding the ICN have proliferated in recent years.  On March 20, I participated in the small group one-day program hosted by Competition Policy International (CPI), attended by senior competition agency officials, private practitioners, and scholars.  This program featured a morning roundtable covering problems of extraterritoriality and an afternoon roundtable focused on competition law challenges in the digital economy.

The extraterritoriality session reflected the growing number of competition law matters (particularly cartels and mergers) that have effects in multiple jurisdictions.  There appeared to be general support for the proposition that a competition authority should impose remedies that have extraterritorial application only to the extent necessary to remedy harm to competition within the enforcing jurisdiction.  There also was a general consensus that it is very difficult for a competition authority to cede enforcement jurisdiction to a foreign authority, when the first authority finds domestic harm attributable to extraterritorial conduct and has the ability to assert jurisdiction.  Thus, although efforts to promote comity in antitrust enforcement are worthwhile, it must be recognized that there are practical limitations to such initiatives.  As such, a focus on enhancing coordination and cooperation among multiple agencies investigating the same conduct will be of paramount importance.

The digital economy roundtable directed particular attention to enforcement challenges raised by Internet “digital platforms” (e.g., Google, Facebook, Amazon).  In particular, with respect to digital platforms, roundtable participants discussed whether new business models and disruptive innovations create challenges to existing competition law and practices; what recent technology changes portend for market definition, assessment of market power, and other antitrust enforcement concepts; whether new analytic tools are required; and what are good mechanisms to harmonize regulation and competition enforcement.  Although there was no overall consensus on these topics, there was robust discussion of multi-sided market analysis and differences in approach to digital platform oversight.

An ICN Conference Overview

As in recent years, the ICN Conference itself featured set-piece (no Q&A) plenary sessions involving colloquies among top agency officials regarding cartels, unilateral conduct, mergers, advocacy, and agency effectiveness – the areas covered during the year by the ICN’s specialized working groups.  Numerous break-out sessions allowed ICN delegates to discuss in detail particular developments in these areas, and to evaluate and hash out the relative merits of competing approaches to problems.  At least seven generalizations can be drawn from the Delhi Conference’s deliberations.

First, other international organizations that initially had kept their distance from the ICN, specifically the OECD, the World Bank, and UNCTAD, now engage actively with the ICN.  This is a very positive development indeed.  Research carried out by the OECD on competition policy – for example, on the economic evaluation of regulatory approaches (important for competition advocacy), digital platforms, and public tenders – has been injected as “policy inputs” to discrete ICN initiatives.  Annual Competition advocacy contests cosponsored by the ICN and the World Bank have enabled a large number of agencies (particularly in developing countries) to showcase their successes in helping improve the competitive climate within their jurisdictions.  UNCTAD initiatives on competition and economic development can be effectively presented to new competition agencies through ICN involvement.

Second, competition authorities are focusing more intensively on “vertical mergers” involving firms at different levels of the distribution chain.  The ICN can help agencies be attentive to the need to weigh procompetitive efficiencies as well as new theories of anticompetitive harm in investigating these mergers.

Third, the transformation of economies worldwide through the Internet and the “digital revolution” is posing new challenges – and opportunities – for enforcers.  Policy analysis, informed by economics, is evolving in this area.

Fourth, cartels and bid rigging (collusion in public tenders was the showcase “special project” at the Delhi Conference) investigations remain as significant as ever.  Thinking on the administration of government leniency programs and “ex officio” investigations aimed at ferreting out cartels continues to be refined.

Fifth, the continuing growth in the number and scope of competition laws and the application of those laws to international commerce places a premium on enhanced coordination among competition agencies.  The ICN’s role in facilitating such cooperation thus assumes increased importance.

Sixth, issues of due process, or procedural fairness, commendably are generally recognized as important elements of effective agency administration.  Nevertheless, the precise contours of due process, and its specific application, are not uniform across agencies, and merit continued exploration by the ICN.

Seventh, the question of whether non-purely economic factors (such as fairness, corporate size, and the rights of workers) should be factored into competition analysis is gaining increased traction in a number of jurisdictions, and undoubtedly will be a subject of considerable debate in the years to come.

Conclusion

The ICN is by now a mature organization.  As a virtual network that relies on the power to persuade, not to dictate, it is dynamic, not static.  The ICN continues to respond flexibly to the changing needs of its many members and to global economic developments, within the context of the focused work carried out by its various substantive and process-related working groups.  The Delhi Conference provided a welcome opportunity for a timely review of its accomplishments and an assessment of its future direction.  In short, the ICN remains a highly useful vehicle for welfare-enhancing “soft convergence” among competition law regimes.

 

Alden Abbott

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I am a Senior Legal Fellow at the Heritage Foundation. I write on antitrust, domestic and international regulatory policy, and law and economics. I am an Adjunct Faculty Member at George Mason Law School.

One response to The International Competition Network at Seventeen

  1. 
    R. Ian McEwin 2 April 2018 at 8:04 pm

    Undoubtedly the ICN has done some good in terms of raising antitrust law and economics expertise in other countries. However, soft power has been used to mostly dictate that developing countries adopt the laws and institutions of developed countries. A public choice analysis would suggest this is mainly in the interests of international antitrust lawyers and companies that want the same rules (even decisions) applied around the world irrespective of local economic and institutional conditions. Developing countries adhere because officials attend international conferences at five star hotels etc etc. Rarely are local conditions are taken into account – time for a public choice analysis of international antitrust ‘regulation’.