Challenges of International Co-operation in Competition Law Enforcement

More jurisdictions than ever before are applying competition law. Although the words in the law, the substantive elements of the laws vary to some extent, and procedures vary even more, the different regimes are remarkably similar. Common elements include prohibitions against cartels, review of mergers based primarily or exclusively on their effects on competition, and an ability to take action against firms with market power that behave anti-competitively. The dissemination of competition laws and competition enforcement authorities is an extremely positive development overall to which the work of the OECD Competition Committee has greatly contributed. Individual jurisdictions newly applying competition law, businesses based in longer-established competition jurisdictions and the world economy as a whole have all significantly benefitted from this development. Competition law is a key to preserving benefits of market operation at all steps in the global value chain. It protects the global value chain from the effects of restrictions on competition that raise market power and inefficiently increase costs down the value chain. However, while international trade has increased dramatically since 1990, the enforcement of competition law has remained primarily a domestic exercise. The increasingly cross-border dimension of business activities, together with the increase in the number of competition authorities creates additional complexity for cases with a multi-jurisdictional element. This complexity creates challenges for the effective and consistent enforcement of competition law. This note discusses these challenges, particularly the complexity of multiple authorities investigating the same international cartel or merger. Past discussions of the problems of multi-jurisdictional impacts often focused on the duplication of administrative costs. This paper has a different focus: on the likelihood, impacts and costs of disagreement, and on the complexity of coordination, when different jurisdictions investigate essentially the same matter. Mergers and cartels are the subjects of this discussion note, but many similar points would also arise for investigations featuring alleged abuses of dominance. The paper identifies some of the policy options to address the challenges discussed in the paper and that have been put forward in the on-going debate on international cooperation between competition authorities. However, it does not discuss them in great detail. These options should be further explored by competition authorities at the OECD and in other international fora to identify ways to effectively address the implications of globalisation for competition. The OECD Competition Committee is already working on policy options for international co-operation in competition enforcement cases. This paper provides some analytical and empirical analysis that will support the Committee discussion and future work.