Politicisation of antitrust

A quick 3 minute speech to close a client function in our Paris office...

Many thanks all

I’m speaking to the last of our short dinner topics today, which is to talk both about the politicisation of antitrust and to look into our future. 

Many of the sessions this evening have already had an element of futurity to them, so I will also draw together some threads of earlier topics. 

I’ll start by highlighting the difficulties in addressing social equity issues through an efficiency lens.  From the very origins of modern antitrust we have had antitrust statues with dual purposes.  The first purpose has been to correct market failures derived from market power to promote competition thereby maximising economic efficiency (i.e., growing the economic pie).  The second purpose is one of fairness, equity and social justice, namely to protect against unfair behaviour by dominant firms, and to ensure that welfare gains are ultimately distributed to consumers (i.e., allocating the slices of the pie).

Interestingly, over the years, different countries around the world have balanced these objectives in different ways at different times.  During the 1990s, for example, we tended to have a polarisation of views across the Atlantic with the United States adopting a post-Chicago school view that emphasised efficiency, while the Europeans had a greater focus on distributional fairness.

 As one of the opening sessions commented this evening, what we have seen over the last decade, and particularly over the last few years under the Biden Administration in the United States, is the giving of greater weight to social objectives in antitrust law.   We spoke earlier about so-called 'Hipster antitrust'. 

But the difficulty with embracing social justice considerations into antitrust law is that we move away from objective economic standards based on tested microeconomic theory, and we start to move into inherently subjective political views.  As such, one theme from the ABA Spring Antitrust conference in Washington DC earlier this month was the increasing global politicisation of antitrust enforcement.  Such politiicisation seems inevitable as we find social justice issues receiving increased weight. 

Politicisation is difficult but manageable in economies with robust Rule of Law and independent regulatory institutions, but the politicisation of antitrust is more worrying in those countries with less robust Rule of Law and politicised institutions, of which there are a many in our world today.  Some of these jurisdictions are also globally influential.   This means the task of competition lawyers in dealing with multi-jurisdictional matters is becoming ever more complex.  We face interesting times.  

Moreover, given the dual objectives, we start to find they may conflict - and conventional antitrust law enforcement can sometimes defeat goals in the wider public, even global, interest.   I can speak, for example, to de-carbonisation initiatives.

The most efficient way to decarbonise industry sectors is via co-operation between economic actors.  For example, in Australia the challenge has been to close carbon-intensive coal fired power stations and switch to renewable electricity generation without the lights going out. However, co-ordination between competitors to close infrastructure amounts to collusion in most jurisdictions, hence runs into restrictions imposed by modern antitrust law.    

We also run into vested interests, divergent social views, conflicting scientific evidence, and political if not geopolitical tensions.  

So welcome to the role of antitrust lawyers in the mid 2020s.  We are not only navigating the nuances and vaguaries of domestic antitrust laws and statues, but increasing antitrust issues are playing out within a highly-politicised geopolitical arena, raising a new dimension of challenges for us all. 

But I have promised to end this dinner on an upbeat note.  Some 20 years ago my PhD thesis was published as a book about international competition law. I speculated that harmonisation of antitrust law would be unlikely anytime soon.  I’m happy to have been proved somewhat wrong.  We have seen a concerted global effort to create an international best practice that now delivers a remarkably consistent approach to antitrust regulation around the world. 

For that reason, being in a global law firm such as Norton Rose Fulbright does make a lot of sense We can compare different experiences across the world and share lessons to add value.  We can also do so with fine food and wine in beautiful Paris shortly before the 2024 Olympic Games.  And also, I must add, with amazing decor !

Thank you to NRF Paris for hosting this dinner.  Thank you for attending.  I hope you have found this session valuable and we have shared some useful insights from around the world.   Many thanks.