The Perils of Antitrust Proliferation: The Globalization of Antitrust and the Risks of Overregulation of Competitive Behavior

I. INTRODUCTION As Einer Elhauge and I noted in the preface to our recendy published casebook, modern antitrust law is global antitrust law.1 This is not so much because large corporations are subject to global antitrust rules, but because their behavior is being reviewed under the antitrust rules of an ever-growing number of jurisdictions. While the last six decades have seen repeated unsuccessful attempts to develop global antitrust rules,2 the 1980s and 1990s witnessed significant growth in the number of countries adopting antitrust law statutes and setting up specialized antitrust agencies and/or courts.3 Some one hundred countries currendy have antitrust rules in place, and die process has not ended yet. On August 1, 2008, China's Anti-Monopoly Law ("AML") entered into force,4 and various factors indicate that China will become a significant actor on the global antitrust scene.5 As a result, a typical merger between large US corporations now ordinarily requires approval not just in the US, but also in the EU, Canada, Brazil, South Africa, Russia, Korea, and the numerous other jurisdictions that have merger control rules and in which the activities of such corporations may produce market effects.6 Similarly, international cartels may trigger administrative, civil, or even criminal investigations not only in the US, but also in a range of other jurisdictions.7 The Microsoft cases bear testimony to the fact that firms engaging in certain practices, such as refusal to license or tying, may end up being condemned for abuse of dominance under the antitrust laws of different nations and, as a result, face a variety of remedies that are not necessarily consistent.8 Thus, businessmen, lawyers and policymakers can no longer content themselves with understanding only the antitrust law of their nation. They must also be conversant in the laws of other regimes that form part of the overall legal framework that regulates competitive behavior. Like many other scholars,9 1 have supported10 and even contributed11 to the development and adoption of antitrust law regimes in a growing number of jurisdictions. In recent years, however, my significant involvement in cases dealing with die application of antitrust laws and the participation of authorities from several jurisdictions has given me firsthand experience into some of the pitfalls of the decentralized globalization of antitrust. This decentralization process has taken place over the last few decades as a result of the concomitant failure of nations or international organizations to develop a global antitrust law regime and the decisions of many nations to adopt their own antitrust laws. While the notion of decentralized globalization may sound like an oxymoron, it represents an attempt to describe the fact that antitrust is today a global phenomenon, not through the adoption of supranational rules, such as in areas pertaining to environmental protection,12 labor rights,13 or human rights,14 but through the adoption of national rules often varying in scope, objectives, methods, and enforcement methodology. There is no doubt that the adoption of antitrust rules in a larger number of nations generates benefits, as it allows, for instance, these nations to protect their citizens against international cartels or excessive market concentration. This process has, however, also given rise to challenges for global corporations, some of which are well known. The decentralized globalization of antitrust increases: (1) the cost of doing business and the complexity of large-scale antitrust investigations, which now often have a multi-jurisdictional component; (2) the risk of contradictory decisions where a firm's behavior is reviewed by different antitrust authorities under different sets of rules; and (3) the likelihood that some decisions will be guided by protectionist motives. The objective of this Article is to raise awareness of a particular problem: in a world where the conduct of a firm is subject to different antitrust regimes, the most restrictive antitrust regime always wins. …