30 results
Australia
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- By Allan Fels, The Australia and New Zealand School of Government, Parkville, Victoria, Australia, Sharon Henrick, Mallesons Stephen Jaques, Sydney, New South Wales, Australia, Martyn Taylor, Gilbert + Tobin, Sydney, New South Wales, Australia
- General editor Maher M. Dabbah, Queen Mary University of London, Paul Lasok QC
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- Merger Control Worldwide
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- 05 November 2014
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- 31 May 2012, pp 78-125
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Summary
Overview
The Trade Practices Act 1974 (Cth) contains the primary rules for the regulation of mergers which may have detrimental effects on competition in Australia. Australia also has rules which apply to mergers in specific industries, such as the media industry and the banking sector, as well as foreign investment rules.
Sections 50 and 50A of the Trade Practices Act regulate acquisitions of shares and/or assets. Section 50 is the key section. It prohibits mergers or acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in a market in Australia.
The Trade Practices Act does not contain a mandatory pre-merger notiication process. In practice, however, virtually all mergers that affect, or could conceivably affect, competition in Australia are voluntarily notiied in advance of their completion to the Australian Competition and Consumer Commission (‘the Commission’ or ACCC). If the Commission considers a merger would be likely to substantially lessen competition then it may apply to the Federal Court of Australia to obtain orders to prevent the merger from completing.
Notiications to the Commission are made using either a formal or an informal merger clearance procedure. However, the formal merger clearance procedure has not yet been used and the Commission has expressed a clear preference for applicants to use the informal clearance procedure.
Hong Kong
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- By Martyn Taylor, Gilbert + Tobin, Sydney, Australia, associated with King & Wood, Hong Kong, Martyn Huckerby, Mallesons Stephen Jaques, Shanghai, China
- General editor Maher M. Dabbah, Queen Mary University of London, Paul Lasok QC
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- Merger Control Worldwide
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- 05 November 2014
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- 31 May 2012, pp 627-648
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Summary
Introduction
Under the principle of ‘one country, two systems’, the Hong Kong Special Administrative Region of the People’s Republic of China (‘Hong Kong’) runs on economic and political systems different from those of mainland China. Accordingly, the new competition laws of the People’s Republic of China do not apply to Hong Kong.
Hong Kong does not yet have a generic competition law, but rather has sector-specific competition laws, currently limited to the telecommunications and broadcasting sectors. Only the telecommunications sector is currently subject to a merger control provision, namely section 7P of the Telecommunications Ordinance (Cap. 106) of Hong Kong (‘the Telecommunications Ordinance’).
However, a Competition Bill was gazetted on 2 July 2010 and introduced into the Legislative Council of Hong Kong (LegCo) on 14 July 2010. A Bills Committee is currently scrutinising the Bill and it is scheduled to be enacted during 2012. If enacted into law, the resulting ‘Competition Ordinance’ will be the irst generic cross-sectoral competition law for Hong Kong.
The proposed Competition Ordinance includes a merger control provision. However, the merger control provision will initially be limited only to telecommunications licensees. Moreover, the Competition Ordinance will have a staged application such that the merger control provision is unlikely to become legally enforceable until 2014. Until that time, the Hong Kong merger control regime is limited to the telecommunications-speciic merger provision set out in section 7P of the Telecommunications Ordinance.
Contributors
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- By Aakash Agarwala, Linda S. Aglio, Rae M. Allain, Paul D. Allen, Houman Amirfarzan, Yasodananda Kumar Areti, Amit Asopa, Edwin G. Avery, Patricia R. Bachiller, Angela M. Bader, Rana Badr, Sibinka Bajic, David J. Baker, Sheila R. Barnett, Rena Beckerly, Lorenzo Berra, Walter Bethune, Sascha S. Beutler, Tarun Bhalla, Edward A. Bittner, Jonathan D. Bloom, Alina V. Bodas, Lina M. Bolanos-Diaz, Ruma R. Bose, Jan Boublik, John P. Broadnax, Jason C. Brookman, Meredith R. Brooks, Roland Brusseau, Ethan O. Bryson, Linda A. Bulich, Kenji Butterfield, William R. Camann, Denise M. Chan, Theresa S. Chang, Jonathan E. Charnin, Mark Chrostowski, Fred Cobey, Adam B. Collins, Mercedes A. Concepcion, Christopher W. Connor, Bronwyn Cooper, Jeffrey B. Cooper, Martha Cordoba-Amorocho, Stephen B. Corn, Darin J. Correll, Gregory J. Crosby, Lisa J. Crossley, Deborah J. Culley, Tomas Cvrk, Michael N. D'Ambra, Michael Decker, Daniel F. Dedrick, Mark Dershwitz, Francis X. Dillon, Pradeep Dinakar, Alimorad G. Djalali, D. John Doyle, Lambertus Drop, Ian F. Dunn, Theodore E. Dushane, Sunil Eappen, Thomas Edrich, Jesse M. Ehrenfeld, Jason M. Erlich, Lucinda L. Everett, Elliott S. Farber, Khaldoun Faris, Eddy M. Feliz, Massimo Ferrigno, Richard S. Field, Michael G. Fitzsimons, Hugh L. Flanagan Jr., Vladimir Formanek, Amanda A. Fox, John A. Fox, Gyorgy Frendl, Tanja S. Frey, Samuel M. Galvagno Jr., Edward R. Garcia, Jonathan D. Gates, Cosmin Gauran, Brian J. Gelfand, Simon Gelman, Alexander C. Gerhart, Peter Gerner, Omid Ghalambor, Christopher J. Gilligan, Christian D. Gonzalez, Noah E. Gordon, William B. Gormley, Thomas J. Graetz, Wendy L. Gross, Amit Gupta, James P. Hardy, Seetharaman Hariharan, Miriam Harnett, Philip M. Hartigan, Joaquim M. Havens, Bishr Haydar, Stephen O. Heard, James L. Helstrom, David L. Hepner, McCallum R. Hoyt, Robert N. Jamison, Karinne Jervis, Stephanie B. Jones, Swaminathan Karthik, Richard M. Kaufman, Shubjeet Kaur, Lee A. Kearse Jr., John C. Keel, Scott D. Kelley, Albert H. Kim, Amy L. Kim, Grace Y. Kim, Robert J. Klickovich, Robert M. Knapp, Bhavani S. Kodali, Rahul Koka, Alina Lazar, Laura H. Leduc, Stanley Leeson, Lisa R. Leffert, Scott A. LeGrand, Patricio Leyton, J. Lance Lichtor, John Lin, Alvaro A. Macias, Karan Madan, Sohail K. Mahboobi, Devi Mahendran, Christine Mai, Sayeed Malek, S. Rao Mallampati, Thomas J. Mancuso, Ramon Martin, Matthew C. Martinez, J. A. Jeevendra Martyn, Kai Matthes, Tommaso Mauri, Mary Ellen McCann, Shannon S. McKenna, Dennis J. McNicholl, Abdel-Kader Mehio, Thor C. Milland, Tonya L. K. Miller, John D. Mitchell, K. Annette Mizuguchi, Naila Moghul, David R. Moss, Ross J. Musumeci, Naveen Nathan, Ju-Mei Ng, Liem C. Nguyen, Ervant Nishanian, Martina Nowak, Ala Nozari, Michael Nurok, Arti Ori, Rafael A. Ortega, Amy J. Ortman, David Oxman, Arvind Palanisamy, Carlo Pancaro, Lisbeth Lopez Pappas, Benjamin Parish, Samuel Park, Deborah S. Pederson, Beverly K. Philip, James H. Philip, Silvia Pivi, Stephen D. Pratt, Douglas E. Raines, Stephen L. Ratcliff, James P. Rathmell, J. Taylor Reed, Elizabeth M. Rickerson, Selwyn O. Rogers Jr., Thomas M. Romanelli, William H. Rosenblatt, Carl E. Rosow, Edgar L. Ross, J. Victor Ryckman, Mônica M. Sá Rêgo, Nicholas Sadovnikoff, Warren S. Sandberg, Annette Y. Schure, B. Scott Segal, Navil F. Sethna, Swapneel K. Shah, Shaheen F. Shaikh, Fred E. Shapiro, Torin D. Shear, Prem S. Shekar, Stanton K. Shernan, Naomi Shimizu, Douglas C. Shook, Kamal K. Sikka, Pankaj K. Sikka, David A. Silver, Jeffrey H. Silverstein, Emily A. Singer, Ken Solt, Spiro G. Spanakis, Wolfgang Steudel, Matthias Stopfkuchen-Evans, Michael P. Storey, Gary R. Strichartz, Balachundhar Subramaniam, Wariya Sukhupragarn, John Summers, Shine Sun, Eswar Sundar, Sugantha Sundar, Neelakantan Sunder, Faraz Syed, Usha B. Tedrow, Nelson L. Thaemert, George P. Topulos, Lawrence C. Tsen, Richard D. Urman, Charles A. Vacanti, Francis X. Vacanti, Joshua C. Vacanti, Assia Valovska, Ivan T. Valovski, Mary Ann Vann, Susan Vassallo, Anasuya Vasudevan, Kamen V. Vlassakov, Gian Paolo Volpato, Essi M. Vulli, J. Matthias Walz, Jingping Wang, James F. Watkins, Maxwell Weinmann, Sharon L. Wetherall, Mallory Williams, Sarah H. Wiser, Zhiling Xiong, Warren M. Zapol, Jie Zhou
- Edited by Charles Vacanti, Scott Segal, Pankaj Sikka, Richard Urman
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21 - New Zealand
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- By Justice Jill Mallon, High Court, Wellington, New Zealand, David Blacktop, Bell Gully, Wellington, New Zealand, Martyn Taylor, Mallesons Stephen Jaques, Sydney, Australia
- General editor Maher M. Dabbah, Queen Mary University of London, K. P. E. Lasok QC
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- Merger Control Worldwide
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- 30 July 2009
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- 29 May 2008, pp 109-110
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Summary
Undertakings
The Commerce Commission has outlined the factors it considers in assessing the extent to which the submitting undertaking would allay anticipated concerns resulting from a given merger operation. The Commission examines three types of risks which could undermine the efficacy of an undertaking:
composition risks: risks associated with the scope of the assets to be divested, which may not be sufficient to attract a buyer or may not allow a purchaser to operate effectively and viably in the market;
purchaser risks: risks associated with the person purchasing the assets. The Commission will consider the incentives for an applicant to divest to a strategically weak purchaser; and
asset risks: risks associated with the loss of value or competitive capability of the assets during the divestment process.
Substantive assessment and test
The High Court's recent decision in Commerce Commission v. New Zealand Bus (2006) 3 NZCCLR 111 provided useful guidance on the “substantial lessening of competition” test in New Zealand. Prior to this decision, there was limited case law on the topic, with the High Court's decision in Brambles New Zealand Ltd v. Commerce Commission, the only statement on this test.
Miller J's judgment confirmed the principles that had been applied in previous cases, and his decision provides a useful summary of the way to approach the question of whether a substantial lessening of competition as a result of a merger operation is likely in the New Zealand context:
The question whether a substantial lessening of competition is likely is determined by comparing the likely state of competition should the acquisition proceed (the factual) with the likely state of competition if it does not (the counterfactual): Tru Tone Ltd v Festival Records [1988] 2 NZLR 352 (CA).
3 - Australia
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- By Professor Allan Fels, The Australia and New Zealand School of Government, Parkville, Australia, Sharon Henrick, Mallesons Stephen Jaques, Sydney, Australia, Dr Martyn Taylor, Mallesons Stephen Jaques, Sydney, Australia
- General editor Maher M. Dabbah, Queen Mary University of London, K. P. E. Lasok QC
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- Merger Control Worldwide
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- 30 July 2009
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- 29 May 2008, pp 15-17
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Summary
Notification requirements and procedures
This Supplement identifies proposed amendments to the existing “informal clearance” procedure used by the Australian Competition and Consumer Commission for merger review in Australia. This Supplement adopts the defined terms used in the original Australia chapter of Merger Control Worldwide and is intended to replace section 3.1.3 and Figure 1 of the original Australia chapter.
Relevantly, the Trade Practices Legislation Amendment Bill (No. 1) 2005 (the “Dawson Bill”) referred to in section 1.1 of the original chapter was defeated in the Australian Senate in October 2005 and so has not been enacted into law. The Dawson Bill was intended to introduce a new formal merger clearance procedure that would operate in parallel with the existing informal clearance procedure in Australia. A political impasse is delaying the reintroduction of the merger reform provisions of the Dawson Bill into the Australian Parliament although it is likely to be reintroduced during 2006 or 2007.
Informal clearance
The third option is to seek informal clearance from the Commission for the merger on a confidential or non-confidential basis. If the Commission grants informal clearance to a merger, the parties to the merger obtain a “comfort letter”, which usually states that the Commission will not oppose the merger but reserves the right to do so should new information come to light. While a comfort letter is not binding on the Commission, it is rare for the Commission to grant informal clearance and subsequently oppose the merger.
6 - Would the WTO provide a suitable institutional vehicle for an international competition agreement?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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- 28 September 2006, pp 147-184
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Summary
The WTO is sometimes described as a ‘free trade’ institution, but that is not entirely accurate. The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition.
(World Trade Organisation Secretariat, 1999)Part II of this book, commencing with Chapter 6, considers whether the WTO would provide a suitable institutional vehicle for an international competition agreement.
Importantly, Chapter 6 of this book does not consider whether the WTO would provide the optimal institutional framework for an international competition agreement. An analysis of whether the WTO would provide the optimal institutional framework is deferred to Chapter 10. Rather, Chapter 6 only considers, the extent to which it would be feasible to incorporate an international competition agreement into the WTO and the likely benefits of doing so.
Chapter 6 has three principal sections:
Section 6.1 identifies the limited historical inclusion of competition law within the GATT, the evolution of the WTO, and various historical initiatives to include competition law within the GATT and the WTO. Section 6.1 identifies aspects of competition law incorporated into the WTO by the Uruguay Round.
Section 6.2 considers the theoretical relationship between international competition law and trade law and establishes the context for assessing proposals to integrate the two disciplines.
Section 6.3 identifies areas of convergence between international competition law and international trade law and proposes a theoretical means to reconcile both laws, based on the concept of market contestability.
11 - What is the optimal content for a WTO competition agreement?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 28 September 2006, pp 336-369
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Summary
Following from the analysis in Chapter 10, Chapter 11 now considers the optimal substantive content of a WTO competition agreement.
Chapter 4 of this book analysed similarities between the competition laws of the APEC nations and identified the substantive elements of competition law that could be regulated by a WTO competition agreement. Chapter 4 also identified a number of principles and obligations that could be appropriately incorporated into a WTO competition agreement. However, in order to apply the conclusions from Chapter 4, it is necessary to identify the appropriate level of abstraction, and particular legal character, that should be accorded to such principles and obligations when they are drafted into a WTO competition agreement.
In undertaking this analysis, the following four questions are fundamental:
To what extent should any WTO competition agreement seek to achieve harmonisation of domestic competition laws?
To what extent should any WTO competition agreement seek to prescribe minimum international standards?
To what extent should the provisions of a WTO competition agreement be legally enforceable as binding precepts of international law?
To what extent should any WTO competition agreement seek to modify existing WTO rules and jurisprudence?
Chapter 11 considers each of these four questions in turn below. These four issues are fundamental to the negotiation of a WTO competition agreement as they determine the level of agreement that will be required between nations on any substantive competition obligations.
12 - What is the optimal structure for a WTO competition agreement?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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- 28 September 2006, pp 370-394
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APPENDIX: Draft negotiating text for a plurilateral WTO competition agreement
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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- 28 September 2006, pp 435-482
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List of abbreviations
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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- 28 September 2006, pp xv-xvi
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10 - What are the optimal objectives and principles for a WTO competition agreement?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 28 September 2006, pp 289-335
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Summary
Parts II and III of this book reached a number of conclusions regarding the desirability and theoretical and practical scope for any WTO competition agreement. However, this book has not yet considered whether the WTO would provide the optimal institutional vehicle for any international competition agreement. Part III of this book therefore identifies the optimal form for an international competition agreement.
Chapter 10 of this book has four main sections:
Section 10.1 considers whether the WTO would provide the optimal institutional vehicle for an international competition agreement relative to the most likely alternative institutional vehicles.
Section 10.2 analyses three previous proposals for the incorporation of competition law into the WTO and identifies the respective merits and shortcomings of these proposals. Section 10.2 identifies how the previous shortcomings could be avoided.
Sections 10.3 and 10.4 identify the key objectives and core principles that should guide any WTO competition agreement and the extent to which these would correlate with pre-existing WTO objectives and core principles.
Chapter 10 concludes that the WTO would provide the optimal institutional vehicle for an international competition agreement.
What would be the optimal institutional vehicle for an international competition agreement?
In order to identify whether the WTO would provide the optimal institutional vehicle for an international competition agreement, it is necessary to compare the WTO with the other most likely alternative institutional vehicles.
8 - Would competition regulation of trade measures promote competition?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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- 28 September 2006, pp 224-259
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Summary
Chapter 8 continues the examination commenced by Chapter 7 into the relationship between international competition law and international trade law. Chapter 8 now considers international trade measures from a competition perspective, adopting the converse but complementary view to Chapter 7.
The distinction between the analysis set out in Chapters 7 and 8 of this book is a subtle but crucial one:
Chapter 7 adopted an international trade perspective on anti-competitive conduct. Chapter 7 considered the extent to which private anti-competitive conduct is not effectively regulated by either international trade law or domestic competition law, with resulting adverse affects on international trade. Given that private anti-competitive conduct is not usually directly regulated by international trade law (as evidenced by the Kodak-Fuji case), Chapter 7 focused primarily on under-regulation in the application, enforcement and substantive content of domestic competition laws. Chapter 7 concluded that such under-regulation could be addressed by an international competition agreement.
Chapter 8 now adopts an international competition perspective on international trade measures. Chapter 8 therefore considers the extent to which governmental trade measures are not effectively regulated by either international trade law or domestic competition law, with resulting adverse affects on international competition. Given that governmental trade measures are not usually directly regulated by domestic competition laws, Chapter 8 focuses primarily on under-regulation in the application, enforcement and substantive content of international trade law. Chapter 8 similarly considers how such under-regulation could be addressed by an international competition agreement.
4 - Is there a sufficient basis for an international competition agreement?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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- 28 September 2006, pp 71-105
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Summary
APEC economies have long recognised the strategic importance of developing competition principles to support the strengthening of markets to assure and sustain growth in the region.
(Asia Pacific Economic Co-operation, Shanghai, 2001)Following from the conclusion in Chapter 3 of this book that an international competition agreement is desirable, Chapter 4 considers whether there is a sufficient basis for an international competition agreement.
Chapter 4 identifies whether there is sufficient commonality between the competition laws of a sample group of nations which otherwise exhibit considerable diversity, namely the 21 nations of the Asia Pacific Economic Co-operation (‘APEC’). By analysing the extent of convergence of the competition laws of these APEC nations, Chapter 4 seeks to identify common themes upon which an international competition agreement could be based. Chapter 4 also seeks to distil a set of commonly accepted principles that may provide the basis for any international competition agreement and makes a number of preliminary recommendations for the content of such an agreement.
Chapter 4 concludes that, notwithstanding such diversity, there is sufficient commonality among nations to provide a basis for an international competition agreement.
Competition laws within the Asia-Pacific Economic Community
APEC as a proxy for the international community
In order to identify whether there is a sufficient basis for an international competition agreement, it is necessary to consider the extent to which the existing domestic competition laws of different nations are similar or dissimilar.
3 - Is an international competition agreement desirable?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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Summary
We have seldom seen neighbourhood affection among nations. The reverse is almost the universal truth.
(Thomas Jefferson, 1803)Chapter 2 concluded that competition law is beneficial. Chapter 3 now considers whether an international competition agreement would be desirable. Chapter 3 undertakes this task in the following manner:
Section 3.1 outlines how trends in globalisation and multinational corporate expansion have exacerbated the risk of cross-border anti-competitive conduct. Such conduct is not currently regulated effectively on an international basis. Section 3.1 identifies that cross-border spillovers (or ‘externalities’) provide an important policy justification for an international competition agreement.
Section 3.2 identifies the current approach of the international community to the regulation of cross-border anti-competitive conduct, namely via the extraterritorial application of competition laws. Section 3.2 identifies inherent difficulties in an extraterritorial approach, including jurisdictional conflict.
While beyond the scope of this book, this chapter also identifies a number of economic models which conclude that greater international co-ordination of competition law would be welfare enhancing where each nation enforces its competition laws on an extraterritorial basis in accordance with its national self-interest. Chapter 3 therefore establishes that an international competition agreement is desirable and would be welfare enhancing relative to the status quo.
The globalisation of competition
Globalisation of the international economy
Over the last three decades the world has experienced a period of unprecedented economic integration. World trade as a proportion of global production increased from some 10% in 1970, to 34% by 2000.
International Competition Law
- A New Dimension for the WTO?
- Martyn D. Taylor
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- 17 July 2009
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- 28 September 2006
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Should an international competition agreement be incorporated into the World Trade Organization? Taylor examines this question, arguing that such an agreement would be beneficial. Existing initiatives towards the regulation of cross-border, anti-competitive conduct have clear limitations that could be overcome by an agreement, and the WTO would provide the optimal institutional vehicle for it. At a practical level, Taylor points out, an international competition agreement could address under-regulation and over-regulation in the trade-competition regulatory matrix, realizing substantive benefits to international trade and competition. This book identifies the appropriate content and structure for a plurilateral competition agreement and proposes a draft negotiating text with accompanying commentary, and as such will be an invaluable tool for policy-makers, WTO negotiators, competition and trade lawyers, and international jurists.
Index
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 17 July 2009
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- 28 September 2006, pp 483-500
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5 - Have existing cross-border initiatives proved sufficient?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 28 September 2006, pp 106-144
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Summary
The derivation of a common antitrust standard among nations – a truly international antitrust law – does not arise simply through legislative act. It must be the logical culmination of the economic, political, and social development of a nation or groups of nations.
(Kintner, 1973)Chapter 5 of this book analyses existing initiatives at the bilateral, plurilateral and multilateral levels relating to the regulation of cross-border competition. Chapter 5 considers whether these initiatives alone may already be sufficient to address the externalities identified in Chapter 3 of this book. Chapter 5 has three principal sections:
Section 5.1 considers the nature of bilateral competition agreements and their limitations. Section 5.1 examines the evolution of such agreements from ‘first generation’ to ‘fourth generation’ agreements over the past three decades and identifies current initiatives towards increased bilateral co-operation. Section 5.1 also identifies positive comity and negative comity as important mechanisms to address the externalities identified in Chapter 3 of this book.
Section 5.2 identifies two important plurilateral competition initiatives, namely within the EU and APEC. Section 5.2 analyses the advantages and disadvantages of both of these initiatives and their current limitations. Section 5.2 identifies elements of plurilateral initiatives that could have multinational application and considers whether plurilateral initiatives alone would sufficiently regulate cross-border anti-competitive conduct.
Section 5.3 identifies existing multilateral competition initiatives, including initiatives within UNCTAD, the OECD and the WTO. Section 5.3 identifies the limitations of these initiatives and whether they could provide a vehicle for the development of a multilateral competition treaty.
1 - Introduction
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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Summary
Modern business operates in a world that is highly economically integrated, but that remains politically, culturally and legally diverse. Notwithstanding globalisation, law and politics is still organised primarily on the basis of nation-states. National laws reflect significant social and political differences between nations. A fragmented international regulatory environment has evolved in which each government has developed its own unique approach to the regulation of conduct that affects its territory, often without regard to the effect of that regulation on other nations.
Competition law (or ‘antitrust law’ as it is known in the United States) is one form of such regulation. Competition law involves laws that promote or maintain market competition by regulating anti-competitive conduct. However, modern competition laws have traditionally evolved to promote and maintain competition in markets principally within the territorial boundaries of each nation-state. Domestic competition laws are not usually concerned with activity beyond territorial borders unless it has significant domestic effects.
This limited territorial approach has created difficulties in an increasingly globalised world in which transactions subsume multiple territorial spaces. Anti-competitive conduct may have adverse economic effects in multiple jurisdictions, unconfined by territorial boundaries. In this manner, while competition law remains essentially national, competition issues have become increasingly international, creating a regulatory disjunction. To the extent the effect of anti-competitive conduct crosses territorial boundaries, it may escape effective regulation.
On the one hand, under-regulation may occur.
2 - Is competition law beneficial?
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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Summary
Of all human powers operating on the affairs of mankind, none is greater than that of competition.
(Henry Clay, 1832)Part I of this book establishes that an international competition agreement is desirable.
An important first step in analysing the desirability of an international competition agreement is to determine the extent to which competition law is beneficial. While it is widely assumed that competition law is beneficial, the precise causal reasons why (and the magnitude of those benefits) are not widely understood. This chapter addresses these issues in the following manner:
Section 2.1 examines the theoretical rationale, modus operandi and philosophy underlying modern competition law. Modern competition law is principally concerned with economic goals, namely promoting the efficient operation of markets in order to maximise social welfare. Section 2.1 concludes that the welfare benefits of competition law are significant.
Section 2.2 identifies that the efficiency objective of competition law may be complemented by distributional objectives. Such distributional objectives are controversial. Modern competition laws often attempt to reconcile inherent tensions between the objectives of economic efficiency and distributional fairness.
Section 2.3 examines the relationship between competition law and other economic policies. Competition law is the principal instrument of competition policy and creates an environment conducive to sectoral deregulation. Section 2.3 identifies that such deregulation itself has a significant impact on economic welfare.
Chapter 2 confirms that competition law has a significant positive effect on economic welfare. Competition law deters anti-competitive conduct that may otherwise result in welfare losses to society.
PART III - The Optimal Form for a WTO Competition Agreement
- Martyn D. Taylor, Mallesons Stephen Jaques
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- International Competition Law
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- 28 September 2006, pp 287-288
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