Discussions of the future of antitrust law (usually known outside the US as “competition law”) are often based on assumptions about the role of economics. Perhaps the most pivotal of these assumptions is that economics can provide a basis for global competition law convergence. It is pivotal, because choices and strategies about the future shape of global markets and of economic development often depend on it. “Convergence” is often seen as the only viable strategy for responding to the problems and weaknesses of the current legal framework for global markets. Yet the prospects for convergence rest on assumptions about the role of economics that deserve scrutiny.
The Article examines how the term “convergence” is used. It is often used loosely to refer to reducing differences among competition law systems, but that is too vague. Literally, it refers to a process in which competition law systems voluntarily move toward a point (a “convergence point”). Identifying that point and analyzing the implications of moving toward it thus become critical for evaluating convergence potential.
After reviewing how convergence came to play a central role in thinking about the future of competition law and how the role of economics came to occupy the central place in thinking about convergence strategies, the Article focuses on the issue of HOW economics can be expected to play the central role ascribed to it. The Article identifies three basic roles that economics plays in competition law. One is descriptive. Although this use may have some effect on convergence, it would necessarily be indirect and limited.
A second is normative. Here the claim is that economics should provide the standards of conduct for competition law – i.e., that the central normative question should be whether conduct is “anticompetitive”. If all competition law systems were to do this, it is claimed, a global standard would emerge. The Article looks closely at this claim, identifies its potential, and notes its limitations.
Economics can also provide, however, another point of convergence that deserves attention – its role in supplying methods of analysis. Here the claim is that increased use of economic methods can discipline decision making in ways that foster convergence. This form of convergence does not necessarily require particular outcomes. Nor does it dictate that economics provide competition law’s content. It does, however, impose standards on the decision-making process that limit the range of justifiable outcomes and thereby decrease the range of deviation among systems. This makes it adaptable to the needs, goals and resources of each jurisdiction, which in turn increases incentives for decision makers to move in this direction.
The importance of economics in competition law makes it an important element of any discussion of convergence. Loose references and unfounded assumptions about its roles can, however, cloud and distort discussion of the issues. As this Article shows, careful attention to the specific roles that economics can play in convergence reveals that if used appropriately it can contribute much to improving the legal framework of global competition.