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Antitrust Law Journal

Volume 85, Issue 2

Future-Proofing Plural Antitrust Enforcement Models: Lessons from the United States and the European Union

Inge Graef

Summary

  • In most antitrust systems, enforcement is based on two pillars: public enforcement by administrative agencies and private enforcement through litigation.  The advantage of plural enforcement is that multiple enforcers monitor the health of markets. However, diverging approaches between these enforcers for the same matters could risk undermining the effectiveness of the antitrust laws.
  • By drawing lessons from the U.S. and EU antitrust systems, this article reflects on the question of how plural antitrust systems can be made future-proof.
  • Antitrust systems require some degree of both federalism and decentralization to allow for experimentation and to ensure consistency of approaches. Better coordination, however, is needed to keep the degree of experimentation through federalism or decentralization in balance.
Future-Proofing Plural Antitrust Enforcement Models: Lessons from the United States and the European Union
Yuichiro Chino via Getty Images

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In most antitrust systems, enforcement is based on two pillars: public enforcement by administrative agencies and private enforcement through actions before courts. In the context of public enforcement, the U.S. legal system is defined by a form of federalism in which both federal and state agencies are competent to enforce the antitrust laws. Federalism or decentralization is also present in the EU antitrust system, where the European Commission and national competition authorities (NCAs) are responsible in parallel for the public enforcement of EU antitrust rules. The presence of multiple actors in the enforcement of antitrust laws illustrates what this article will refer to as the plurality or plural nature of antitrust systems. The advantage of plural antitrust enforcement systems is that several enforcers monitor the health of markets. However, they also pose a real dilemma.

On the one hand, the complexity of current markets requires room for antitrust enforcers to experiment and learn which approaches to enforcement achieve the best outcomes for competition and should therefore prevail in the future. Antitrust enforcement is not an exact science and, although enforcers must collect evidence to support their cases, it is hard to predict in advance what the impact of antitrust intervention or the lack thereof will be. Divergences in approaches and outcomes of enforcement actions are therefore not necessarily undesirable in the long term; to the contrary, they may foster learning-by-doing and can be useful to draw lessons for the future.

On the other hand, consistency in the interpretation of antitrust rules and legal certainty for market players are also important values for effective enforcement. The presence of various enforcers can create frictions in the short term regarding the substantive interpretation of antitrust rules and the imposition of remedies. When one enforcer seeks to impose behavioral remedies to stop certain illegal practices, this could limit the ability of another enforcer to successfully claim in a different case against the same company that a structural remedy is needed to address the identified anticompetitive effects. Thus, diverging approaches between antitrust enforcers for the same matters could risk undermining the effectiveness of the antitrust laws.

Although the U.S. and EU antitrust enforcement systems both incorporate federalist elements, they strike a different balance between entrusting enforcement to a plurality of largely independent enforcers and integrating mechanisms in the system that contribute to coordination. In the European Union, for example, the European Commission retains a strong level of control over the overall interpretation and implementation of EU antitrust law, even though the NCAs in the EU Member States are becoming increasingly active as enforcers. The European Commission can even relieve NCAs of their jurisdiction to apply EU antitrust rules by opening its own antitrust proceedings into a given practice. In contrast, in the United States, individual states and often private parties can enforce federal antitrust laws without the consent of the federal government.

Unlike the European Union, where the European Commission is the dominant central enforcer, U.S. federal antitrust enforcement is spearheaded by both the Federal Trade Commission and the Antitrust Division of the Department of Justice. The U.S. model of dual federal enforcement has led to situations where the two federal agencies expressed conflicting opinions on the same matters.

Another distinct feature contributing to the higher degree of plurality of antitrust enforcement in the United States is the more prominent role of private enforcement in both state and federal courts. The initiative for, and the scope of, private actions is largely beyond the control of the antitrust agencies. Moreover, outcomes of private enforcement cases can shape the contours of antitrust law, which in turn can also impact public enforcement. At least historically, however, private actions have played only a minor role in the European Union.

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