Global Economy Attracts Global Antitrust Scrutiny

Economic globalization is increasingly being matched by greater antitrust enforcement as more nations scrutinize mergers and fight price-fixing.

For corporations it can mean more paperwork to complete mergers, as in the case of Google (NSDQ: GOOG), which filed with Australia, Brazil, Europe and the United States to buy DoubleClick. Australia and Brazil have approved the deal while Europe and the United States are still considering it.

And there are more venues to battle rivals. Advanced Micro Devices (NYSE: AMD) failed to convince Washington to probe Intel (NSDQ: INTC) for allegedly offering discounts to computer makers to keep them from using AMD processor chips. But Japan, South Korea and European Union have opened investigations.

Another consequence is that firms caught fixing prices face prosecution in more jurisdictions.
While the United States has encouraged other countries to create competition watchdogs, there are also worries in U.S. antitrust circles as the number of agencies grows.

India's new Competition Act, which has not yet been implemented, has raised eyebrows in Washington because of its low threshold for claiming jurisdiction on mergers. Further, approval for even noncontroversial deals could take 210 days.

And there is some fear in the United States that China will use its new law, which is expected to go into force next year, to protect domestic industry. "They could enforce it in a perfectly professional and responsible way, or they could really play games with it," said Barry Hawk, director of the Fordham Competition Law Institute.

GLOBAL ANTITRUST ENFORCEMENT RELATIVELY NEW

The first U.S. federal legislation came in 1890, when the Congress got fearful of corporate power and passed the Sherman Act which was used to break up the Standard Oil trust in 1911.

By 1960, just Australia, Britain, Canada, Chile, Germany, Japan, Norway and the United States had antitrust legislation, and most failed to enforce their laws.

"The United States had the only robust antitrust enforcement for many years," said Eleanor Fox, who teaches at the New York University School of Law.

But the Berlin Wall came down in 1989, and former Russian satellites in the process of creating market economies adopted antitrust laws on the advice of Washington and western Europe.

"They often did it on faith. They adopted it without knowing how to apply it," said Fox. "(The laws were) to contain the greed that they thought would come with capitalism."

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Source: Informationweek
By Rueters