The document proposes lead jurisdiction models to rationalize multiple competition policy enforcement procedures across jurisdictions. It discusses a voluntary lead jurisdiction model where one jurisdiction takes the lead role in coordination but decisions are non-binding, and a mandatory model where the lead jurisdiction handles the entire case and makes binding decisions. A specific multilevel model is proposed where the international level selects and monitors lead jurisdictions operating at national/regional levels. Key considerations in selecting a lead jurisdiction include which jurisdiction's market is most affected and has the capacity to investigate cross-border effects impartially. Challenges include incentive problems, differences in competition laws, and lack of eligible lead jurisdictions.

1. Towards Rationalizing Multiple Competition Policy
Enforcement Procedures:
The Role of Lead Jurisdiction Concepts
Prof. Dr. Oliver Budzinski
Professor of Economic Theory
Institute of Economics (Head)
Ehrenbergstraße 29
D-98693 Ilmenau, Germany
http://www.tu-ilmenau.de/wth
oliver.budzinski@tu-ilmenau.de
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2. International Competition Policy Coordination
- International Competition Network (ICN): success story of multilateral
cooperation
- BUT: no (explicit) case-related cooperation, no reduction of multiple parallel
procedures
- limited bilateral case-related cooperation
- economic problems of multiple procedures:
inefficient transaction costs for companies
inefficient taxpayer costs
divergent outcomes
scope for strategic competition policies
 Types of enhanced multilateral cooperation that is case-related.
 Lead Jurisdiction Models!
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3. Lead Jurisdiction Models
General Idea:
uncoordinated multiple procedures are replaced by a common
procedure led by a single competent jurisdiction (its authorities,
respectively).
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4. Lead Jurisdiction Models
- Voluntary Lead Jurisdiction Model:
lead jurisdiction as a coordinator
compiling and distributing evidence
non-binding proposal for decision according to mutual comity
opt-in and opt-out on an individual and case-by-case level
 multiple parallel procedures remain but in a streamlined way
- Mandatory Lead Jurisdiction:
lead jurisdiction handling the overall case (one-stop-shop)
investigation power assisted by other affected jurisdictions
binding decision based on total case effects in all affected jurisdictions
(= all geographically relevant markets)
 among the participants, multiple parallel procedures disappear
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5. A Specific Model
Multilevel Lead Jurisdiction Model:
- International/global level:
selection and appointment of lead jurisdiction
monitoring and supervision of lead jurisdictions
complaints against lead jurisdictions
- National/supranational/regional level (= existing competition policy regimes):
either lead jurisdiction or assisting the lead jurisdiction (if affected)
lj: application of own institutions by own authorities …
… but embracing all effects in all relevant markets (not minding where)
… in a non-discriminatory way
nlj: accepting investigation and decision as long as …
… international focus and non-discrimination hold, otherwise …
… complaint to the international/global level
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6. Selection of Lead Jurisdiction
As a potential lead jurisdiction for a given anticompetitive arrangement or
practice qualifies any competition policy regime
(a) whose internal markets represent a regional gravity of the market activities
(primary effects clause),
(b) whose agency enforces a working and nondiscriminatory competition law,
(c) whose agency disposes over sufficient capacities and competences for the
case in question, and
(d) that demonstrates (and has demonstrated) the willingness and experience
to investigate, handle and decide the case with a view of protecting all
affected consumers and markets, i.e. to safeguard comity to other
jurisdictions’ legitimate interests.
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7. Other Elements
Supervision, Sanctions, Complaints and Conflict Resolution
- review and monitoring of national provisions and practices regarding non-
discrimination
- review and monitoring of lead jurisdiction work regarding non-discrimination
- hearing of complaints on these issues
- sanction: disqualification as potential lead jurisdiction for future cases
Case Selection
- cases qualify that would lead to multiple procedures
- other cases remain national (supranational, regional) competence
- requires rules on:
threshold for ‚multiple‘ (Xplus rule)
sufficient nexus for claiming jurisdiction ( ICN best practices?)
specifics of cartels, mergers & acquisitions, dominance cases, …
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8. Limits I: The Incentive Problem
- lead jurisdiction agency  positive externality
- common interests: reciprocity
- conflicting interests (strategic jurisdictional interests): disciplining forces
peer pressure and reputation (strengthening the lead agency against domestic
lobbyism)
disqualification for future cases (abusing power now vs. maintaining future
influence)
more independent revision instances (courts)
 Model will fail for some cases!
(but: is there any model that works with highest-stake cases?)
 However: how many cases will be worth risking the (formal and informal)
sanctions?
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9. Limits II: The Divergent Laws Problem
- divergent laws, policies, theories and practices: the same case may be
decided differently depending on the selected lead jurisdiction
- this must be accepted!
- problem reduced by cooperation with lead jurisdiction throughout the
procedure?
- problem reduced by convergence work of the ICN (best practice
recommendations)?
- on the other hand: advantage of regime diversity!
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10. Limits III: The Lack-of-Eligible-Lead-
Jurisdiction Problem
- Market failure in the “market for lead jurisdictions”?
- only few jurisdictions may qualify (primary effects, capacities, competences,
resources, etc.)
- deliberate free-riding by jurisdictions with small-open economies (lack of
domestic cases)
- alleviating factors:
- cooperation of assisting jurisdictions may include offering capacities,
resources, and competencies (e.g. for sophisticated economic analysis)
- “international regionalization” offers scope for diversity of lead jurisdictions
- value of remaining connected with the system
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11. Conclusion
From an economic perspective, the charm of this concept is that it
- replaces the inbound focus of existing competition policy regimes by a focus
embracing all effects in the relevant geographic (international) market,
- provides a one-stop shop for the norm addressees (thus avoiding deficient
transaction and administration costs of multiple procedures),
- closes many loopholes due to the lead jurisdiction being powerful and also
providing protection of competition abroad, and
- maintains diversity of competition regimes because each assigned lead
jurisdiction handles and decides the case according to this regime’s antitrust
rules and procedures, just with the explicit inclusion of cross-border effects.
On the downside, it requires an international agreement on procedural rules
and willingness to accept
- procedural decisions by the international level and
- material decisions by the lead jurisdiction as long as all effects are treated
impartially irrespective of their jurisdictional location.
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12. Towards Rationalizing Multiple Competition Policy
Enforcement Procedures:
The Role of Lead Jurisdiction Concepts
Prof. Dr. Oliver Budzinski
Professor of Economic Theory
Institute of Economics (Head)
Ehrenbergstraße 29
D-98693 Ilmenau, Germany
http://www.tu-ilmenau.de/wth
oliver.budzinski@tu-ilmenau.de
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13. Readings
- Budzinski, Oliver (2004), The International Competition Network - Prospects and Limits on the
Road towards International Competition Governance, in: Competition and Change, Vol. 8 (3), pp.
243-266.
- Budzinski, Oliver (2008), The Governance of Global Competition: Competence Allocation in an
International Multilevel Competition Policy System, Cheltenham: Edward Elgar.
- Budzinski, Oliver (2009), An International Multilevel Competition Policy System, in: International
Economics and Economic Policy, Vol. 6 (4), pp. 367-389.
- Budzinski, Oliver (2014), International Antitrust Institutions, in: R. Blair & D. D. Sokol (eds.),
Oxford Handbook of International Antitrust Economics, Oxford: OUP, forthcoming.
- Campbell, Neil & Michael J. Trebilcock (1993), International Merger Review – Problems of Multi-
Jurisdictional Conflict, in: Erhard Kantzenbach et al. (eds.), Competition Policy in an
Interdependent World Economy, Baden-Baden: Nomos, pp. 129-163.
- Kerber, Wolfgang & Oliver Budzinski (2004), Competition of Competition Laws: Mission
Impossible?, in: Richard. A. Epstein and Michael. S. Greve (eds.), Competition Laws in Conflict -
Antitrust Jurisdiction in the Global Economy, Washington, D.C.: AEI Press, pp. 31-65.
- Trebilcock, Michael J. & Edward Iacobucci (2004), National Treatment and Extraterritoriality:
Defining the Domains of Trade and Antitrust Policy, in: Richard A. Epstein and Michael S. Greve
(eds.), Competition Laws in Conflict: Antitrust Jurisdiction in the Global Economy, Washington,
D.C.: AEI Press, pp. 152-176.
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