This presentation by Judge Ian S. Forrester from the General Court of the European Union was made during the discussion “Are competition and democracy symbiotic?” held at the 16th meeting of the OECD Global Forum on Competition on 7 December 2017. More papers and presentations on the topic can be found out at oe.cd/283.

1. Competition Law & Democracy
By Ian S. Forrester
OECD- Global Forum on Competition
December 7, 2017

2. Early Concepts

3. The Founders’ Concerns
• Senator Sherman in 1890 aimed to protect small
enterprises from large industry alliances. ‘Antitrust’-
a populist campaign.
• ‘If we will not endure a king as a political power we
should not endure a king over production,
transportation, and sale of any of the necessities of
life’.
• The drafters of the Treaty of Rome aimed to provide
Europe with a means of protection against economic
abuse and a range of other concerns, but their goals
were very diverse.

4. Actual Experience
• Both founders’ visions were far away from sophistication
of modern economic antitrust theories. Too far?
• US antitrust evolved into a very powerful and severe
instrument of private and public enforcement of liberal
economic aspirations and principles. No longer populist.
• European competition law was initially used as a means
of enhancing market integration, discouraging cross
border contractual obstacles: a political objective.

5. Drafting the Treaty of Rome
• 1956- Brussels: Drafters have huge range of targets: cartels, price discrimination
based on nationality-race-religion. Dirigisme or free market approach?
• Price Discrimination:
M. Muller-Armack(D): ‘the question of discrimination or price
differential should not necessarily be considered from the point of view of
practices which harm competition…When it does not give rise to abuse and
is not based on discrimination for reasons of nationality, discrimination in
itself is in no way harmful to the competition regime but, on the contrary, is
one of its normal features’.
M. Donnedieu de Vabres(F): ‘on the contrary, insisted on the need to
draw up precise legal rules with regard to price discrimination and
differentials’.

6. What do these words mean?
 UK Embassies wrote in parallel to 6 Member States:
 Is a party to a pre-existing contract entitled to repudiate it if it falls
within the prohibited class of contracts indicated in Article 85(1) and
(2), and is not saved by Article 85(3)?
 Is it possible to say what further legislative steps, if any, in connection
with private restrictive practices, are required or contemplated by the
Government … as a consequence of the ratification of the Treaty of
Rome?
 In the event that the answers to these questions indicate that there is
doubt whether or how far Article 85 and 86 are of direct, immediate
and independent application…during the interim period, what steps if
any are contemplated by the Government…to resolve this doubt?

7. We must answer the Brits…
• In true European fashion all parties disagreed about
how:
▫ Italy: favoured a precise and comprehensive answer.
▫ France: proposed a simple answer, which would then
be followed by a more extensive one.
▫ The Netherlands: favoured six different replies to
six different embassies.
▫ The Commission: careful: who knows what the
Court will say.
• Solution to the pesky Brits? Set up a Committee. No
record of its deliberations…

8. Other Features of European Regime: 1
• Directorate General for Competition; an
advocate at the top.
• High prestige and talent of the officials.
• Power to enforce and power to penalise.
• Insulation from Member State lobbying.
• No whiff of corruption or misconduct.

9. Other Features of European Regime: 2
• Long cooperation with the US (then the world’s
leading agency).
• Success of the European project: prosperity flows
from freedom of opportunity across boarders.
• But:
• Very little private enforcement at national level.
• National champions got a somewhat gentler ride
than today.

10. Competition Law & the State
• Adam Smith:
▫ ‘kings and ministers … pretend to watch over the economy of private
people, and to restrain their expense... They are themselves always, and
without any exception, the greatest spendthrifts in the society. Let them
look well after their own expense, and they may safely trust private
people with theirs…’
▫ ‘ there is no art which one government sooner learns of another, than
that of draining money from the pockets of the people’.
• EU Competition law, unlike its American counterpart, applies to the
State itself.
• That was the most powerful insight of the drafters. The rules on
State aid and public undertakings have had a big impact in Europe;
tension with national traditions in several countries.

11. History & Today
• Neither the drafters of the Treaty of Rome, nor Senator Sherman
could foresee how their texts would be interpreted and expanded.
• Huge evolution in the law: Compulsory licencing (i.e.Volvo/Veng,
Magill, IMS and Microsoft); mergers; abuses; fines.
• Criminal Sanctions for cartels.
• The urgent drive for compliance.
• The intensity of cooperation between agencies.
• Worldwide acceptance of EU model of legislation by 100+ countries.
• Popular appetite for a sort of economic fairness, pursued nationally
according to very different rhythms.

12. Competition Law:
Enforcement & Democratic Practices

13. Competition law & Modernisation
• Having a competition law and a competition agency is one marker of
an emerging democracy.
• Can achieve huge change or be part of a process of general reform.
India: judges may use competition law as an economic enzyme to
remedy imperfect regulatory conditions.
Moldova: Competition law as part of the process of accession to the
EU. The enactment of the Law no. 183 of 2012, introduced European
Union competition rules to the Moldovan legal system by transposing
the relevant provisions of the TFEU and the Merger Regulation.
Italy: The work of the L'Autorità Garante della Concorrenza e del Mercato, in
the 1990s, as part of modernisation of national political/economic structures.

14. Agencies & Enforcement
• Having a Competition Agency does not necessarily mean perfect
enforcement.
• Experience, resources and political will contribute to the enforcement of
Competition Law.
• Lack of independence, ministerial interference, and lobbying restrict
enforcement: classic problems.
• Arguing a competition case in Athens, Brussels, London and Pristina will
involve different experiences.
• Visiting an agency in India, Mexico, South Africa, USA, Serbia, and The
Gambia also very different.
• Competition law enforcement naturally varies around the world.

15. Judicial Review:
An instrument of Accountability

16. Judicial Review & Democracy
• Lord Acton: ‘Power tends to corrupt, and absolute
power corrupts absolutely’.
• Judicial role is important
▫ Appellate jurisdiction (judicial review).
▫ Advisory jurisdiction (references to the CJEU from national
courts).
▫ Quality control.
▫ A check against delusions of grandeur.
▫ Respect but not undue deference.
▫ Thorough review of facts & law.
▫ Occasional defeats enhance the agency’s credibility.

17. Conclusions
• Democracy is a river which curves; competition
law likewise.
• Not all rivers are identical. They present parallel
but not identical problems.
• Resources are limited. Political will and
technical skill keep rivers clean!