The Regulation/Competition Interaction

Abstract:     
Government regulation in markets is ubiquitous and takes many forms. In this paper we are concerned with two forms of such intervention- economic regulation and competition law and policy - and their relationship within the context of EU regulated markets (i.e. energy, telecommunications, water, railways). During the last 30 years, these sectors have gone through a major transformation (conventionally, but mistakenly called ‘deregulation’) that has altered both structures and legal frameworks. The causes of this reform mix a number of legal, economic, political and technological rationales that we group in two dimensions: institutional and substantive. From an institutional perspective, the old centralised system of control, focused exclusively on the state and the firms, has given place to a new equilibrium characterized by a multiplicity of actors and a decentralised regulatory paradigm. From a substantive perspective, the system is characterised by the use of competition law enforcement as a means to ‘control’ the outcomes of decentralisation. Within this setting, competition law has been used in a ‘regulatory fashion’ more than in any other jurisdiction. After thoroughly exploring these developments, we demonstrate that competition is not the antithesis of regulation, but a form of control, and further call for attention to the increased reliance on ‘regulatory antitrust’ in Europe.

Number of Pages in PDF File: 42

Keywords: Regulation, competition, institutions, competition law, energy, telecoms

JEL Classification: K21, K23, L33, L43, L94, L96, L97, L98

Accepted Paper Series