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Sponge

Journal of Antitrust Enforcement (2016) 1-26 ( Open Access - Available on the JAE website )

Posted: 2 Mar 2015 Last revised: 15 Jun 2017

Ariel Ezrachi

University of Oxford - Faculty of Law

Date Written: March 1, 2006

Abstract

When government officials argue for purity, one would expect raised eyebrows. But few question competition officials who, in speeches in foreign lands, praise the “purity” of competition law. They warn the hosts of polluting competition policy with social, ethical, and moral concerns. They warn of industrial policy, regulation, and rent-seeking. After the hosts provide dinner, the competition officials leave for the airport, where they prepare the same speech for another audience. The hosts will politely agree on the key objectives that competition policy should promote, but beneath this veneer, ill-defined terminology, open-ended goals and differences in enforcement philosophy remain.

Differences, in one’s understanding of the ends of competition law often transform into a ‘purity battle’ – the claim that competition analysis has been polluted by some, and that a pure approach, as propagated by others, would deliver better, optimal results. Often, these claims accompany large transactions, state aid, and foreign jurisdictions, possibly threatening the domination of national champions through enforcement of their competition laws. Sometimes these claims will be made by the competition agency. Sometimes by politicians or leading corporations. At times, the true source of the claim – politics, business, law or economics – may be hard to ascertain.

This is not to say that purity arguments are without merit. A consensus exists that competition law cannot be all things to all people: a panacea for every policy concern, ranging from labour to the protection of national champions. And yet, the pretence of purity may be misleading as it propagates a mirage of objectivity, clarity and analytical superiority – traits that are not always present.

Indeed, competition law is often perceived as a stable discipline. In fact, one is often reminded that competition law must be based on economic considerations and reject external social, or political objectives. This paper argues that this appealing view – which embodies a sense of purity – is merely an illusion. It ignores the ‘sponge-like’ characteristics of the law – its susceptibility to national peculiarities originating in its design and evident in its application and its exposure to intellectual and regulatory capture. While the idea of a stable, predictable and economically-based antitrust discipline is in all of our interests, these traits are not inherent to the law. They are forced onto the sponge in an attempt to ‘discipline’ its natural tendencies, and propagated as reality, to support its legitimacy.

Keywords: Competition law, Antitrust, Competition policy, Industrial Policy, Lobbying, Neo-classical economic theory, Behavioural economics, Jurisprudence

JEL Classification: B10, K21, L40, L44, L5

Suggested Citation

Ezrachi, Ariel, Sponge (March 1, 2006). Journal of Antitrust Enforcement (2016) 1-26 ( Open Access - Available on the JAE website ). Available at SSRN: https://ssrn.com/abstract=2572028 or http://dx.doi.org/10.2139/ssrn.2572028

Ariel Ezrachi (Contact Author)

University of Oxford - Faculty of Law ( email )

Oxford
United Kingdom

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