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Aditya Bhattacharjea (Delhi School of Economics) & Nitya Nanda (CUTS) Cross-Border Issues and the Competition Act, 2002.

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Presentation on theme: "Aditya Bhattacharjea (Delhi School of Economics) & Nitya Nanda (CUTS) Cross-Border Issues and the Competition Act, 2002."— Presentation transcript:

1 Aditya Bhattacharjea (Delhi School of Economics) & Nitya Nanda (CUTS) Cross-Border Issues and the Competition Act, 2002

2 Cross-border competition issues n Most countries’ competition laws embody two basic principles: u Explicit or implicit exemption of RBPs with effects only in foreign markets. u The “effects doctrine” (jurisdiction over foreign RBPs with domestic effects) -- but difficult for LDCs to investigate and enforce their laws extra-territorially.

3 n Early international discussions on cross-border RBPs u RBPs affecting trade dealt with in 1946 Havana Charter to set up an ITO: opposed by US. u GATT did not deal with RBPs. u 1980 UNCTAD Set: Non-binding

4 International Cartels n More than 40 successfully prosecuted by US and EU n Many known to have operated in developing countries, but only Brazil (vitamins & lysine) and Korea (graphite electrodes) have some success in prosecution n India: Supreme Court ruling in ANSAC case: MRTP Act has no extra-territorial operation

5 Cross-border predatory pricing n Similar to dumping, but higher standard must be met u Cost standard excludes overheads u Market structure/ entry conditions/ recoupment standard n DSB decision in U.S. -- 1916 Act n India now the most active (ab)user of anti-dumping

6 Barriers to import competition n Import cartels n Control of distribution channels by domestic firms n WTO Kodak-Fuji case: competition policy can be examined in dispute settlement for allegations of discrimination or nullification and impairment of concessions made in GATT and GATS.

7 Competition Act 2002 n Sec. 32: clear statement of “effects doctrine” should undo ANSAC n But provision for injunction against imports in Sec. 33(2) could be self- defeating n Hard-core cartels now prohibited per se, but exemption for efficiency-enhancing joint ventures, without safeguards n Many technical criteria, but lack of expertise to implement them

8 International Cooperation n Growing number of bilateral / regional agreements with varying commitments u negative comity u supply of non-confidential information u assistance in investigation u positive comity u supra-national enforcement in EU, CARICOM, MERCOSUR

9 Existing WTO agreements n GATS (for elimination of RBPs in scheduled services): u “full and sympathetic consideration” of requests for consultations. u supply of “publicly available non- confidential information”. n TRIPS u as above for violation of laws regulating RBPs in IPR licenses u relaxes conditions for compulsory licenses granted to remedy RBPs.

10 Discussions at the WTO n Working Group set up by 1996 Singapore Ministerial to study issues n Developed countries: u unwilling to control cartels or mergers having effects in foreign markets u unwilling to apply antitrust standards to antidumping u willing to extend only `voluntary’ cooperation to LDC authorities

11 n Developing countries unwilling to take on fresh commitments in an unfamiliar area, with major resource requirements. n India opposed National Treatment n Consensus only on need for technical assistance and further study n Deadlock at Cancun (2003), Competition Policy formally dropped from Doha agenda by 2004 Framework Agreement.

12 The Way Forward n Ongoing discussions at u OECD (Global Competition Forum includes non-members); Policy Framework for Investment u International Competition Network -- focus on merger review u Periodic reviews of UNCTAD Set and meetings of International Group of Experts

13 A `soft’ agreement? n Technical assistance and capacity building n Consultation, information exchange, experience sharing n Peer review of national policies n Progressive cooperation in investigation n Non-controversial forum

14 Thank You

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