Is International Antitrust Possible?

Andrew T. Guzman, Boalt Hall, University of California, Berkeley

Abstract

This Article analyzes the economic incentives countries face in selecting an antitrust policy. It demonstrates that, in the presence of international trade, antitrust policies chosen by national governments will generally not lead to an outcome that is desirable from an international perspective. Professor Guzman identifies the reasons why nationally chosen policies are different from the optimal global policy and shows how the direction of the deviation from the optimal policy depends on trade patterns and the extent to which national laws are applied extraterritorially. The author concludes that, although international agreement is not impossible, the prospects for substantive cooperation on international antirust are slight. Unlike trade policy, an international agreement on antitrust policy would benefit some countries at the expense of others. The Article identifies the potential winners and losers from such an agreement and points out that because international compensatory transfer payments are unlikely, an agreement will be difficult to achieve.

Recognizing that agreement is nevertheless desirable to avoid welfare losses associated with a non-cooperative approach to international antitrust policy, Professor Guzman analyses the fora in which antitrust agreements are most likely to be negotiated and assesses the likelihood of success in each forum. Because concessions in other areas of negotiation may be necessary to compensate countries that will suffer a loss under a cooperative antitrust policy, the analysis suggests that negotiations on antitrust policy should be combined with the negotiation of other issues.