Competition Law and the State: Competition Laws’ Prohibitions of Anti-Competitive State Acts and Measures

By Eleanor M. Fox (New York University) & Deborah Healey (University of New South Wales)

The role that the state place, both formally and informally, within the jurisdiction is dictated by factors that are political, cultural, and historical, and may relate to the stage of a nation’s economic development. In a market friendly environment with a strong commitment to competition law and policy a state can contribute to enhancing markets. State intervention can also have the opposite impact. There are a number of ways that the state may act to impede or hinder market competition, some of which can be addressed by competition law and some which must be addressed, if at all, by border competition policy.

In jurisdictions with efficient governance and corrupt leaders, the scope of competition law is limited by ineffective law and enforcement. Where most of the significant actors in the jurisdiction are state bodies, competition law is a very small part of the picture. The state itself may be the problem directly or as the facilitator of cartels. In many developing countries with traditions of statism and cronyism, corruption and discrimination may company weak institutions, a lack of funding, high barriers to entry and weak capital markets. The blockage of markets by the state or in complicitly with private business is common.

This UNCTAD Project sets out to study and map the extent to which competition laws apply to anti-competitive acts and measures by states. This study is elaborated in the article, Eleanor Fox and Deborah Healey (2014): When the State Harms Competition — The Role for Competition Law, 79 (3) Antitrust Law Journal, 769.

Continue Reading…