Europe promotes competition more than America

Posted by The Washington Post

Europe promotes competition more than America

By Mario Monti

MILAN — President Trump’s “America First” motto may seem straightforward, but in reality, it’s full of contradictions. America is a nation of competing interests. So which part of it — industry, consumer or worker — does Trump aim to put first?

In the short and medium term, certain policies to put American industry first may clash with policies to put American consumers or workers first. For example, Trump’s “America First” policy does not have a clear answer when it comes to antitrust, an area where consumers’ interests are usually pursued more directly than producers’ interests, whether they are businesses or workers. Trump has not articulated how he will resolve this contradiction. In contrast, Europe has mostly found the right balance between these diverging interests.

When it comes to antitrust legislation, America once set the standard. Competition policy was first introduced in the United States in the late 19th century, while in Europe, it was only developed in the context of European integration starting in the 1950s. But today, the European system is stronger in many ways than the American scheme, which has been somewhat slower to adapt to new challenges. In competition policy, for example, the E.U. embraces not just antitrust but also controls how much aid a state can provide a business and provides other forms of oversight for how national governments intervene in economic and financial markets.

When I was European commissioner, I worked to make a single European market out of the various domestic markets and to promote competition in the resulting EU-wide market. The single market and liberalization and competition policies have reinforced each other within the E.U.’s coherent vision for breaking up monopolies. Against this backdrop, particularly in light of the efforts of Europe’s current commissioner for competition, Margrethe Vestager, to pursue Silicon Valley if necessary, the E.U. appears well ahead of the United States in implementing a vigorous competition policy.

One reason for this is the greater proximity of American antitrust authorities to electoral cycles, relative to the more shielded position of the E.U. The European Commission’s vigorous enforcement operates under an administrative system, where its decisions have direct and immediate legal effects. This is a strength that Europe should certainly maintain. But it would be wrong to believe that this in itself prompts the E.U. to be bolder, as if it did not have to undergo judicial review. Important decisions usually do end up being reviewed in the court.

Another important reason for the strength of antitrust in Europe is that it is conducted within a rational architecture. Especially following the E.U.’s “modernization” of competition laws starting in 2004, cases have been decentralized to national competition authorities. This has happened under an orderly system, overseen by the European Commission. In America, despite repeated attempts to reconsider the framework inherited from a distant past, there are only two federal antitrust authorities, the Department of Justice Antitrust Division and the Federal Trade Commission (FTC), where the division of competences is not crystal clear, plus 50 state attorneys general.

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