Competition Policy and Merger Analysis in Deregulated and Newly Competitive Industries

Competition Policy and Merger Analysis in Deregulated and Newly Competitive Industries

Article Type: Books and resources From: Management of Environmental Quality: An International Journal, Volume 20, Issue 3

Edited by Peter C. Carstensen and Susan Beth Farmer,Edward Elgar,CheltenhamOctober 2008,264 pp.,ISBN 978 1 84542 313 1,£69.95

A number of important American industries have undergone a significant transformation from direct regulation to a market-oriented system, commonly referred to as deregulation. Recognized scholars examine seven of these industries – electricity, natural gas pipelines, telecommunications, railroads, airlines, hospitals, and banking – to show how competition policy generally and merger policy in particular have performed. In addition, the EU experience of deregulation is compared to that in the USA.

The policy of deregulation in the European Union offers an illuminating contrast to deregulation in American industries for four reasons:

1. 1.

   it is the result of conscious economic policy choice adopted from the outset of the Community;

2. 2.

   it paints with a broad brush, encompassing many industries;

3. 3.

   issues of federalism are more acute as the regulators in Brussels seek to impose market competition, or “liberalisation” in European parlance, and limit protectionism, or “state aid,” on the sovereign member states; and

4. 4.

   all three functions are bundled in the Directorate General for Competition, which is responsible for enforcing the antitrust laws, promoting liberalization and enforcing regulations against state aid in most sectors of the economy.

The European strategy of deregulation and competition has proceeded unevenly and has been more successful in some industries, and some countries, than others. The agricultural and financial industries, for example, are still characterized by important national protections while sectors including energy, both gas and electricity, and airline transportation have shaken off the chains of regulation and leapt ahead into growing intra-national competition.