June 30, 2015—Which nation took almost half a century to introduce a system of competition law? Answer: the United States (from 1890 to the late 1930s).
If it took that long for the United States, imagine how much “experimentation, assessment, and refinement” is required to introduce such a system in countries like China “making the transition from reliance on central planning and state ownership toward a market-based economic regime,” said William E. Kovacic, a law professor at George Washington University.
“It can take decades to build the relevant institutions and the capacity of enforcement agencies” to apply new competition laws effectively, said Kovacic, also a former chairman of the U.S. Federal Trade Commission, in prepared and impromptu remarks to Nathan Associates staff. He spoke as a participant in the firm’s monthly speakers series.
The counsel to stand back and take the long view is relevant to many of Nathan Associates’ services. In addition to supporting private antitrust litigation in the United States and elsewhere, the firm works throughout the developing world to facilitate competition and innovation by building institutions and capacity—a long-term approach to success. Kovacic also gave valuable insight into how to implement antitrust regimes and monitor progress toward a competitive system.
China, for instance, has made an “impressive” start in building a competitive system, the “most ambitious start” by any country to date, he said. And one surprising advance has been the emergence of antitrust complaints by private parties rather than agencies. Yet even though China adopted its antimonopoly law seven years ago, the country is “is still in the first stage of developing its antitrust regime,” with much work ahead.
He said three steps are needed to put a competitive system in place:
Antitrust systems should be reviewed every 5 to 10 years and upgraded as necessary, Kovacic said. Some strengthening measures to consider, using China as an example:
A detailed analysis will appear in Kovacic’s article, “China’s Competition Law in Context,” to be published in the Journal of Antitrust Enforcement.