Antitrust in Emerging and Developing Countries. Africa, Brazil, China, India, Mexico…, Eleanor FOX, Harry FIRST, Nicolas CHARBIT, Elisa RAMUNDO

Eleanor Fox, Harry First, Nicolas Charbit

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This book is the publication of the proceedings of the symposium organized in New York, in October 2015, by the journal Concurrences and New York University. This was the second symposium on the topic of competition law in developing countries. Some 20 contributors worked to highlight the maturity of the legal systems of developing countries based on the examples of China, India, Mexico, Brazil and South Africa. In this way, it is a call for vigilance addressed to companies. This is all the more necessary in view of the active involvement of institutions and their agents who are firmly convinced of the need to protect the proper functioning of markets in the face of the power of private and public operators. These contributions are grouped under four main themes: State intervention in the market economy; new technologies, the pharmaceutical industry and intellectual property; the general interest, industrial policy and concentrations; the implementation of antitrust law at the international level and economic development.

The first part begins with a subject of acute importance in China: the enforcement of competition against state monopolies. Lawyer Susan Ning describes how the Anti-Monopoly Law (AML), adopted in 2008, addresses all state-originated competition restrictions: both administrative monopolies and state-owned enterprises. Significant cases from 2013 to 2015 are presented, revealing how abuses of monopolies are a priority objective. But a structural weakness is the lack of independence and decision-making power of the institutions implementing the MLA. Proposals for reform have been presented to the 18th Central Committee of the Communist Party. In a generalist approach, Jonathan Orszag focuses on the principles that should guide the involvement of states in the market economy. He seeks to limit the scope of the reform to the strictest necessity so as to preserve undistorted competition based on merit.

In the second part, Kirti Gupta’s article on the rise of the FRAND negotiations for essential patents in India within the framework of the standards organizations is of interest. Debate and practice is intensifying before judges and the Indian competition authority, particularly in the wireless communication technology sector. India is the second largest market for mobile phones; the impact of these developments will be felt worldwide. India’s pharmaceutical sector is also in the spotlight with Aditya Bhattacharjea and Fiyanshu Sindhwani, professors at the University of New Delhi. But the toll is severe even though most Indians suffer from poor access to essential medicines. The result is a review of the low coverage, due to high thresholds, concentration control and ineffective condemnation of distribution networks. Finally, the low penetration of generics in a country where the needs are immense is deplored and explained. In a radically different economic and legal context, unmet needs are also glaring in China in terms of access to medicines. In the analysis of Thomas K. Cheng, professor at the University of Hong Kong, the difficulties are due to the content of regulation, which is largely ineffective, and price controls. The penetration of generics has not been made any easier, far from it. This time, the lever for reform lies in the liberalisation of certain areas and in a revision of the regulatory framework. Mexico also faces serious challenges in the pharmaceutical industry, as Carlos Mena-Labarthe, President of the Competition Authority, points out. The findings are once again high prices and low generic penetration. However, the idea is not to seek a solution that is adapted to the country’s particular characteristics. The president of the competition authority is looking for a body of experience in other legal systems, in particular to detect new deviant behaviour by the pharmaceutical industry.

In the third part, George S. Cary, Elaine Ewing and Tara Tavernia, lawyers at Cleary Gottlieb Steen & Hamilton, again take up the traditional observation of the cost of merger control due to the worldwide multiplication of control systems. Simplification and harmonisation may indeed be necessary. However, it seems very excessive to invoke an economic paradigm according to which mergers and acquisitions would be procompetitive. As for the meeting of the general interest, industrial policy and remedies in the context of merger control, two experiences are being compared: that of Dennis M. Davis, President of the South African Competition Appeal Court, and that of Samir Gandhi, a lawyer, in India. In South Africa, the legislator has required that considerations of general interest be taken into account in the implementation of merger control. This is a difficult exercise, as the President testifies, but he concedes that this seems inevitable in view of the strong structural inequalities and the extent of poverty that undermine the country. In India, the study still focuses on the pharmaceutical sector. The Competition Commission is not impervious to such considerations. But the reader cannot fail to question the effectiveness of such consideration after reading the previous report on India.

In the last part, the testimony of Wang’ombe Kariuki, Chief Executive Officer of the Kenyan Competition Authority, and Simon Roberts, Professor of Economics at the University of Johannesburg, on the Kenyan experience in the formation of competition institutions and the link with development, will be carefully read. A young authority with limited resources cannot engage in complex analyses that would require reliance on outside experts. This paper shows how, through field analyses, merger control can be carried out to give meaning to development. The inadequacy of penalizing anti-competitive practices in a cultural context where such behaviour seems normal is also highlighted. The difficulty in channelling interest groups and lobbying from all sides make it very difficult to carry out its missions. It is concluded that a competition culture must progress step by step, emerging strengthened by results. The Brazilian system, which has been in existence for some twenty years, is presented precisely in its spectacular progress in integrating good practices recognized as such on the international scene. Mariana Tavares de Araujo, a lawyer, makes the direct link with the strengthening of international cooperation and thus greater effectiveness of the Brazilian CADE authority. Nevertheless, she considers that a process of reflection should begin on the financial burden of participating in the International Competition Network and the work of the OECD institutions. Finally, representatives of the Federal Trade Commission set out US efforts to support developing countries in terms of technical assistance. Their self-assessment consists of the distribution of satisfaction. Brazil, which has long been severely criticised, receives high praise. In contrast, Hungary is being pilloried. It is, moreover, important for us Europeans to note the harshness of the diagnosis: the Hungarian competition authority "has become an island in an increasingly incompatible environment in terms of (...) the concept of the liberal market economy as opposed to protectionism, paternalism, over-regulation and rent-seeking".

In conclusion, the organisers are to be congratulated on their choice of countries that are representative of the very great disparity that exists between the so-called "developing" countries. The challenges and, therefore, the responses cannot be the same. It is, however, edifying to note, in very different contexts, their inability to bring generics to their markets. The choice of the pharmaceutical sector provides an astonishing cross-cutting view. Although the colloquium was held in New York, it is regrettable that the European Commission and certain national competition authorities did not have the opportunity to explain their support for developing countries, their methods and their political choices, particularly in the framework of the International Competition Network.

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  • University of Paris I Panthéon-Sorbonne


Catherine Prieto, Antitrust in Emerging and Developing Countries. Africa, Brazil, China, India, Mexico…, Eleanor FOX, Harry FIRST, Nicolas CHARBIT, Elisa RAMUNDO, November 2016, Concurrences Nº 4-2016, Art. N° 82029, pp. 253-254

Publisher Concurrences

Date 1 June 2016

Number of pages 220

ISBN 978-1-939007-52-0

Visites 641

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