The International Dimension of EU Competition Policy
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The International Dimension of EU Competition Policy: Does Regional Supranational Regulation Hinder Protectionism? Hikaru YOSHIZAWA Thèse présentée en vue de l'obtention du grade académique de Docteur en Sciences Politiques et sociales sous la codirection de Madame la Professeure Janine GOETSCHY (ULB & CNRS) et Monsieur le Professeur René SCHWOK (UNIGE) Année académique 2015-2016 1 Abstract There is an increasing recognition of the international presence and regulatory influence of the EU in competition policy. Despite a scholarly focus on its international dimension, the issue of nationality-based (non-) discrimination has insufficiently been investigated in the existing literature on EU competition policy. Thus, this research aims to fill this gap in the literature by examining whether the EU internally and externally utilizes its competition rules for the objective of promoting (potential) national and European champions, while disadvantaging non-EU based companies operating inside and outside the European internal market. Empirical findings validate two hypotheses of this research: that the supranational institutional setting of the EU in competition policy constrains the ability of member states to use their competition policies for neomercantilist, and even for protectionist purposes; and that the institutional setup assures nationality-blind enforcement by EU competition regulators, even vis-à-vis non-EU based companies. The research also identifies key systemic factors which either constrain or empower the EU as a regulatory power in the competition policy domain. The empirical analysis draws on both quantitative data and in-depth studies of recent major cases. Most cases are from the period between September 1990 and August 2015, involving American and Japanese companies, which have a strong presence in European economies. EU competition policy is highly supranational and has a distinctive goal of market integration. In order to understand better how these features shape EU competition policy, this research proposes an original model of ‘stringent competition policy’, drawing on the theory of regulatory states. This model is more useful than the essentially neomercantilist model of strategic competition policy in explaining the EU’s enforcement without regard to the nationality of firms. Internally, the supranational institutional setting significantly constrains the ability of the member states to utilize their competition policies for 2 neomercantilist and protectionist purposes. Regarding external consequences of this policy, the EU stringently enforces its competition rules regardless the nationality of firms involved in law infringements, though some cases involving non-EU firms were highly politicized and contested. To ensure that its stringent competition policy does not deteriorate the international competitiveness of European firms, the EU has been promoting competition policy externally, especially since the 1990s. However, the EU’s ability to play a leadership role in global multilateral fora is limited, despite its dedication and ambitions. This is because the EU’s regulatory power is fundamentally constrained by systemic factors such as a sharp increase in the number and heterogeneity of competition policies around the world, the deadlock of WTO negotiations on world competition law, and the emergence of transgovernmental networks such as the ICN. At the same time, these systemic factors have created the demand of younger competition authorities for reference points, if not models, and this opened up a window of opportunity for the EU to promote its competition policy rules and norms more extensively in third states. Overall, this research contributes to the EU competition policy literature by firmly placing it in a wider debate on competition and/versus competitiveness in the study of global political economy. 3 Acknowledgment I would like to express my sincere gratitude to my supervisors, Prof. Janine Goetschy and Prof. René Schwok, who always encouraged me and gave me a lot of valuable comments when I was struggling with my thesis. I am also thankful to Prof. Amandine Crespy, who helped me a lot since the first year of my doctoral research, and Prof. Chad Damro and Prof. Sandra Lavenex, who kindly agreed to become members of my thesis committee. With no doubt, I could not produce this thesis without continuing support and advice from GEM PhD School Director Prof. Mario Telò, and Mr. Frederik Ponjaert and Mr. Johan Robberecht of the GEM Central Executive Office. My research hugely benefited from interactions with my GEM mates and those colleagues whom I met at various conferences and meetings in Belgium, Switzerland, the Netherlands, the UK, China, Japan and Canada. In particular, I am grateful to Prof. Raffaele Marchetti, Dr. Angela Wigger, Dr. Davor Jancic, Prof. Yane Svetiev, Mr. Hassan Qaqaya, Dr. Duncan Wigan, Mr. Matthew Maguire, Ms. Basje Bender, Ms. Pola Cebulak and Ms. Anna Chung, who kindly took the role of my discussants at various academic events. My special thanks also go to Ms. Ee Lyn Chin, Ms. Sarah Goler, Ms. Coraline Goron, Mr. Gustavo Müller and Mr. Shunsuke Sato. They read my papers and/or thesis drafts, and gave me very useful feedback. I got valuable insight from the interviewees, too. Last but not least, I would like to thank Prof. Hidetoshi Nakamura and Prof. Koji Fukuda at Waseda University for their continuing guidance for many years, and my EUIJ Waseda colleagues for their warm encouragement. 4 Table of Contents Abstract ……………………………………………………………………………………….. 2 Acknowledgment ……………………………………………………………………………... 4 Table of Contents …………………………………………………………………………...... 5 List of Abbreviations …………………………………………………………………………. 8 List of Tables, Figures and Boxes …………………………………………………………… 10 Chapter 1: Introduction .......................................................................................................... 12 1.1 A strange combination? EU competition and industrial policies ......................................... 13 1.2 Puzzle and research questions .............................................................................................. 18 1.3 Key variables and definitions ............................................................................................... 19 1.4 Scope and intended merits .................................................................................................... 22 1.5 Methodological choices ........................................................................................................ 24 1.6 Structure of the thesis ........................................................................................................... 27 Chapter 2: The Functioning of EU Competition Policy …………………………...... 30 2.1 Policy objectives: change and continuity ………………………………………………..... 30 2.1.1 Protecting people from giants: a broad political context ……………………………... 31 2.1.2 The persistent market integration ethos: a distinctive European approach ................... 34 2.1.3 A development of the international dimension since the 1990s .................................... 40 2.2 Substance of policy: introducing the four main components ……………………………... 46 2.2.1 Restrictive practices ………………………………………………………………...... 47 2.2.2 Abuse of dominance ………………………………………………………………...... 52 2.2.3 Mergers .......................................................................................................................... 55 2.2.4 State aid ......................................................................................................................... 58 2.3 Evolving supranational characteristics ................................................................................. 63 2.3.1 The centrality of supranational actors in individual cases ............................................ 63 2.3.2 Marginal roles of intergovernmental actors in individual cases .................................... 65 2.3.3 Limited impacts of recent institutional and treaty reforms ………………………....... 66 Conclusion ................................................................................................................................. 68 Chapter 3: Theoretical Framework .............................................................................. 70 3.1 Gaps in the literature ............................................................................................................ 71 3.2 Strategic competition policy: a neomercantilist perspective ................................................ 74 3.3 Stringent competition policy: a regulatory state perspective ……………………………... 80 3.3.1 Limitations of the first model ………………………………………………………… 80 3.3.2 External implications of the regulatory state …………………………………………. 82 3.3.3 Differences and commonality between the two models ……………………………… 91 3.4 Further debate: EU competition policy in a global context ……………………………….. 94 3.4.1 Not only a trade and market power, but also a regulatory power? ………………….... 94 3.4.2 Two aspects of regulatory power …………………………………………………….. 97 Conclusion .................................................................................................................................. 101 5 Chapter 4: Dynamics between National and European Regulation – Does 103 Supranational Action Hinder National Neomercantilist Policies? ……………….. 4.1 Merger control as a typical area wherein national and supranational policies clash ........... 103 4.2 The motor vehicle sector .....................................................................................................