Antitrust rules are usually ignored during crises

Enforcement of competition policy was a "luxury for times of relative peace and prosperity", a speaker said at last week's International Competition Network conference.

"Antitrust enforcement is one of the first regulatory programmes to be put on hold during times of financial crisis or war," Daniel Crane of the University of Michigan Law School told competition regulators from around the globe.

Nadia Calvino, a deputy to the European Commission's competition director-general, said merger controls should not block efficient restructuring of sectors, "but we should be vigilant about anti-competitive changes that would be a problem when the crisis is over; we must continue to apply our rules in a consistent manner."

She warned regulators about the increasing tendency of merging parties to use the "crisis" defence in support of anti-competitive mergers just as the "China" defence had been used in the past.

Stanley Wong of the Irish Competition Authority said regulators had to realise that competition policy was one of many policy options. He recommended that when government measures were pushing aside competition policies, regulators should emphasise the long-term implications of these measures and urge governments to maintain powers to adjust these policies once the crisis was over.


Allan Fels of the Australia and New Zealand School of Government said that competition authorities were often not even approached to consider the spate of anti-competitive deals implemented with government support around the globe.

He advised that, where governments approved mergers, details of the competition issues should be made public.

Alistair Mordaunt, a director at the UK Office of Fair Trading, said there was scope for regulators to adopt a lighter, more accommodating touch, without undermining principles. But he said: "Recessions are temporary, mergers are forever."

South Africa's competition tribunal chairman, David Lewis, said that industrial titans tended to emerge from crises better able to dominate their markets than previously.

Crane described how antitrust rules had been set aside in every crisis to hit the US economy since the 1880s.

And although US President Barack Obama had sworn not to repeat the Great Depression errors by abandoning antitrust enforcement, Crane noted that the US Treasury was pushing bank mergers as a solution to credit and solvency problems. - Ann Crotty