The International Handbook of Competition

The International Handbook of Competition

Elgar original reference

Edited by Manfred Neumann and Jürgen Weigand

This indispensable Handbook examines both economic and legal aspects of competition policy and industrial organization. It provides a scholarly review of the state of the art regarding economic theory, empirical evidence and standards of legal evaluation. The book aims primarily at furthering our understanding of the interplay between economic reasoning and legal expertise by concentrating on the fundamental issues and principles underlying competition policy.

Chapter 9: Competition Policy versus Regulation: Administration versus Judiciary

Christian Kirchner

Subjects: economics and finance, competition policy, industrial organisation


9 Competition policy vs. regulation: administration vs. judiciary Christian Kirchner 1 Introduction The relationship between competition policy and regulation has not always been clear. Conventional wisdom regards both activities as non-competing, or complementary. However, rivalry between competition policy and regulation shows up in certain phases during the deregulation of an industry or the transformation of former state monopolies into competitive markets. In practice, the conflict between competition policy and regulation often arises as one between competition authorities and sector-specific regulators. In order to better understand the complex interdependence and substitution processes between competition policy and regulation, this chapter analyzes their relationship. We first look at the relationship between competition policy and regulation from an industrial organization perspective and then develop a new perspective resting on an institutional economics approach. We define competition policy in the given context as the application and enforcement of competition law by competition authorities and law courts. Regulation will be understood as sector-specific regulation enforced by regulatory authorities and law courts. Whereas competition policy constitutes a branch of economic policy applicable to all sectors, regulation concerns specific industries. We consider that administration plays a more prominent role in the case of regulation, while the judiciary is more decisive when it comes to the application and enforcement of competition law. Conclusions on the proper relationship between competition policy and regulation cannot be derived solely on grounds of different enforcement mechanisms. 2 Competition policy and regulation: non-competing or competing institutional devices? 2.1 Introduction...

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