Table of Contents

Competition Law and Economics

Competition Law and Economics

Advances in Competition Policy Enforcement in the EU and North America

Edited by Abel M. Mateus and Teresa Moreira

Competition policy is at a crossroads on both sides of the Atlantic. In this insightful book, judges, enforcers and academics in law and economics look at the consensus built so far and clarify controversies surrounding the issue.

Chapter 18: Do National Champions Have Anything to do with Economics?

Anne Perrot

Subjects: economics and finance, competition policy, law and economics, law - academic, competition and antitrust law, law and economics

Extract

Anne Perrot In October 2006, the SNCF, the French national railway operator, announced that it had chosen the Canadian firm Bombardier to produce some of the motors for its trains, rather than Alstom, the French competitor involved in the same tender offer. This choice has been denounced by a number of political or business leaders as evidence of culpable economic ‘antipatriotism’. The message was relayed by most media without much dispute. The fact that Bombardier proposed the best offer, allowing SNCF thus to build better quality trains at a lower cost and finally to offer a better service to consumers, was found a second order argument compared to the absence of ‘national preference’ that should have prevailed, at least according to this view. Moreover, most commentators also claimed that the public authorities should have intervened in order to correct what they seemed to find a ‘public bad’, that is, the result of a competitive process involving world operating firms. This is only the most recent chapter of the long and conflicting relationship that public opinion has sometimes had with the functioning of market economies, especially in France, and with the related idea that competition is a bad, the protection of national champions good, and that, in any case, the government is a wiser decision-maker than the market in the economic field. The purpose of this chapter is to confront some of the most often expressed views in the debate on industrial policy with their economic foundations. Beyond the well-known conditions...

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