Their Implications for Competition Law
Edited by Michal S. Gal, Mor Bakhoum, Josef Drexl, Eleanor M. Fox and David J. Gerber
Chapter 13: Abuses of dominance in developing countries: a view from the South, with an eye on telecommunications
We assess the evolution of competition enforcement in abuse of dominance cases in Chile and South Africa, in the broad context of debates about the role of institutions and economic development. Developing countries typically have entrenched interests that have cornered particular markets and the rents that can be earned. This is due to various factors, including scale and network economies relative to the size of the local markets, compounded by transport and logistics obstacles, the ongoing influence of well-connected business groups and families, as well as the legacy of state support. In both Chile and South Africa there are powerful business groups whose positions can be traced back to advantages gained under previous political regimes, which included major state intervention in the economy to favour particular groups. Enforcement of abuse of dominance provisions of competition law is chiefly about addressing the ways in which dominant firms protect their positions through exclusionary conducts. In other words, it is about ensuring wider access to economic opportunities than if such conduct went unchecked. As such, addressing abuse of dominance under competition law relates to the dynamic and creative role of competitive markets, as part of rules-based frameworks for increased economic participation. Countries, however, differ considerably on the weight to put on the ability of smaller firms and entrants to participate in ‘fair’ market circumstances. Competition law has become part of the standard package of reforms recommended by international institutions such as the World Bank.
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