State-Initiated Restraints of Competition
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State-Initiated Restraints of Competition

Edited by Josef Drexl and Vicente Bagnoli

States influence competition in the market in various ways. They often act themselves as market participants through state-owned enterprises. They regulate markets and specific sectors of the economy such as public utilities in particular. In some instances, market regulation explicitly aims to promote competition in the market. In other instances, regulatory schemes and decisions may inadvertently distort competition or openly promote conflicting objectives and even anti-competitive goals. Furthermore, states can distort competition among firms when they act as purchasers of goods and services as well as when they grant subsidies to individual firms. This book assembles contributions by competition law scholars who present new insights on the diversity of problems and challenges arising from state-initiated restraints of competition in jurisdictions from all around the world, not only including the EU and the US, but also Latin American countries, China, India and Australia.
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Chapter 9: The suppression of the competition policy agenda in the context of an over-regulated economy: the case of Venezuela

Claudia Curiel Leidenz


Competition policy in Venezuela has been actively and progressively developing since 1991, when the special law regulating competition was enacted. However, the institutional framework developed in Venezuela during the political leadership of Hugo Chávez suppressed the possibility of the free market model to subsist. During the last ten years the state has introduced more than 300 norms and regulations that affect the market conditions, the scope of economic freedom and the principle of private property. The purpose of increasing the state’s participation in and control over the economy has been to besiege private economic activity. The core goal of this article is to explain that as a consequence of this siege, which will be thoroughly analysed, competition policy has no applicability in Venezuela. The enactment of the Law for the Promotion and Protection of Free Competition took place within the framework of a process of adjusting and opening the Venezuelan economy, as part of second-generation reforms. In this context, it was decided to suppress direct and centralized state control, which previously had affected a large portion of the economy. At the same time, Venezuelan society was in the middle of a transition towards commercial opening and institutional and regulatory modernization. When the competition law was enacted, the country was not prepared culturally or formally to adopt competitive dynamics, since the combination of state control schemes and protectionism did not foresee that type of free decision and performance by economic actors.

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