Edited by Manfred Neumann and Jürgen Weigand
Chapter 9: Competition Policy versus Regulation: Administration versus Judiciary
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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