Monday, July 30, 2007

What if there were no antitrust?

I returned from a conference in Shanghai on Asian Competition Policy where I was struck by the realization that the four fastest growing economies in the world (India[1], China[2], Singapore[3], and Hong Kong) have had, until recently, no antitrust laws. I heard tales of explicit collusion--land developer and rice-importing cartels--yet these economies are growing at double digit rates. Makes you wonder.

I would like to hear from our readers how business practices (relationships with suppliers and customers) differ in the absence of antitrust laws, and how they changed with the advent of laws.

Figure: Countries with Antitrust Laws (in red) in 2004

[ 1]. India does have an antitrust law on the books but it is not enforced at traditional antitrust targets, i.e., price-fixing, anticompetitive mergers, and abuse of dominance.

[2] China is on the verge of passing an anti-monopoly law.

[3] Singapore has only recently put an antitrust law on the books.


  1. Caretel are nutoriously hard to keep together for longer periods of time than a year.

    My personal experience says that cartels are easier to form in tightly regulated industries or ones that mostly work with the public sector.

  2. What you say corresponds to my experience at the US Department of Justice Antitrust Division in the late 1980's--more than half of our criminal investigations involved bid rigging against the government.

  3. You might want to read this: an article called "Antitrust Apostate." It's a review of Edwin Rockefeller's book The Antitrust Religion.

    "it is quite significant to hear a rejection of the entire notion of antitrust from someone who is a former chairman of the American Bar Association’s Section of Antitrust Law with more than fifty years of practice in the field. "