by Kevin Coates | Oct 27, 2009 | Competition, Regulation
As part of Professor Eleanor Fox’s comparative EU/US competition law LLM class at NYU, she asked if I would give a lecture on state aid and regulation issues and how they relate to the competition rules. Here is the text of the lecture, separated into three posts: this is Part 1; Part 2; Part 3) Competition law, State aid, and Regulation One of the difficulties about studying the law is that there is never a good place to start. No individual law or rule exists in isolation; if you learn about one rule, you will understand a little; if you learn about more rules you will understand a little more about that first rule. Professor Dworkin’s idealised judge, Hercules, has a perfect knowledge of all rules, and only with that knowledge can the judge form a complete understanding of any individual rule. Fortunately, real life standards are a little lower, but it is useful to think about how any one rule fits into the overall system of laws; this is particularly useful when comparing US and EU competition law, as the EU system of “competition law” is rather different to that in the US. Rather than focused exclusively on company behaviour, the EU system looks at state action as well. The objective is, however, the same. Creating a Single Market When the drafters of the Treaties sat down in the 1950s, they had a specific object in mind – to create a single economic area out of the then six separate national economies (now 27 national economies). One of the major reasons to integrate the economies of the Member...
by Kevin Coates | Sep 29, 2009 | General
At the 2009 Fordham Antitrust conference, there was a long session on EU and US approaches to the control of state aid (state subsidies), in the context of the financial and economic crisis. The EU has an extensive State aid control regime, which requires notification to the European Commission of any aid that may distort competition and that affects inter-state trade. One of the US panelists indicated that there was no mechanism under US law to enforce a similar control over state aid by US states, and nor could there be. I had understood that the US commerce clause (whereby Congress shall have power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes;”) to be an equivalent of the EU principle that – in this case – the competition rules, including the State aid rules, apply where trade between Member States is affected. To determine whether a law violates this so-called “dormant” aspect of the Commerce Clause, we first ask whether it discriminates on its face against interstate commerce. American Trucking Assns., Inc. v. Michigan Pub. Serv. Comm’n, 545 U.S. 429, 433 (2005); Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dept. of Natural Resources, 504 U.S. 353(1992). In this context, ” ‘discrimination’ simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Oregon Waste Systems, Inc. v. Department of Environmental Quality of Ore., 511 U.S. 93 (1994); New Energy Co. of Ind. v. Limbach, 486 U.S. 269(1988). United Haulers Association, Inc. v. Oneida-Herkimer Solid Waste Management Authority 127 S.Ct. 1786 (2007) This reference to...