Competition Law and Policy in the Transitional Market Economies

It was towards the end of the nineteenth century that the first competition (antitrust) laws were enacted in the Western, industrialised countries namely Canada (1889) and the United States (1890). It is interesting to observe that a hundred years later, several developing and transitional market economies are embracing competition law. Since 1990 approximately 35 countries have amended, enacted or are in the process of adopting competition laws. However the underlying basis for the renewed interest in this field of economic policy differs between the two periods. The concern at the end of the nineteenth century was to prevent increased levels of industry and aggregate concentration, which could give rise to the exercise of market power and undue economic-political influence. The competition laws were passed during a period of unprecedented corporate merger and acquisition activity, consolidations and the formation of trusts. In contrast, competition laws in developing and transitional market economies are being adopted in an environment where economic activity is already highly concentrated, mainly due to past government policies and interventions. These laws are now seen as instruments to accelerate the transformation process, where economic activity is primarily determined by private ownership and market forces instead of state ownership and control.