Subsidies, Competition Laws And Politics: A Comparison of the E.U. and the U.S.A. European Policy Papers #2

Cacciato, Giuseppe (1996) Subsidies, Competition Laws And Politics: A Comparison of the E.U. and the U.S.A. European Policy Papers #2. [Policy Paper]

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Abstract

[Introduction.] Both the EU and the US have laws and rules intended to promote competition by discouraging monopolies and both sets of rules have similar "anti-trust" character. In the case of the EU, Community law contains general antitrust provisions, provisions for the control of mergers and concentrations, provisions restricting State aids, and particular rules applying to public undertakings. American antitrust law covers similar ground with respect to competition, monopolies, mergers, collusive practices, price discrimination and exclusionary practices. However, American law says nothing about state aids or about preemptive control of subsidies by any level of government. The law's silence on this topic might seem paradoxical. Since the ideology behind antitrust is so clearly an exaltation of free competition in a market economy, one would expect an explicit and stringent restriction of subsidies in American law, alongside the suspicion of economic concentration that is so apparent. But the very strength of the ideology may itself explain the law's silence: the notion of government subsidy - at least so described - is sufficiently alien that lawmakers have not even paused to consider its prohibition or restriction.

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