Emerging market anti-trust regimes are set to struggle, a US economist has warned.
With competition laws in place in over 115 jurisdictions, the global management of antitrust risk has become increasingly important. Antitrust enforcers must now coordinate across jurisdictions in both civil and criminal enforcement.
But New York University economics professor, Janusz Ordover, said today the rapid expansion of antitrust regimes worldwide has exposed a vacuum of useable economic data in many markets.
“The tools are moving ahead of the foundations,” he said. “In many emerging markets there is no history of collecting data. Economists are facing unbelievable demands in undertaking analysis based on very little useable information.”
The more established US and European antitrust regimes are very data-driven. But other markets are heading for a clash between the new regulatory regimes in place and pre-existing inadequacies within their foundations, he said.
“How one can work with limited data is going to be a key challenge for economists as they begin to sell their services globally,” he said.
Cadwalader Wickersham & Taft partner Rocky Lee said the availability of good data, or lack thereof, was a problem in Mainland China.
“Without the data, it becomes more about lobbying and investor pressure,” he said. “Public opinion has more input in regulatory decisions.”
King & Wood Mallesons’ partner Martyn Huckerby said a number of areas of law were emerging in China through practice not legislation, such as the treatment of joint ventures (JV) where no detailed rules exist pertaining to the circumstance in which JVs should be notified
“Great patience and time is needed in order to navigate clearance and the different processes involved in attaining regulatory approval,” he said.
Cadwalader Wickersham & Taft’s Washington DC-based managing partner Rick Rule called for a holistic approach to merger advice.
He advised legal and economic teams to be involved early in the planning of any transaction in order to ensure they understand the deal, avoid pitfalls and are better able to answer regulators’ questions.