trusts and nationalism

Image: Thelma Lessa da Fonseca
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By ALESSANDRO OCTAVIANI*

The liberal face of the discipline of competition is being liquefied in public, around the world, making its instrumental position in the economic dispute between the countries that are part of the modern world system evident.

“Confessing well / Everyone sins / As soon as Mass ends / Everyone has a first boyfriend / Only the ballerina doesn't have it / Dirty behind the ear / Currant mustache / Panties a little old / She doesn't have it” (Ciranda da dancer, Chico Buarque and Edu Lobo).

The policies and rhetoric of austerity, privatization and market liberalization have shown, since the 1990s, an intense elective affinity with antitrust, which even served as an appeasing ideological justification: one could throw everything to the market, as long as there was control efficiently on possible abuses, with the guarantee of competition.

The liberal face of the discipline of competition, however, is being liquefied in public, around the world, making its instrumental position in the economic dispute between the countries that are part of the modern world system evident. The antitrust of neoclassical rhetoric goes to the back of the stage, with ideological pretensions of “neutrality”, preferably operating under the criterion of “economic power within specific relevant markets”; the discipline of competition that operates under the criterion of “nationality, protecting their own 'relevant markets' for nationals” comes into play. There is a significant displacement, which, therefore, completely recasts the competitive discipline. The organic core of the West does not play around: while it was in the uncontested condition of producer and seller, it produced free-trade ideological and institutional forms, with which it colonized the world's minds and legal systems; when it sees itself threatened, pushed into the role of non-producer or sees its high-tech assets acquired by other capitals, such as China, it quickly remodels its antitrust for the new phases of the war, giving it the colors of economic nationalism contemporary.

Germany, for example, is squeezed by the gigantism of big tech North American (Google, Facebook, Amazon…) and at least Made in China 2025. With the sequence of North American and Chinese acquisitions draining, very quickly, European technological capabilities (in 2016, China bought about 40 German companies, increasing by eight times the investment of the previous year), in 2017 it vetoed the acquisition from the aixtron from  Fujian Grand Chip Investment and parliament approved the 9th amendment to the antitrust law, to introduce notification criteria based on transaction value (400 million euros), with the function of monitoring previously unreportable deals. In 2018, it prevented the Chinese from entering the energy sector, preventing the purchase of Leifeld Metal Spinning by the Yantai Taihai Group. In 2019, the government sent the 10th amendment to the antitrust law, proposing regulation on agents with “fundamental importance across different markets” (paramount significance across markets – those operating on platforms or networks, with access to relevant data or infrastructure for third parties to access markets for the supply and sale of products), that is, strategically and primarily, the big tech North American. In 2020, it was proposed to adopt competition law instruments “to reduce distortions of competition in the internal market” created by subsidies from countries such as China. Germany arms itself to the teeth with a competitive discipline of a nationalist nature; in the land of List, the liberal court antitrust becomes a little brother: he is part of the family, but he has to obey those who are really in charge.

The US sells itself to the world as a competition haven, an Eden protected by the judiciary and two powerful federal government agencies, the FTC and the DoJ. Lovers of American antitrust ideology around the world almost never remember the CFIUS, an institution that regulates competition in the US domestic market under the criteria of defending US economic sovereignty and has thus practiced nationalist competition regulation for decades. In the oil shocks of the 1970s, Arab oil-exporting countries accumulated liquidity and the United States became concerned about the “national security” implications of its acquisitions. in the wake of Foreign Investment Study Act 1974, the creation of the Committee on Foreign Investments in the United States CFIUS, with the function of evaluating such investments and, in 1988, after the threat of technology companies being taken over by Asians, the Amendment Exon-Florio guaranteed to the federal Executive Power the full competence to veto operations that aimed at the control of US companies by foreigners, always based on “national security”. In August 2018, the body's power was expanded, with the sanction of Foreign Investment Risk Review Modernization Act - FIRM, which broadens the scope of acquisitions under its scrutiny, with legal categories for competition discipline such as “national security”, “critical technology or infrastructure that would affect US leadership in areas of national security”, “US cybersecurity vulnerabilities” or “potential threat to national security”. The US antitrust, always full of exemptions and protectionisms, is only more explicit, gnashing its teeth at China. Alexander Hamilton is more alive than ever, and not just in Broadway.

In England, in June 2020, new integrative guidelines for the Enterprise Act 2002, foreseeing, among other points, the expansion of jurisdiction over concentrations in the sectors of artificial intelligence, cryptographic authentication or advanced materials, based on four highly plastic legal criteria: “national security”, “financial stability”, “combating the emergence of public health” and “media plurality”. The law project The UK's National Security and Investment Bill deepens this agenda, deepening the “public interest” criterion for foreign direct investment operations, which must also be scrutinized under the “national security” criterion, with an obvious focus on the dispute over the 5G. Contemporary British antitrust revisits its ancestor, the competition discipline of the Tudor Navigation Laws, dreaming of a State that pushes towards lost economic complexity.

China is a mercantilist and protectionist economic machine; its “antitrust” policies, institutions and rhetoric are nothing more than, structurally, a “conversation for the WTO to see” or, explicitly, an instrument for achieving the ends of aggrandizing the national economy. A Anti-Monopoly Law 2008, with only one year of existence, justified the veto to the acquisition of Huiyuan, a Chinese juice maker, for Coca-Cola, which had offered US$ 2,4 billion for the Chinese company; in 2011, the linking of legal disciplines from different sectors of the economy to the semantic core of “national economic security” was deepened, with the enactment of the national security review for mergers and acquisitions advocated by non-nationals. In 2018, the State Administration for Market Regulation, which brought together, in a single governmental arm, the three pre-existing competition authorities; In 2019, the new foreign investment law was approved, providing, in art. 35, that investments in sensitive sectors and industries will be subject to the procedures of national security review, closing the loop: Chinese antitrust serves China’s technological, commercial and military expansion, bearing no real resemblance to the “textbook antitrust” that the OECD loves to sell as a one-stop solution and which would function as “the guardian of competitive market system”. Chinese antitrust serves to create markets for China. The Nation's spiritual leaders, from Chou En-Lai to Xiaoping, would approve of this path with a sympathetic smile.

As can be seen, in the world, the discipline of competition is subordinated to national aspirations of economic policy (industrial and military); antitrust ceases, explicitly and shamelessly, to be able to claim itself as “neutral”, “liberal” or “bastion of last resort”, and moves to the forefront of the national economic security, proving to be functional for projects of a national-mercantilist nature, “dirty behind the ear, with a currant mustache, sinning as soon as mass ends”.

And us, here in Brazil? Why only the ballerina who doesn't have one?

* Alessandro Octaviani, former member of the Administrative Council for Economic Defense (CADE), he is a professor at the USP Law School. Author, among other books, of Genetic resources and development (Hail).

Originally published on the website The Third Bank.

 

 

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