EU Antitrust for Africa?
European Commission president Jose Manuel Barroso told reporters today that the EU may use some of the millions of Euros it collects every year in antitrust fines to boost “development aid to poor countries.� Such a move would help finance the EU leadership’s expected call to commit 0.7% of GDP to such aid by 2015.
I have yet to hear a similar idea from U.S. antitrust leaders. In fact, there’s no set policy that I am aware of for dispersing the hundreds of millions the Justice Department confiscates annually in “anti-cartel� prosecutions. The money is simply diverted to the U.S. Treasury, although some of it may remain in the DOJ’s hands for use in other antitrust cases.
The use of retributive fines in antitrust cases contradicts the stated rationale for maintaining antitrust laws: “protecting competition.� Transferring capital from the market to the state does not make the market more competitive. To the contrary, the Justice Department’s principal means of prosecuting cartels, offering amnesty to the first company to turn state’s evidence, allows one firm to escape without penalty while its competitors lose millions in capital.
Dedicating pirated antitrust booty to a particular use, as the EU’s Barroso seeks, will only increase the incentive for prosecutors to manufacture antitrust cases. Furthermore, given the EU’s policy of encouraging competitors and third parties to lodge antitrust complaints witht the Commission, groups that support foreign welfare (aid) will have an incentive to devote part of their organizational energies to researching and lobbying for antitrust prosecution of profitable businesses.
