In the short and medium term, certain policies to put American industry first may clash with policies to put American consumers or workers first. For example, Trump’s “America First” policy does not have a clear answer when it comes to antitrust, an area where consumers’ interests are usually pursued more directly than producers’ interests, whether they are businesses or workers. Trump has not articulated how he will resolve this contradiction. In contrast, Europe has mostly found the right balance between these diverging interests.
When it comes to antitrust legislation, America once set the standard. Competition policy was first introduced in the United States in the late 19th century, while in Europe, it was only developed in the context of European integration starting in the 1950s. But today, the European system is stronger in many ways than the American scheme, which has been somewhat slower to adapt to new challenges. In competition policy, for example, the E.U. embraces not just antitrust but also controls how much aid a state can provide a business and provides other forms of oversight for how national governments intervene in economic and financial markets.
When I was European commissioner, I worked to make a single European market out of the various domestic markets and to promote competition in the resulting EU-wide market. The single market and liberalization and competition policies have reinforced each other within the E.U.’s coherent vision for breaking up monopolies. Against this backdrop, particularly in light of the efforts of Europe’s current commissioner for competition, Margrethe Vestager, to pursue Silicon Valley if necessary, the E.U. appears well ahead of the United States in implementing a vigorous competition policy.
One reason for this is the greater proximity of American antitrust authorities to electoral cycles, relative to the more shielded position of the E.U. The European Commission’s vigorous enforcement operates under an administrative system, where its decisions have direct and immediate legal effects. This is a strength that Europe should certainly maintain. But it would be wrong to believe that this in itself prompts the E.U. to be bolder, as if it did not have to undergo judicial review. Important decisions usually do end up being reviewed in the court.
Another important reason for the strength of antitrust in Europe is that it is conducted within a rational architecture. Especially following the E.U.’s “modernization” of competition laws starting in 2004, cases have been decentralized to national competition authorities. This has happened under an orderly system, overseen by the European Commission. In America, despite repeated attempts to reconsider the framework inherited from a distant past, there are only two federal antitrust authorities, the Department of Justice Antitrust Division and the Federal Trade Commission (FTC), where the division of competences is not crystal clear, plus 50 state attorneys general.
In other words, the U.S. system is less coherent than the European one. We had a vivid illustration of this in the 2004 Microsoft case. The Justice Department, under former president Bill Clinton, had decided that a breakup of the company was necessary. Several states sided with the department, while several others opposed it. The court eventually annulled the breakup. Only a few years later, the Justice Department, under former president George W. Bush, was satisfied with a very weak settlement endorsed by the court.
In the E.U., the Microsoft decision was the responsibility of the European Commission, with national competition authorities playing only an advisory role. That said, the fine and reforms we imposed on Microsoft were certainly much tamer than what might have been if the breakup had gone through in the United States.
Especially under Vestager’s leadership in recent years, Europe has become stricter than American enforcers when it comes to guarding against threats posed by digital platforms. Former FTC chair William Kovacic said recently that Brussels is now “the capital of the world” when it comes to antitrust enforcement against dominant firms, leaving the Justice Department and the FTC “in the shade.”
But Makan Delrahim, the current U.S. assistant attorney general for antitrust, is potentially the most vigorous person to hold that position under a Republican administration that I have seen so far. The E.U. and the United States therefore have an opportunity to proceed to strong antitrust enforcement on both sides of the Atlantic.
That would have two welcome byproducts. The Trump administration would feel called to articulate in less dogmatic and more concrete terms its “America First” ambition and to identify the proper role for antitrust. And containing divergences between U.S. and E.U. antitrust decisions, especially when they concern U.S.-based companies, would reduce the risk of trade wars triggered by antitrust tensions.