Merger Control and Competition Policy in Central East Europe in view of EU Accession

1 Introduction This study reviews competition policy in Hungary, Poland, Romania and Slovenia. The general finding is that progress has been made in the course of accession negotiations with the European Union (EU). The countries under review follow the EU model of legislation, which itself is based on the German tradition of competition policy. Specific circumstances of transition from communism to capitalism do however generate problems of implementation, which require more measures than a simple takeover of the EU rules. In particular we will show that the definition of the relevant market is in many cases not a question of national authorities. We approach our subject by looking at the EU-CEEC (Central and East European Countries) negotiation process in the next section. After the CEECs have passed the first stage of accession negotiations, the Europe Agreements (EAs), we are now in the second stage of negotiations, which is concerned with 'acquis communautaire'. The relevant chapters on competition policy are open and will be reviewed in detail. The third section investigates the EU (German) model of merger control and competition policy. Although this model is more or less taken as blueprint in CEECs, we will show, that it is not without theoretical flaws, which will be presented in a prisoner's dilemma framework. The forth section reviews the implementation practice. Here we look at legal transitions and provisions for competition policy and preliminary implementation experiences. This is illustrated by examples of merger control executed by National Competition Offices. Antitrust measures between 1996 and 1999 are summarised in table 3. We conclude that competition policy in CEEC is well under way, although national differences persist. 2 The EU-CEEC negotiation process Laws, regulations, case law as well as the institutions governing merger control as part of competition policy had to be built from scratch in CEECs. In the framework of the former economic regime with its close link between the state and the producing sector competition 3 policy was not only superfluous: the paradigm of economic planning stands in sharp contrast to competition on markets. Additionally, in the case of some transition countries, institution-building had to take place in a situation in which the state itself had been newly established, like the Baltic states, the Czech and Slovak Republics and the formerly Soviet and Yugoslav member states. These could not borrow from past experience within the borders of their new states and concerns related …