THE LIMITS FOR THE GLOBAL PROLIFERATION OF COMPETITION LAW: THE CASE OF MACAO SAR

European Scientific Journal, Sep 2014

The adoption and enforcement of competition rules which replace or supplement state regulation of markets has become a global trend that led to almost universal proliferation of competition law regimes. Following the lead of the developed market economies an increasing number of developing countries and transition economies have introduced competition rules in their national legal systems. Macao SAR, as a small developed economy concentrated around booming gaming industry, stands among few jurisdictions that do not have comprehensive competition legislation. Present paper analyses current situation with regulation of market competition in Macao with special focus on the gaming industry. While general competition rules embedded in the Commercial Code are left to the private enforcement by interested parties, specific competition rules applied to the gaming activities have to be enforced by the sector regulator lacking the knowledge and experience in antitrust enforcement. As a result, the effective antitrust enforcement is largely non-existent. The international trade obligations of Macao SAR under the WTO framework or its bilateral trade relations with China and European Union have not prompted the adoption of competition law either. The study is an attempt to provide explanations as to the current state of affairs with competition rules and to anticipate further developments in this field.

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THE LIMITS FOR THE GLOBAL PROLIFERATION OF COMPETITION LAW: THE CASE OF MACAO SAR

European Scientific Journal September 2014 /SPECIAL/ edition Vol.2 ISSN: 1857 - 7881 (Print) e THE LIMITS FOR THE GLOBAL PROLIFERATION OF COMPETITION LAW: THE CASE OF MACAO SAR Alexandr Svetlicinii 0 MRes 0 LL.M 0 0 University of Macau, Faculty of Law , Macao SAR , China The adoption and enforcement of competition rules which replace or supplement state regulation of markets has become a global trend that led to almost universal proliferation of competition law regimes. Following the lead of the developed market economies an increasing number of developing countries and transition economies have introduced competition rules in their national legal systems. Macao SAR, as a small developed economy concentrated around booming gaming industry, stands among few jurisdictions that do not have comprehensive competition legislation. Present paper analyses current situation with regulation of market competition in Macao with special focus on the gaming industry. While general competition rules embedded in the Commercial Code are left to the private enforcement by interested parties, specific competition rules applied to the gaming activities have to be enforced by the sector regulator lacking the knowledge and experience in antitrust enforcement. As a result, the effective antitrust enforcement is largely non-existent. The international trade obligations of Macao SAR under the WTO framework or its bilateral trade relations with China and European Union have not prompted the adoption of competition law either. The study is an attempt to provide explanations as to the current state of affairs with competition rules and to anticipate further developments in this field. Competition law; economic regulation; gaming; Macao; unfair competition - Introduction The current transnational landscape of competition law regimes can be best described by the terms ?universal proliferation? and ?global convergence?. Already ten years ago it was reported that 101 countries had a competition law.7As reported by the UNCTAD in 2007, a total of 113 countries and regional groupings have adopted or were in the process of adopting competition legislation.8By 2009 the number of national competition authorities (NCAs) joining the International Competition Network has reached 104 NCAs from 92 jurisdictions.9 Even though it has been argued that competition law regime is active in roughly 60-70% of the countries with competition legislation,10 the universal proliferation of competition law regimes remains a largely uncontested trend. The global implementation of competition rules has become the norm with the end of the Cold War when numerous developing countries 7See F. Kronthaler and J. Stephan, Factors accounting for the enactment of a competition law ? an empirical analysis (May 2005), p. 5, available at http://www.iwh-halle.de/projects/competition_policy/Factors_01.PDF. 8UNCTAD Guidebook on competition systems (Geneva, 2007), available at http://unctad.org/en/Docs/ditcclp20072_en.pdf. 9ICN Factsheet and key messages, p. 1, available at http://www.internationalcompetitionnetwork.org/uploads/library/doc608.pdf. 10See A. Mateus, Competition and Development: What Competition Law Regime? (October 26, 2010), available at http://ssrn.com/abstract=1699643. have realized the benefits of competition rules for their national economies and consumers.11 The developing countries have been initially rejecting the idea of adopting competition rules when the government?s control over economy was strong but with the wave of economic reform including privatizations and other economic liberalization measures the governments have gradually replaced regulation with competition rules.12 Against this background, there are only few jurisdictions that have not made competition rules a part of their national legal system. In this regard the Macao Special Administrative Region of the People?s Republic of China (Macao SAR or Macao) represents a rare example of a developed market economy without a competition law regime.13 The most recent WTO trade policy review for Macao concluded that there has not been overarching competition legislation in Macao as the authorities consider that current provisions, which are scattered around various laws and sector-specific regulations and rules, have provided adequate protection given that the territory is small and most business are small and medium enterprises.14 The present paper considers these and other legal, economic and institutional factors that would explain the absence of competition law regime in Macao SAR.Casino gaming remains at the core of the Macao?s economy in terms of its share in the region?s GDP, employment and revenue.15 In this sense the discussion on the government?s policy towards competition in the gaming industry will contribute to the better understanding on why competition rules have not replaced sector regulation, which is currently the case in several other economic sectors such as energy, teleco (...truncated)


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Alexandr Svetlicinii. THE LIMITS FOR THE GLOBAL PROLIFERATION OF COMPETITION LAW: THE CASE OF MACAO SAR, European Scientific Journal, 2014, DOI: 10.19044/esj.2014.v10n10p%p