Competition policy as example of the “slow” process

In this series of texts, I am writing about my research regarding the contemporary debate when it comes to the neo-functionalism regional integration theory.

In his study of the neo-functionalism’s applicability, Lee has analysed the competition policy, which is an example of supranational governance over the economy. He argues that Haas interpretation of regional integration process and EU:s development still holds analytical purchase, where neo-functionalism is a mid-range theory that applies to the dynamics and development of individual policy sectors and sectorial integration process. With its original focus and core around economic aspects, the neo-functionalism is based on two inter-related claims and predictive views. Firstly, that integration occurs when organised economic interests pressure governments to manage economic interdependence resulting in centralisation of policies and the creation of common institutions. Secondly, that any initial decisions to integrate the polity results in both economic and political spill-overs which push regional integration forward. Already starting with ECSC thus at a more limited degree, the decision-making process was later developed into the aspects relating to promoting competitive market structures, breaking up anti-competitive behaviour such as market-rigging, price-fixing cartels and abusive monopolies. This institutional process were performed by supranational governance. The Commission was selected by the national governments of EEC (European Economic Community) as the principal competition agent with exclusive powers of investigation into suspected violations of the competition rules.

Furthermore, the focus on the supranational development meant that the neo-functionalistic studies shifted the investigative attention from the national executives and the decision-making process. The focus was shifted to the aspects identified as institutions, technocratic elites, interest groups and politicians operating at supranational level. The original assumption of neo-functionalism was based on that these actors pursued their own interests and by doing so they provided the dynamics for further integration, including the argument that change of loyalties and political transformation was part of the regional integration process. The existence of such supranational activity was, as mentioned earlier, understood to unleash a self-reinforcing dynamic labelled as spill-over that culminated in further and “deeper.” integration. In the case of competition policy, it is an early example where national governments had established supranational process with its own personnel like administrators, experts and lawyers whose decisions came to influence and determine policy approaches at both national and EU-levels of governance.

Within the competition policy, the development of DG Competition throughout the 1960s and 1970s was a process of slow accumulation of experience and development of norms and values that have been spread within the Commission. It resulted in aspects such as the formation of EU competition law (anti-trust) with inspiration from the USA. Another example, during the time of SEA implementation process, was the institutional determination and interest of the Commission to push the notion of competition into the more “sensitive areas” for the states such as market liberalisation of public utility. There were also examples regarding the imposition of ever-higher financial levies for infringing the competition rules or encouraging whistleblowers to inform the Commission about cartel activity. These actions were performed with “limited resources” (for example, in 1990 DG Competition had a staff of only around 400 individuals). As Lee pointed out this process, being an example for the notion of the political spill-over is particularly applicable, as the supranational officials became informal political entrepreneurs, also resulting in member state governments to delegating further powers to the supranational level.