Antitrust and state-owned businesses

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How do antitrust authorities deal with foreign companies that are (largely) government owned? And are foreign state-owned businesses subject to the same competition rules as private domestic businesses?

Both Australia and Europe are currently grappling with these issues. In Australia the High Court has ruled that Garuda (owned by the Indonesian government) cannot claim immunity for actions it undertook as a commercial business. See here.

In Europe, Gazprom, the 51% Russian government owned company that supplies about 25% of Europe’s gas supplies, is being investigated for antitrust violations. As if to parody its lack of independence, Vladamir Putin has intervened in the investigation. And Gazprom’s main defense appears to be an argument that it is really an arm of the Russian government – so it does not operate according to standard commercial rules and objectives. See for example here.

Government owned businesses operating on an international scale appear to be on the rise.  But it is far from clear that western antitrust rules designed for private companies can adequately deal with these businesses. The EU’s approach to Gazprom may have no legal value in Australia, the US or other western countries, but it will have important implications for how we deal with ‘semi-public’ companies.

 

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