Global Trends To Mitigate Local Special Interests: India and Antitrust
India has a booming economy and although China gets much of the press regarding new economic power, India is usually mentioned as right behind. Indeed, James Wolfensohn, former head of the world bank, has specifically argued that India and China will return to commanding a large portion of the world’s GDP. Thus when India recently tried to change or update its merger laws, the idea was to improve the law so it would keep pace with the potential for economic growth. The law as intended and the law as passed, however, seem to be quite different. The Deal reports that “The new law requires companies with as little as $126 million of assets in India, even if they are only subsidiary operations, to notify officials there of any acquisition from around the globe. Reporting the merger plans and waiting 210 days before completing the deal would be required even if the target is not located in India and doesn’t do any business there.” As such the ABA and several other attorney groups have contacted the Indian government to urge it to change the law which they see as a anticompetitive.
It is entirely possible that the law was not only went “in a different direction during the give and take in Parliament” but reflects some real concerns any developing country will have about corporate law. Those concerns are not clear in the article and should be taken seriously. But taken at face value this situation offers a view of a potential way to see how government may take advantage of international law or at least how global trade can influence the voices in a debate. In one scenario an administration may bow to local interests and protectionist impulses. It may then engage in international deals or even treaties. When the two conflict, the international treaty may demand that the local laws are harmonized and the previous law could change (There are of course many steps and debates to be had over the conflcits between international and domestic law. Still, intellectual property law offers an example of possibly using international norms to achieve one interest group’s (i.e. the copyright industry’s) objectives). This process is not necessarily laudable as the local interests may be undercut and the democratic aspect of lawmaking comes into question. Nonetheless, it is a way the process may proceed.
Alternatively, it seems that the outside voices may provide more information and perspectives regarding the true ramifications of certain laws. If so, the advantage would be that the government may move slower and have too many compromises based on internal pressures, but international groups indicating how they view the law at least ensures that the government has a better sense of the impact of the law at both the domestic and international levels.