Our colleague Jos van Doormaal successfully defended his doctoral dissertation on 18 January 2021 for which he received the grade “magna cum laude”. His research, which was written before he started at KKF, namely at the University of Bremen from 2017 till 2019, focusses on the antitrust limits of modern-day Private Legal Systems (“PLSs”). The title of the dissertation is: “Nonlegal Sanctioning in Private Legal Systems: Limits in US Antitrust Law and EU Competition Law”. The research question is worded as follows: Do modern-day trade associations and their members for their role in the imposition and execution of nonlegal sanctions, infringe US Antitrust Law and EU Competition Law and, if yes, can they justify these extrajudicial measures?
From the outset of the doctoral dissertation it was established that some trade associations active in commodities industries, such as the diamond, cotton and cocoa trade have set-up arbitration tribunals for their members. The reason is that arbitration is more cost efficient and expeditious to resolve disputes between members than when they seek legal redress in a public court.
When a trader does not pay an arbitral award, all of the trade associations researched impose nonlegal sanctions (i.e. sanctions which do not originate from public courts) upon such a wrongdoer. For example, his or her membership can be withdrawn, other members can be instructed to not trade with him or her, or his or her name and photo can be displayed on a publicly available section of the relevant trade association’s website. Due to using such nonstate means of obtaining compliance with the rules of a trade association, they operate in the shadow of the law (i.e. within a PLS).
Whenever a trade association imposes a nonlegal sanction upon a wrongdoer, this association (but also its members given their role in the execution of this measure) could breach the two most important competition laws in the world, namely US Antitrust Law (i.e. Sections 1 and 2 of the Sherman Act) and EU Competition Law (i.e. Articles 101 and 102 TFEU). By employing a library-based legal research method and a comparative research method, it is discussed whether US Antitrust Law and EU Competition Law are indeed breached.
The doctoral dissertation concludes that the use of nonlegal sanctions by modern-day trade associations does pose hazards, but can be seen as the best alternative as opposed to cumbersome, time- consuming and expensive – often cross-border – litigation in court. This work then provides best practice guidelines to highlight under what conditions nonlegal sanctions imposed by a trade association and executed by its members does not violate US Antitrust Law and EU Competition Law. The doctoral dissertation will soon be published by Nomos.
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