Chicago Global

Has Globalization Become a Stale Cookie?

Something interesting is happening at this very moment in Europe. Something which is likely to teach a valuable and unforgettable lesson about the scope and the destiny of globalization.

The EU common market, the powerful engine behind European Union economic aggregation and growth rests on four fundamental freedoms: the free movement of goods, the free provision of services, the freedom of establishment and the free flow of capitals. 

Roughly speaking, free movement of goods means that there are no customs, tariffs or non-tariff barriers between EU Member States. Free provision of services means that anyone who is qualified to provide a service in a Member State can do the same in any other Member State. Freedom of establishment means that sudents, workers and corporations can elect their residence in any Member State without restrictions. Free flow of capitals means that investors may invest their capital in any Member State without nationality-based restrictions.

These fundamental (I would say constitutional) liberties of the European Union are now at jeopardy, due to the new taste of national governments for protectionism. The EU Commission sensed the threat posed to European aggregation and is fighting back to keep the common market open and competitive.

Banning Age Discrimination in Employment - US Lessons for European Lawmakers

In 2000, the European Union adopted Directive 2000/78/EC prohibiting, among others, direct or indirect discrimination on grounds of age in employment. This Directive contains precise definitions of direct and indirect discrimination and of harassment and allows certain exceptions to the principle of equal opportunities, which are defined as legitimate in a limited range of circumstances. Substantial changes in Member State legislation have been observed in recent years in direct consequence of the adoption of the EU legislation. However, some countries, including Germany, have not fully transposed the provisions yet. The Commission has already initiated infringement proceedings against certain Member States and is due to publish a report in 2006 on the state of transposition of Directive 2000/78/EC. The latest deadline for transposing the Directive into German law is December 31, 2006. The German parliament is in the process of meeting that deadline by enacting the Antidiscrimination Act (ADG).

Valuable Secrets in Antitrust Enforcement

With its 2002 Leniency Notice, the EU Commission has established the Leniency Program, one of the most effective tools for prosecuting illegal cartels pursuant Art. 81 of the EC Treaty.

Under the Leniency program, a company involved in a cartel can ‘blow the whistle’ and cooperate with the Commission by providing detailed evidence on its own involvement, as well as that of other undertakings, in the cartel.

The program rewards the first whistleblower with a 100% rebate on the fine applicable to him (participating in the program does not avoid ‘conviction’ for the infringement) - if the information provided allows the Commission to open an investigation - and grants lower rebates to other companies that cooperate after the opening of the investigation.

Great part of the evidence the applicant company submits to the Commission is documentary evidence – notes of meetings, flights schedules and tickets, e-mails – but the most valuable documents are corporate statements, with which corporate officials and attorneys explain to the Commission’s case handlers the functioning of the cartel.

Corporate statement, however, have a highly undesirable downside, when the applicant company is involved in a trans-national cartel and is being tried (or faces a trial) in a third-country jurisdiction (often the US) as a defendant in an antitrust private lawsuit.

The rules of pre-trial discovery, in fact, require the parties to disclose any documents relevant to the claim at trial, including, therefore, any written corporate statements rendered to the EU Commission. The risk of having to disclose self-incriminating information often restraints companies involved in cartels from cooperating with the EU Commission and puts the leniency program – so far a successful enforcement tool – at jeopardy.

Enjoying Italian soccer in a Chinese living room

90 are the minutes in a soccer game and 90 is the number Italians traditionally associate with fear. In this story, fear is what three major pay-tv and pay per view broadcasters operating in Italy are dealing with. Soccer is currently Italy’s most productive (and indebted) industry. Plus, like in any good ‘global economy’ thriller these days, China is also involved. But let’s start from the beginning….

Rupert Murdoch’s Sky, Silvio Berlusconi’s Mediaset and La7 (controlled by former telecom incumbent Telecom Italia) hold broadcasting rights for Italian Serie A (first division soccer), for satellite pay-tv (Sky) and for digital terrestrial pay-per-view (the others). Somehow (in a seemingly lawful way), such rights were sold to a number of Chinese broadcasters which merrily undertook to display the games on tv and on their Internet websites. An Italian peer-to-peer website, before each game, published the links to the live events broadcasted in China and a remarkable share of the Italian soccer audience began to link to Chinese websites and watch live premium soccer on laptop rather than subscribing pay-tv or pay-per-view.