The Interaction Between Competition Law and Corporate Governance - Opening the "Black Box"

Thépot, F. (2019). The Interaction Between Competition Law and Corporate Governance: Opening the ’Black Box’ (Global Competition Law and Economics Policy). Cambridge: Cambridge University Press. doi:10.1017/9781108505185

See also book review excerpted by Francisco Costa Cabral (University of Tilburg) published in Concurrences N° 4-2019, pp. 235-236

The theory of the firm, as a form of organisation of resources distinct from the market, has a central but often neglected role in competition law. The firm determines the scope of competition law, insofar as United States (US) and European Union (EU) rules apply to either “persons” or “undertakings” considered as a single economic entity. However, competition law is generally understood to govern the external dimension of firms—the interactions with other firms and consumers—and to leave their internal dimension to other fields of law dealing with “corporate governance”—notably, the organisation of corporate groups, the direction of legal entities, and the management of labour relationships. In a neoclassical economic point of view, firms would operate as the “black box” of this book’s title: only the allocation of inputs between firms and their production of outputs would matter for competition law, not what goes on inside them. Thépot’s book sets out to challenge this view, applying an original approach to great theoretical and practical interest. The title may be somewhat misleading: competition law does naturally consider an internal dimension when defining a firm, as well as when attributing liability to particular legal persons; neither are these normative choices neutral, with healthy discussions about the function of competition law and the deterrence of anti-competitive behaviour. The black box is thus already open but not ajar; as on the book’s cover, its contents still obscured. What this book does is to shine the light of corporate governance on the box, notably the use of agency theory to consider the separation of ownership and control of the firm. The results are reinvigorated policy calls for individual sanctions and valuing compliance programmes, a solid argument for responsibility within corporate groups along negligence, and an in-depth view of the emerging problems of structural links in minority shareholding and interlocking directorates. For more, see full book review published in Concurrences N° 4-2019, pp. 235-236.

The Interaction Between Competition Law and Corporate Governance - Opening the ’Black Box’