UNIVERSITY PARK, Pa. — “European Competition Policy and Globalization,” a newly released book from Penn State Smeal College of Business Clinical Professor of International Business Terrence Guay and Chad Damro of the University of Edinburgh in Scotland, explores competition policies of the European Union (EU) and the effects they have on the global political economy.
The book examines the domestic and international dimensions of EU competition policy, particularly mergers, anti-competitive practices and state aids. The authors argue that important changes in that policy are having profound effects on the global political economy, and these changes are best understood as European Commission responses to new domestic and international pressures.
The authors contemplate this broad question: In what ways do changing external and internal factors affect the evolution of the EU’s competition policy and the role that the European Commission plays in it? Among the conclusions is that the EU, particularly the European Commission, has become a leading global regulator.
Guay joined Smeal in 2004. Prior to that he was a faculty member in the School of International Service at American University and the Maxwell School at Syracuse University. He holds a doctorate in political science and a master of arts in international relations, both from Syracuse. He has also earned a master of business administration degree in international business and finance from Ohio State and a bachelor’s degree in industrial distribution from Clarkson University.
Guay recently shared his perspectives on the subject of the book, his co-author, and how the book is relevant to the real world.
What influenced you to write about this particular subject?"Chad and I have similar research interests regarding the political economy of Europe and the European Union (EU). We were interested in explaining how the European Commission — the body of the EU that administers competition policy (what Americans call antitrust policy) — approaches competition policy in an increasingly globalized world. We believe that an approach that focuses on two-level 'games' is most helpful, since the European Commission interacts with other countries and international organizations (Level 1) and member states and firms within the EU (Level 2). Chad is an expert on EU competition policy, and my background is in international business and globalization. Our areas of expertise complement each other, and allowed us to create a book that is interdisciplinary and, I think, much better than what either of us could have written alone."
How would you describe your professional relationship with your co-author?"We both obtained graduate degrees from Syracuse University's Maxwell School in the mid-1990s. Although we didn't know each other at the time, we attended the same conferences on international and European studies and gradually developed a good friendship. Realizing we had similar interests and complementary strengths, we began writing conference papers together and organizing panels on competition policy. Eventually, we decided to write a book together. It was the first time either of us had worked with another scholar on such a large project. But I think Chad would agree that the entire process, which took about five years from contract to publication, went much more smoothly than either of us had expected."
How closely related is the subject matter in the book to the classes you teach at Smeal?"One of the courses I teach every fall semester is IB 450 The Business Environment of Europe. We spend about one week talking about competition policy in Europe, which includes the European Union's oversight of mergers and acquisitions, anti-competitive practices, and state aid (subsidies). So the cases we discuss in the book about Microsoft, Intel, Google, Boeing, and General Electric find their way into class discussions. 'European Competition Policy and Globalization' is a scholarly book that is too specialized for classroom use. I published a textbook in 2014 titled 'The Business Environment of Europe,' which I use in IB 450. At the MBA level, I teach BA 535 Global Perspectives. I use some of the examples from 'European Competition Policy and Globalization' to emphasize the point that the EU's influence as a global regulator must be recognized by future managers, including those who will work at non-European companies. We make the point in the book that even Jack Welch, GE's CEO who was successful in so many areas, failed to appreciate the impact that the European Commission and EU policies would have on his attempt to acquire Honeywell. I think that is a lesson that all business students, particularly MBAs, can learn from."
How is this book relevant to "the real world?""The issues raised in this book continue to be relevant. Just this week the European Commission accused Google of abusing its dominant position in the Android mobile phone operating system. U.S. regulators have not taken a similar action. This is similar to the cases we focus on in the book, that is, when EU and U.S. regulators diverge in their handling of competition decisions. We are interested in knowing why this happened, particularly with respect to the interactions the European Commission has had with actors within the EU and their peers in Washington. From a company's perspective, the issues are similar to those the EU accused Microsoft of in the 1990s, that is bundling products like Google's search engine into the Android operating system (Microsoft had bundled Internet Explorer, Windows Media Player, and other programs into the Windows operating system.) It will be interesting from a scholarly perspective to discover why Google didn't learn the lessons from Microsoft's lengthy battle with the EU. It also will be interesting to see whether regulatory bodies in other countries follow a path similar to the EU or U.S. in dealing with Google. We would guess the EU, since that has been the trend in recent years."