Competition law through the lenses of national constitutions: connecting competitive markets with socio-economic and environmental values

Abstract

This article analyses competition legislation through the lenses of national constitutions, given that these constitutions establish the foundational structures of national legal systems to which competition laws inherently belong. Building on existing constitutional literature, it posits that competition laws should be construed in accordance with the values promoted in national constitutions. The analysis is situated within the contemporary discourse surrounding the ongoing ‘just transition’ towards a carbon-neutral economy, i.e., a process in which socio-economic values (pertaining to the right to work, right to healthcare, and right to food) and environmental values (pertaining to a clean environment, biodiversity, and reducing emissions) constitute guiding tenets. Such a context invites the question of whether competition laws should be built and interpreted in a manner that facilitates the enhanced integration of socio-economic and environmental values enshrined in national constitutions. These contemplations are pivotal, since law plays a constitutive role in designing socio-economic structures, with the structuring of competitive markets being no exception. In light of this, the paper conducts a review of how national constitutions across the world safeguard competitive markets, socio-economic values, and environmental values. Specifically, the article categorizes the regulatory frameworks identified within all 52 national constitutions that explicitly protect competitive markets alongside socio-economic and environmental values. Subsequently, the paper transitions to an examination of two countries—Poland and South Africa—to elucidate how national competition laws reflect constitutional choices. It demonstrates that their constitutions and competition laws were shaped in a manner that offers a different space for incorporation of socio-economic and environmental values in the interpretation of competition laws. The article relies on an analysis of the texts of national constitutions and competition statutes, as well as selected case law of constitutional courts and ordinary courts. Overall, the article seeks to incite an academic discourse regarding the significance of national constitutions in the realm of antitrust. At the same time, it expands upon the literature concerning economic constitutions, especially regarding the European Union and its Member States.

1. INTRODUCTION

In October 2021, the Constitutional Court of South Africa handed down a judgment in the Mediclinic case concerning a merger between the companies providing hospital services. The contentious issue in this case was whether the merger would significantly affect poor, uninsured patients by raising the prices of the services offered. In its ruling, the Constitutional Court viewed the application of competition law as part of the constitutional obligation on the part of the state to promote and protect socio-economic rights, including access to health care. The Court noted that ‘maintaining or increasing the scope for choice of essential and much-needed services with particular regard to the plight of the financially under-resourced or the vulnerable, should always be at the back of the decision-makers’ minds when dealing with mergers’.¹ The Constitutional Court set aside the judgment of the Competition Appeal Court to allow the merger, considering that the latter Court exceeded the limits of its judicial review powers. While the accuracy of the Constitutional Court’s ruling may be subject to disagreements,² the case demonstrates the relevance of constitutional values in interpretation of competition law.

The case illustrates the principal problem that the paper addresses: that of the relationship between the protection of competition and other values democratic societies wish to promote in their national constitutions. This problem deserves attention today, that is in the time of radical climate change and the economic transformation away from fossil fuels.³ It relates to the need to conduct a ‘just transition’ understood as a process ‘towards an environmentally sustainable economy,’ which ‘needs to be well managed and contribute to the goals of decent work for all, social inclusion, and the eradication of poverty’.⁴ Under such a paradigm, socio-economic values (related to the right to work, right to health care, right to food, etc), and environmental values (related to a clean environment, biodiversity, and reducing emissions) constitute guiding principles for the ‘just transition’ to a carbon-neutral economy. Such a context raises the question whether competition laws should be designed and interpreted so that constitutional socio-economic and environmental values can be better promoted.

These reflections are fundamental, as law can be perceived to play a constitutive role in designing socio-economic structures: it shapes social and economic reality rather than merely reacting to it.⁵ As a result, as underlined by Kjaer, there is ‘no economy without law, and law is, indeed, intrinsic to economic reproduction’.⁶ Indeed, recent studies demonstrate the important role that private law plays in shaping the foundations of the economic system.⁷ However, beyond private law, such a perspective is largely absent. In particular, there is a research gap concerning relationship between the two elements of a legal system that, arguably, play a key role in constructing economic systems of which competitive markets are a part, that is constitutional law, which sets the general frames of the legal system within which markets operate; and competition law, which establishes the conditions under which private firms and other actors operate within such markets.

Against such a backdrop, this article endeavors to examine the interconnections between national constitutions and the corresponding national competition laws. National constitutions establish the foundational framework of domestic legal systems, and typically take precedence when conflicts with statutory laws of lower hierarchical status emerge. Crucially, constitutions express the fundamental values societies wish to uphold,⁸ and they provide a framework for balancing diverse (and sometimes conflicting) values. Competition laws are part of a broader, complex legal framework⁹ in which national constitutions are of key importance. Therefore, national competition laws should conform to them and be interpreted in light of constitutional values (ie, pro-constitutional interpretation). This is not to say that legal rules establishing the protection of competition cannot have a constitutional nature themselves.¹⁰ However, the question of whether this is the case and how protection of competition is positioned against other constitutional values requires an examination of national constitutions and the relevant national competition laws.¹¹

Therefore, this article reviews the ways in which national constitutions protect competitive markets, socio-economic and environmental values and analyses whether national competition laws reflect these constitutional choices. After providing an overview of approaches existing in all identified national constitutions which regulate competition, this article focuses on the analysis of two countries that in the last thirty years transformed their legal and economic systems, that is Poland and South Africa. While the history of transformation of these two countries is different, the process of transition involved in both cases a move to constitutional democracy and economic order based on open markets away from an inefficient centrally planned economy (Poland)¹² and from a highly concentrated economy benefiting the ruling white minority at the expense of the black majority (South Africa).¹³ Open and competitive markets brought a promise of much needed economic development and competition law could have been seen as one of the tools to make this promise come true.¹⁴ Therefore, the transition in both countries involved not only a change in their respective constitutional legal orders (ie, adoption of new constitutions) but also the adoption and active enforcement of competition laws. As a result of these processes, the constitutions and competition laws of these two countries were shaped in a manner which offers today a varied space for inclusion of socio-economic and environmental values in the interpretation of competition laws. The article aims to identify the status quo in this respect and, by doing so, stimulate the debate on how to design and interpret competition law in the context of ‘just transition’. It also aims to reflect on the design of competition laws so that they reflect constitutional values. As will be further explained,¹⁵ such an analysis, while necessary, is currently missing in both the constitutional and antitrust legal literature. Importantly, the relevance of national constitutions to competition law has not yet been subjected to comprehensive analysis in the literature.

One of the ideas behind the article is to get underneath the classic mindset and to discuss the laws of countries that are often perceived as peripheral to the core Western European countries (eg, Germany, France, the UK, and the USA), and thus are usually viewed as ‘importers’ rather than ‘exporters’ of legal inspirations on how to regulate the economy. At the same time, the paper sets the stage for further analysis as it offers an overview of all 52 national constitutions that explicitly regulate the protection of competition. Finally, by positioning competition law against the background of values contained in national constitutions, the article speaks to the literature on the relationship between competition law and democracy.¹⁶

The structure of the article is as follows: Section 2 discusses pertinent streams of debates in antitrust and constitutional scholarship, setting the stage for further analysis. While section 2 discusses, among others, the notion of an economic constitution developed in the literature with reference to the European Union (EU) Single Market, the focus of the article is on national constitutional and competition laws rather than EU law.¹⁷ Section 3 offers an overview how various national constitutions regulate and protect competition. The findings presented rely on an analysis of the texts of all identified national constitutions that regulate the protection of competition. Section 3 also explains how historical choices influenced the shapes of national constitutions. Section 4 consists of case studies of Poland and South Africa. First, the relevant provisions of their national constitutions and examples of constitutional courts’ case law are subject to analysis. It aims to answer questions about the scope of constitutional regulation of competitive markets and how socio-economic and environmental values are protected in national constitutions. Secondly, the relevant provisions of national competition laws and examples of pertinent antitrust case law are subject to analysis. It aims to explain the extent of protection of constitutionally enshrined socio-economic and environmental values within competition law. Section 5 concludes and suggests in what respects further research is needed. The research agenda proposed in this paper builds on the author’s earlier research findings, which described the interrelations between constitutional democracies’ legal order based on the rule of law and competition law in the context of democratic backsliding, suggesting that competition law should be responsive to values democratic societies wish to protect.¹⁸

2. NATIONAL CONSTITUTIONS AND THE DESIGN OF PROTECTION OF COMPETITION: STATE-OF-THE-ART

Several streams in the literature may benefit from the study of the interrelations between national constitutions and competition laws and the place of socio-economic and environmental values in national constitutions and competition laws. They include EU literature on economic constitutions, antitrust literature on the goals of competition laws and new competition law regimes, as well as literature on the scope of modern constitutionalism.

The notion of the economic constitution in EU law and the protection of competition

The existing academic debate in the English-speaking world on the constitutional nature of the protection of competition is largely limited to EU law. Since the EU Internal Market, as set out in Article 3 of the Treaty on the European Union (TEU), includes a system ensuring that competition is not distorted,¹⁹ and competition rules are part of EU primary law, the role of competition law within the constitutional dimension of EU law has been subject to scrutiny. Its relation with other areas of EU law, including fundamental freedoms, or more recently environmental protection is also covered. The question of how to reconcile protection of competition with other values is also not new. The ECJ’s rulings in Albany and Wouters are classic points of reference here.²⁰ The rules safeguarding competitive neutrality in the EU Internal Market are also relevant. In particular, a key role is played by Article 106(1) TFEU which obliges the EU Member States to respect the treaty rules with respect to public undertakings and to undertakings with special or exclusive rights.²¹

It has been argued that the EU Internal Market implements the concept of an economic constitution, which was developed primarily out of ordoliberal school of thought.²² This notion refers to the ‘key constitutional principles and institutional arrangements which may be relevant to management of the economy’.²³ The EU Treaties are an emblematic example of a substantive version of such an economic constitution as they set out substantive principles regarding how the economy of the EU should be organised.²⁴ On the other hand, under the communicative model, the economic constitution provides merely rules for the institutional organization of economic management but does not attempt to regulate the substance of economic management.²⁵ The EU Treaties arguably implement both models as they offer a comprehensive regulation of both substance and institutions of economic management.

The EU literature on the economic constitution does not address the question this paper poses, that is a question about the place of competitive markets in the national constitutions. The EU literature on economic constitutions understands the notion of a constitution in a broad way,²⁶ that is to include various sub-constitutional statutory measures of economic management that lay beyond national constitutions. While competition law is an integral part of such an economic constitution and, therefore, can be conceived to have a constitutional nature in such a sense,²⁷ it is not obvious that it has such a nature if national constitutions are considered as a point of reference. Research in this respect is necessary. Moreover, the EU literature on economic constitutions often considers the ordoliberal school of thought as a starting point for the debate on how law should design the substance of economic management within the state.²⁸ Since the protection of individual economic freedom against state political power and private economic power is a crucial aspect of the ordoliberal school of thought,²⁹ the discussion offers limited insights into how to approach the promotion of socio-economic and environmental values within this substantive concept of an economic constitution. Only recently have the studies concerning the relation between competition law and human rights generally and socio-economic rights more specifically emerged,³⁰ but the focus is not on national constitutional laws.

Scholarly debates in competition law

Perceiving competition in the light of national constitutions can help shed new light on the debate over the aims of antitrust interventions. This disagreement is two-fold. First, the advocates of purely economic goals debate that economic efficiencies should be maximized (allocative, productive, and dynamic efficiency³¹). While competition authorities often frame their mission within the consumer welfare paradigm,³² it is not always clear how the adverse effects on consumer welfare should be measured, in particular when there is no adverse effect on prices.³³ Moreover, in the context of EU competition law, there is a disagreement over whether consumer welfare is indeed a goal of competition law as the interpretation by the CJEU suggests that we should consider protection of the competitive process as such a goal.³⁴ This is a question of relevance for the competition laws of EU Member States as they are often modeled after EU competition rules and applied in parallel by Member States’ national competition authorities. Secondly, a growing number of scholars depart from the narrowly constructed economic goal(s) of competition law and call for a more diverse set of antitrust goals.³⁵ Some scholars are concerned about the adverse effects produced by the functioning of the market and argue that competition law should be concerned with inequalities and combating poverty.³⁶ Protection of the right to market access as a way of ensuring equal opportunities,³⁷ or to put it differently the role of competition law in keeping markets open³⁸ is crucial in this context. There is also a growing body of literature discussing sustainability as a goal of antitrust intervention.³⁹

This disagreement is not likely to be solved any time soon, and it would be naïve to argue that a one-size-fits-all solution as to what goal(s) competition law should promote is possible. Arguably, this is a jurisdiction-specific question and, thus, there is a need to address a question of how fundamental, market-related choices made in national constitutions inform the goals which should be promoted in the respective competition laws.⁴⁰ In particular, one of the questions is whether national constitutions might require that competition laws be interpreted so that socio-economic and environmental values are taken into consideration and if so to what extent.

A related question is to what extent national competition law regimes should be left free to choose their own context-fitting solutions.⁴¹ Recent findings show the dominant influences from approaches promoted by mature competition law regimes.⁴² Against this background, persuasive arguments can be made that national competition law systems need to be flexible.⁴³ There is also literature arguing for a greater diversity in European competition law.⁴⁴ This literature can be developed by explaining the role of national constitutions in shaping national competition laws both in the case of EU Member States and beyond. In this context, the experiences of Poland—a country which entered economic transition with its own, ‘home-made’ competition law⁴⁵ and then brought it in line with the EU template⁴⁶ are very relevant.

Scholarly debates in constitutional law

The research on the place of competition law within the broader constitutional law framework needs to be positioned against debates among constitutionalists that are centred around the question of the scope of constitutionalism (purely political or broader, including socio-economic aspects). According to a classic definition, constitutionalism is focused on limited government and individual political freedom.⁴⁷ In contrast, broader concepts⁴⁸ often examine constitutionalism’s links with supranational relations, social movements, markets, social welfare⁴⁹ and combating poverty.⁵⁰ However, the constitutional debate is often concentrated on the political aspects of constitutionalism and the role it plays in curbing unconstrained political power.⁵¹ The role of checks and balances and the judicial (constitutional) review is subject to particular attention.⁵² This is also true for socio-economic rights.⁵³ On the other hand, markets and the organization of the economy received more limited attention. In this context, it is relevant that the limited character of the debate on political economy (the hands-off approach) has led to abandoning the perspective that ‘the economy is always already political in both its origins and its consequences’,⁵⁴ while ignoring the role that law plays in terms of power distribution in a society.⁵⁵ This is why today we observe the revival of ‘democracy-of-opportunity’ tradition in U.S. legal scholarship.⁵⁶ Moreover, the topic of ensuring social welfare (eg, through socio-economic rights) remains less developed than political rights.⁵⁷ Since reconciling the market with social rights remains more difficult than reconciling it with political rights,⁵⁸ a study tackling socio-economic and environmental values in the context of the functioning of markets is critical.

Against this background, neo-constitutionalism, which grew in Italy and in the Global South upon the critique of exclusive legal positivism and the critique of formalism, as well as the complete separation of law, values, and social practices⁵⁹ is an important point of reference. It links constitutional frameworks with socio-economic transformations by enhancing the democratic state, civic participation, as well as the fair redistribution of goods. One of its aims is the protection of consumers, weaker parties, the development of socio-economic rights, and achieving a deeper accountability on the part of institutional actors via constitutional change and interpretation.⁶⁰

3. PROTECTION OF COMPETITION IN NATIONAL CONSTITUTIONS

The existing gaps in the constitutional and competition law scholarship invite a study on whether, and if so, how national constitutions protect competition. The question addressed in this section is what national constitutions offer such a protection and what regulatory approaches in this respect can be identified. The section also aims to reveal whether the national constitutions that protect competition aim to protect, at the same time, socio-economic and environmental values. The historical choices that inform the shape of national constitutions are introduced at the beginning to provide a background for the analysis.

The findings presented rely on the analysis of the texts of all identified national constitutions that regulate the protection of competition.⁶¹

Background: historical constitutional choices

The question about the place of protection of competition within a legal order and its relation with constitutional values relates to different historical constitutional choices. On one hand, a part of the historically older constitutions tend not to provide for direct regulation aimed at guaranteeing the protection of competition or socio-economic rights. Consider, for example, the U.S. Constitution, where the questions of market and economy are principally about freedom of contract and the protection of property and where the power to regulate markets is outside the constitutional provisions.⁶² In such a model, protection of competitive markets and of socio-economic rights are achieved below the level of constitutional provisions—as a result of landmark statutes and judgments (like in the USA after the New Deal and the Civil Rights Movement); or by regular statutes and direct implementation of international human rights standards. In such cases, the primary role of the national constitutions is to regulate government and other essential institutions (such as the independent judiciary and due process) rather than to provide a particular concept of economy or social welfare.

On the other hand, younger constitutions provide for either a general limitation on the free market and property (—through references to the common good, the social welfare paradigm, and environmental protection), or a detailed limitation by introducing normative concepts of labour rights, consumer rights, and measurers to combat inequalities or poverty. For example, the South African or Polish constitutions, which will be discussed in Section 4 of this article, provide different levels of direct and indirect limitations on markets and property rights. Therefore, they can be used by constitutional courts to safeguard socio-economic rights. Simultaneously, these constitutions may possess a transformative nature and functions; they cherish a broader emancipatory project that assigns a key role to the state in pursuing change.⁶³ Consequently, transformative constitutionalism as a legal concept is not merely a distinctive feature of Global South countries, but is part of a wider global trend toward more expansive constitutions that encompass socio-economic rights and no longer regard private relationships as outside constitutional bounds.⁶⁴

Overview of national constitutions

The study conducted shows that 52 national constitutions explicitly regulate the protection of competition.⁶⁵ In line with the historical choices presented above, they include, most often, the constitutions of countries of Latin America and Europe, in particular Central-Eastern and Eastern Europe. Additionally, several constitutions of African and Asian countries also protect competition.

Protection of competition is frequently regulated in Latin American constitutions. This is evident in the cases of Argentina, Brazil, Colombia, Dominicana, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Paraguay, Peru, and Venezuela. Furthermore, Bolivia, Costa Rica and Honduras prohibit private monopolies. The examples of Colombia, Argentina, Brazil, Ecuador, Mexico, and Peru are particularly noteworthy as they represent different approaches to the regulation of competitive markets.

The Constitution of Colombia⁶⁶ establishes a constitutional right to compete⁶⁷ and imposes on the state an obligation to protect against the impediments to or restriction of economic freedom as well as against abuse of dominant position.⁶⁸ However, at the same time, it provides that the scope of protection of economic freedom may be limited when the social interest, the environment, and the cultural patrimony of the nation demand it.⁶⁹ This is in line with the broader constitutional framework: the Colombia’s Constitution secures socio-economic rights and highlights the state’s obligation to provide public services and promote social equity. The Constitution also grants the right to a healthy environment and participation in environmental decision-making.

In Argentina,⁷⁰ protection of competition has a different character as it is part of the provision focused on consumers and their rights.⁷¹ At the same time, Argentina’s Constitution enshrines socio-economic rights, such as the right to education and healthcare. In addition, the state is responsible for ensuring these rights and protecting a healthy environment.

In Brazil,⁷² a free competition is one of the principles of the economic order established and described in Article 170 of the Constitution. However, in its very foundation, the economic order described in this provision is linked to the value of human labour and free enterprise, as well as social justice. Moreover, free competition is just one of the principles that need to be observed. Others include environmental protection, reduction of regional and social inequalities, the pursuit of full employment, and preferential treatment for small-scale firms. In addition, the Brazilian Constitution requires the adoption of laws to ‘repress abuse of economic power seeking to dominate markets, to eliminate competition and to increase profits arbitrarily’.⁷³ Moreover, Brazil’s Constitution contains an extensive list of socio-economic rights and stipulates the state’s duty to provide social welfare and reduce inequality. It also ensures the right to an ecologically balanced environment.

In the Constitution of Ecuador,⁷⁴ the regulation of competition takes place on three levels. First, the state has a duty to establish ‘mechanisms of sanction’ to prevent any private monopoly or oligopoly practices, abuse of dominant position and ‘other practices of unfair competition’.⁷⁵ Secondly, the state is obliged to assure transparency and efficiency in markets and encourage competition ‘in equal conditions and equal opportunity’.⁷⁶ In parallel, the state is obliged to encourage and safeguard fair trade as ‘a mean of access to quality goods and services, minimising the distortions of middlemen and promoting sustainability’.⁷⁷ Thirdly, the Constitution specifies that the objective of trade policy is to prevent monopolies and oligopolies and other practices that might affect market functioning.⁷⁸ At the same time, in Chapter 2 the Constitution contains a comprehensive list of socio-economic rights in line with a commitment to ‘Buen Vivir’ (Good Living) principle. Last but not least, it is revolutionary with respect to the protection of the environment as it grants in Article 71 legal rights to nature and establishes in Chapter 7 various responsibilities of the state with respect to environmental protection and the restoration of nature.

Mexico⁷⁹ is characterized by yet another approach as it contains in Article 28 of the Constitution a very detailed regulation of competition both in terms of substance and institutional organization. Monopoly practices are prohibited and the requirement that law punishes collusion is included in the Constitution. Both the exclusionary practices and exploitative practices such as forcing consumers to pay unreasonable prices are directly mentioned in Article 28. Moreover, the Constitution establishes a competition authority and sets constitutional requirements for it to be effective and autonomous. Moreover, Mexico’s Constitution contains a broad catalogue of socio-economic rights, including the rights to education, health, housing, social security, and recognizes the right to a healthy environment.

Finally, in Peru,⁸⁰ Article 61 of the Constitution imposes on the state a positive obligation to promote and to oversee free competition and to combat practices limiting competition or amounting to the abuse of dominant or monopolistic positions. It also prohibits authorizing or establishing monopolies by means of law. Simultaneously, Peru’s Constitution guarantees socio-economic rights and describes the state’s responsibility to ensure social inclusion. It also establishes the right to a healthy environment.

Another set of examples of constitutional regulation of competition comes from European post-communist countries, which usually adopted new constitutions (or significantly amended the existing ones) in the 1990s as part of legal and economic reforms. Since these reforms concerned not only the political system (the establishment of a constitutional democracy) but also the economic system (the establishment of a free-market economy), they often included regulations for the protection of competitive markets at the constitutional level. Relevant cases concern EU Member States, that is, Bulgaria, Croatia, Hungary, Lithuania, Romania, Slovakia, Slovenia, as well as non-EU countries, that is, Armenia, Azerbaijan, Georgia, Kosovo, Moldova, Montenegro, North Macedonia, Serbia, Russia, and Ukraine. In many instances, similar patterns can be identified.

In Bulgaria,⁸¹ Article 19(1) of the Constitution states that the economy shall be based on free economic initiative. Article 19(2) imposes on the state an obligation to establish and guarantee equal legal conditions for economic activity to all citizens and legal entities. It explains that this shall be achieved by preventing abuse of a monopoly status and unfair competition, and by protecting consumers. At the same time, Bulgaria’s Constitution safeguards values related to social security, healthcare, and education (Articles 48–52) and mandates environmental protection (Article 15).

In a similar way, in Croatia,⁸² Article 49(1) of the Constitution states that entrepreneurial and market freedom are the basis of the Croatian economic system. Moreover, under Article 49(2) the state has a positive obligation to ensure that all entrepreneurs have an equal legal status on the market. It also requires that abuse of monopoly position, which is subject to be defined by law, be forbidden. At the same time, the Croatian Constitution protects the rights to social security, health, and education (Articles 56–70), and obliges the state to ensure a healthy environment (Article 69).

Similar to Croatia, the Constitution of Hungary⁸³ describes the economic system. Article M(1) states that it should be based ‘on work which creates value’ and on freedom of enterprise. It also covers safeguards related to social security, employment, and health (Articles XIX–XX), and ensures the sustainable use of resources (Article P). Under Article M(2), the state has a positive obligation to ensure the conditions for ‘fair economic competition’, act against ‘any abuse of a dominant position’, and defend the rights of consumers.

Slovakia⁸⁴ is yet another European country that describes its economic system in its constitution. In Article 55(1) of the Constitution, it explains that the economy of the Slovak Republic is based on ‘the principles of a socially and ecologically oriented market economy’. Article 55(2) establishes a positive duty of the state to protect and promote economic competition, but it refers to the sub-constitutional level as a place for establishing the details in this respect. Slovakia’s Constitution also ensures social security, health care, and education (Articles 35–39), and guarantees a healthy environment (Article 44).

In Romania,⁸⁵ the economic system of the country is described in Article 135 as ‘a free market economy, based on free enterprise and competition’. While differently to Slovakia the social character of such a market economy is not mentioned in the Constitution, it contains a catalogue of socio-economic rights (Articles 32–35) including the right to a healthy environment and imposes on the state an obligation to protect the environment (Article 135). What’s more, the Constitution of Romania aplies also horizontally; it imposes on natural and legal persons a duty to protect and improve the environment (Article 35(5)).

In Lithuania,⁸⁶ Article 46 of the Constitution prohibits monopolisation of production on the market and mandates that law shall protect freedom of fair competition. In parallel, Lithuania’s Constitution guarantees social security, healthcare, and education (Articles 41–49), and mandates environmental protection (Article 53).

In Slovenia,⁸⁷ the Constitution guarantees in Article 74(1) ‘free economic initiative’. In Article 74(3), it prohibits both unfair competition practices and practices restricting competition once they are contrary to the law. The Constitution also establishes the right to social protection (Article 50) and the right to health care (Article 51). It imposes on the state the obligation to create opportunities for employment and work (Article 66), as well as to legislate and protect the healthy living environment (Article 72). It also includes a novel right related to the environment: the right to a drinking water (Article 70a).

In Ukraine,⁸⁸ Article 42(3) of the Constitution establishes a positive obligation of the state to ensure ‘the protection of competition in entrepreneurial activity’, and stipulates that ‘abuse of a monopolistic position in the market, the unlawful restriction of competition, and unfair competition, shall not be permitted’. Ukraine’s Constitution also protects socio-economic rights such as a right to a reasonable standard of living (Article 48) and the right to health care (Article 49). Natural environment is also protected (Article 50).

In contrast to Central-Eastern and Eastern European countries, the protection of competition at the constitutional level is very uncommon in the case of Western Democracies, whose constitutions tend to be older. Denmark, Portugal, and Switzerland are exceptions.

In Denmark⁸⁹, part VIII (74) of the Constitution states that any restraint of the free and equal access to trade which is not based on the public weal, shall be abolished by a statute. Protection of socio-economic and environmental values is also constitutionally enshrined.

In Portugal,⁹⁰ the protection of competition is a task of the state. Under Article 81 of the Constitution, the state shall ensure ‘the efficient operation of the markets, in such a way as to guarantee a balanced competition between businesses, counter monopolistic forms of organization and repress abuses of dominant positions and other practices that are harmful to the general interest’. Portugal’s Constitution also safeguards socio-economic rights like the right to healthcare, education, and housing within its Constitution (Articles 63–72). Article 66 mandates the protection of a healthy environment. In addition, the Constitution provides that the state is obliged to promote social equality and environmental sustainability.

In Switzerland,⁹¹ there is a constitutional obligation of the Confederation to legislate with respect to protection of competition. Article 96(1) provides that ‘the Confederation shall legislate against the damaging effects in economic or social terms of cartels and other restraints on competition’, while Article 96(2) that the measures taken should be aimed at preventing abuses in price maintenance by dominant undertakings. Switzerland also enshrines social welfare and equal opportunities in its constitution as well as rights to health, education, and social security. The Constitution underlines the need for a sustainable environment and mandates the state to safeguard natural resources (Article 74).

Last but not least, the protection of competition is regulated by constitutions of three African countries, that is Angola, Egypt, Morocco and eight Asian countries, that is Bhutan, Korea, Myanmar, Nepal, Pakistan, Philippines, Thailand, and Turkey. Several constitutions can be presented.

In Korea,⁹² Article 119(2) gives a state a power (but does not impose an obligation in this respect) to regulate and coordinate economic affairs. This is done, among others, to prevent the domination of the market and prevent abuse of economic power. However, the very same provisions specify that regulation and coordination of economic affairs is also about maintaining the balanced growth and stability of the national economy, ensuring proper distribution of income, and democratizing the economy. The Constitution ensures social security, health, and education (Articles 32–34), and mandates environmental protection (Article 35).

In Turkey,⁹³ Article 167 of the Constitution imposes on the state a duty to ensure and promote ‘the sound and orderly functioning of the markets for money, credit, capital, goods and services’ as well as to ‘prevent the formation of monopolies and cartels in the markets, emerged in practice or by agreement’. Turkey’s Constitution covers social security, health, and education (Articles 56–65), and mandates the right to a healthy environment (Article 56).

In Thailand,⁹⁴ a state is under a duty to eliminate ‘unfair economic monopoly’ and develop competitiveness (section 75). Such a duty builds on the idea that the state should organize an economic system so as it provides opportunities for all the people to benefit from the economic growth in a comprehensive, fair and sustainable manner (section 75). In addition, the Constitution enshrines socio-economic rights (such as right to healthcare) and imposes on the state a duty to establish policies promoting various socio-economic values and to protect the environment.

In the Philippines,⁹⁵ the Constitution prohibits restriction of competition,⁹⁶ but such a prohibition exists within the framework of specific state duties concerning social, economic, and environmental spheres. The Constitution also allows for the adoption of regulatory measures protecting domestic firms from foreign competition.⁹⁷

In Egypt,⁹⁸ the economic system that ‘aims at achieving prosperity in the country through sustainable development and social justice’ is committed, among other things such as competitiveness and balanced growth, to preventing monopolistic practices.⁹⁹ The Constitution imposes on the state various duties with respect to socio-economic and environmental values. For example ‘right to live in a healthy, sound and balanced environment’ is set in the Constitution and its protection is a state duty.¹⁰⁰ The state is committed to taking the necessary measures to preserve it, avoid harming it, rationally use its natural resources to ensure that sustainable development is achieved, and guarantee the rights of future generations thereto.

In Marocco,¹⁰¹ the Constitution prohibits abuse of dominant position and other anticompetitive practices.¹⁰² It also establishes a competition authority (Conseil de la concurrence). It safeguards its independence and lists its tasks¹⁰³ and considers ‘the transparency and the equity of economic relations’ as a goal of its activity.¹⁰⁴ On top of it, the Constitution protects ‘the freedom to contract and free competition’ and calls on the state to guarantee them.¹⁰⁵ Such an obligation goes hand in hand with a state’s task to work for ‘a lasting human development, likewise to permit the consolidation of social justice and the preservation of the national natural resources and of the rights of the future generations’.¹⁰⁶ Simultaneously, the state is supposed to ‘guarantee the equality of opportunities for all and [to] one specific protection for the socially disfavoured categories’.¹⁰⁷

In summary, the research conducted shows that the majority of 52 constitutions which explicitly regulate the protection of competition on the market can be found in the countries of Central-Eastern Europe and Latin America. Conversely, constitutions of Africa, Asia, Western Europe, and North America regulate the protection of competition on the constitutional level far more rarely.

As elaborated upon in the subsequent section, different regulatory approaches to protecting competition on the constitutional level can be discerned.¹⁰⁸

In some instances, national constitutions go as far as establishing competition authorities and requiring their independence. This is the case in Mexico and Morocco. Such a constitutional entrenchment of the competition authority may serve as a safeguard against political actions aiming at undermining the effective functioning of the competition authority (or its existence altogether).¹⁰⁹

The research further elucidates that the identified national constitutions do not solely protect competition (or other key elements of free market economies, that is right to property and freedom of economic activity). Instead, all these constitutions concurrently uphold socio-economic and environmental values. Moreover, they usually take into account the societal implications resulting from market operations. The references in the constitutions to such concepts as social justice, citizens’ welfare or sustainable development illustrate this. Consequently, the future, in-depth research on the regulation of the protection of competition in particular national constitution(s), should contextualize the relevant constitutional provisions that mandate competition protection within a broader framework of constitutional regulation concerning the economy, socio-economic rights and the protection of the environment. It can be argued that such an interpretative approach will facilitate a precise pro-constitutional reading of national competition law statutes. Additionally, forthcoming extensive studies should elucidate the normative significance of the constitutional provisions safeguarding competition in relation to other pertinent constitutional precepts. It is anticipated that the relevant provisions of Central-Eastern European and Latin American constitutions will frequently exhibit a robust normative character, thereby affording substantial leeway for both constitutional and ordinary courts to intervene in order to uphold the values enshrined within these constitutions.

Identified approaches in national constitutions

The overview of national constitutions presented above shows that four principal approaches to regulating protection of competition on the constitutional level can be identified: (i) right-oriented approach, (ii) prohibition-oriented approach, (iii) task-oriented approach, and (iv) principle-oriented approach. These approaches are not mutually exclusive, as national constitutions sometimes apply more than one approach simultaneously. Specifically, it is not uncommon for these constitutions to impose an obligation upon the state to uphold competition while concurrently prohibiting anticompetitive practices at the constitutional level.

As illustrated in Table 1, the right-oriented approach materializes in Colombia and Paraguay: the constitutionally anchored individual right to compete on the market (ie, right to competitive marketplace) can be identified in their national constitutions. Two variations of such an approach are conceivable. On one hand, in the case of Colombia, such a right has a self-standing character. The Constitution of Colombia provides that ‘free economic competition is a right of everyone’.¹¹⁰ At the same time, such a right is not unlimited: the Constitution of Colombia stipulates that it entails responsibilities, which corresponds to the idea that enterprise (ie, business activity) bears a social function that entails obligations.¹¹¹ On the other hand, protection of competition can be conceptualised as an embodiment of the right to economic activity under equal conditions. Paraguay is a case here.¹¹² Although only two countries represent right-oriented approach,¹¹³ the conceptualization of competition protection through the lens of constitutional rights possesses broader implications. In national constitutions that do not directly enshrine competition protection,¹¹⁴ a constitutionally guaranteed freedom of economic activity emerges as a plausible candidate for the indirect constitutional foundation for competition protection. Poland, which is further elaborated upon in Section 4, serves as a pertinent illustration in this regard.

Prohibition-oriented approach is more common: several constitutions contain substantive legal norms prohibiting anticompetitive practices (or at least certain types of them). In other words, firms will infringe upon constitutional values—not just lower-level competition legislation—when they restrict competition in the market. Several variations of prohibition-oriented approach can be identified. First, national constitutions contain a prohibition covering both anticompetitive agreements and abuse of dominant position. The constitutions of Mexico and Panama feature a detailed prohibition, while Armenia, Morocco, Slovenia, Paraguay, and Ukraine a generalist one (which is generally more common). Secondly, some national constitutions prohibit abuse of dominant position or private monopolies, but do not address collusion. Croatia (with respect to prohibition of abuse of dominant position) as well as Bolivia and Costa Rica (with respect to prohibition of private monopolies) serve as examples here.

Thirdly, many constitutions adopt a task-oriented approach. They stipulate that the protection of competition is a task of the state. In other words, a constitutional norm imposes on the state a positive obligation (a duty) to protect competition in the market. Normally, positive obligations are not directly enforceable by individuals before the courts.¹¹⁵ However, the fact that the national constitution imposes on the state a duty to protect competition compels a law-maker (ie, national parliament) to adopt sub-constitutional competition legislation. Moreover, the constitutional duty to protect competition can serve as a benchmark for the assessment of whether the state fulfils its responsibilities in practice and, if so, to what extent.¹¹⁶

The task-oriented approach is the most common among the scrutinized countries. As shown in Table 1, it characterizes many countries in Europe and Latin America. It is also present in Africa and Asia. While the language used in the national constitutions differs, the state’s task to protect competition is usually formulated unequivocally. Constitutions specify that a state has a duty to (or shall) protect competition. Colombia and Portugal serve as examples here. It is also common that national constitutions specify that restriction of competition shall be abolished by statute. In other words, the lawmaker is under a constitutional duty to pass legislation prohibiting practices restricting competition. Brazil, Croatia, Denmark, Lithuania, and Switzerland serve as examples in this respect. However, in some cases, the national constitution merely empowers (rather than obliges) a lawmaker to pass laws protecting competition. Austria, Italy, Korea, and Pakistan serve as examples here. In the case of the first two countries, the constitution specifies that such a power is reserved to a national parliament rather than a regional one.¹¹⁷ In some instances, a consideration that competition is a state’s task is linked to the idea that market conditions should be equal. The Constitution of Bulgaria provides directly that the ‘state shall establish and guarantee equal legal conditions for economic activity (…) by preventing any abuse of a monopoly status and unfair competition.’¹¹⁸ The Constitution of Croatia imposes on a state a duty to ensure that all entrepreneurs have an equal legal status on the market and a prohibition of monopoly position follows such a duty.¹¹⁹ Similarly, in Ecuador, the state has a duty to protect competition ‘in equal conditions and equal opportunity’.¹²⁰

Fourthly, a principle-oriented approach can be identified: in several countries, the protection of competition is a constitutive element of economic order established by the constitution. In this case, protection of competition can be considered part of the substantial economic constitution (within the meaning discussed in Section 2) already specified at the level of the national constitution. In Brazil ‘free competition’ is a principle the economic order needs to observe to pursue a goal of ‘assuring everyone dignified existence according to dictates of social justice’.¹²¹ In Armenia, the economic order is described as a ‘social market economy’ and ‘free economic competition’ is one of its foundations.¹²² Other elements include private property, freedom of economic activity, and state policy aimed at general economic well-being and social justice. In Romania, the ‘social’ aspect of the economic order is not mentioned. The Constitution states that ‘the economy of Romania is a free market economy, based on free enterprise and competition’.¹²³ Similar provision can be found in the Constitution of Moldova.¹²⁴ In Egypt, the economic system is committed, among others, to preventing monopolistic practices.¹²⁵

While direct constitutional regulation of the protection of competition is of legal significance, one should not regard constitutions that do not contain such provisions as lacking direct relevance for competition law. India and Ireland are confirmations in this respect. Part IV of the Constitution of India¹²⁶ formulates the Directive Principles of State Policy in social and economic fields. Essentially, these principles aim to promote people’s welfare as well as equality in these areas.¹²⁷ Section 39 lists policies the state needs to implement (state’s duties). They cover policies with respect to gender equality, distribution of resources, work conditions and treatment of children as well as policy ‘that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment’. Therefore, the adoption and enforcement of competition law can be perceived as a fulfilment of such a constitutional duty. The same can be said about Ireland, as its Constitution¹²⁸ obliges the state to curb the excesses to which competition may lead.¹²⁹

Overall, the place of protection of competition in the constitutional system and its relationship to other values protected by constitutions can be identified by studying various constitutional provisions and the pertinent case law. Among other factors, the way in which the economic order is determined in national constitution and interpreted in the case law plays a significant role. In addition, in countries where protection of competition could be considered as a realization of individual economic freedoms (such as freedom of enterprise), one might rely on proportionality clause to decide on possible values’ conflict. In particular, economic freedom could be subject to limitation in order to promote other constitutional values (such as social welfare or environmental protection). As a result, the extent of protection of competitive markets would vary accordingly. Another closely related factor concerns the degree of protection of economic freedoms associated with a free-market economy (particularly, freedom of economic activity) and the extent of protection of socio-economic rights. Arguably, in countries where constitutional protection of socio-economic rights is broad in scope and precise, greater limits may be imposed on the functioning of a free market economy, which may, in turn, affect the scope of protection of competitive markets. In the next section, the analysis of South Africa and Poland aims to shed more light on this matter.

4. POLAND AND SOUTH AFRICA: CASE STUDIES OF INTERRELATION BETWEEN CONSTITUTIONAL VALUES AND COMPETITION LAWS

Against the findings concerning constitutional regulation of competition worldwide, this section undertakes an examination of the legal systems of Poland and South Africa. First, it aims at answering questions about the scope of constitutional regulation of competitive markets and how socio-economic and environmental values are protected in their respective national constitutions. Secondly, their competition laws are subject to analysis. It aims to explain the extent of protection of constitutionally enshrined socio-economic and environmental values within competition law.

The selection of Poland and South Africa for the analysis is based on a set of criteria, including: the codified character of their constitutions; the existence of constitutional review; the existence of developed case law on both the constitutional and competition law sides as well as the existence of a workable competition law system. Such a selection offers a possibility to discuss the experiences of the biggest Central-Eastern European country, whose competition law was modelled after EU law, and South Africa, a Global South country that developed its own distinct competition law system.

Constitutional law of Poland and South Africa

An analysis of the South African and Polish constitutions is instrumental in understanding how these constitutions address three sets of values relevant to the ‘just transition’ context introduced in Section 1 of this article: that is, pro-market values (related to the protection of competition), socio-economic values, and environmental values. These values provide the axiological context within which competition laws (as lower-rank legislation) of these two countries should be viewed. Additionally, it is essential to consider whether and how these two constitutions determine (and name) their respective national economic systems.

As far as pro-market values are concerned constitutions of both countries provide for the protection of private property, which is a key constitutional right underlying the competition-based market economy. However, they both provide for a legal basis for its limitations under general proportionality clauses.¹³⁰ In addition, they provide a direct basis for expropriation if public interest dictates it, subject to compensation. In the case of South Africa, the transformative nature of the constitutional provision is clearly visible and provides for a broader scope of expropriation compared to Poland. The South African Constitution explains that ‘the public interest includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources’.¹³¹ On top of it, this Constitution provides for a right that is in tension with the right to property. It stipulates that ‘a person or community dispossessed of property after 19 June 1913 as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to restitution of that property or to equitable redress’.¹³²

Protection of freedom of economic activity (freedom of enterprise) is another pro-market element. The Polish Constitution protects it as one of three constitutive elements of the Polish economic system (Article 20) and stipulates that its limitation is permissible only in public interest and by means of statute (Article 22). The South African Constitution, while being rich in socio-economic rights (see below), does not entrench the freedom of economic activity as a constitutive element of the economic system. However, it stipulates that every citizen has the right to choose their trade, occupation or profession freely (section 22), which applies by virtue of section 8(4) also to legal persons. At the same time, the transformative context matters; section 24 provides that everyone has the right to the promotion of ‘justifiable economic and social development’, what interpreted in light of the wording of the Preamble (‘recognise the injustices of our past’ and ‘improve the quality of life of all citizens and free the potential of each person’) suggest a need for a change in the economy in order to reduce inequalities.

As far as the economic system is concerned, the Polish Constitution names the Polish economic system as a social market economy (Article 20). While its market character is based on Article 20 on the protection of freedom of economic activity and private property, its social aspect is linked to the solidarity, the cooperation, and the dialogue between social partners. Moreover, the social element of the economic system described in Article 20 of the Polish Constitution presumes the need for the existence of corrective mechanisms to mitigate the negative social and environmental consequences of the functioning of markets.¹³³ By contrast, the South African Constitution does not commit the state to a specific economic system. However, the overarching goal of substantive equality, dignity and freedom,¹³⁴ along with far-reaching constitutional entrenchment of socio-economic rights, sets the direction for the evolution of the economic system in South Africa.

Finally, neither of the two constitutions imposes directly on the state a task to protect competition nor does it establish directly the right to a competitive marketplace. Still, in the case of Poland, scholars put forward the interpretation under which protection of competition is a necessary precondition for the realization of (constitutionally protected) freedom of economic activity.¹³⁵ In addition, protection of competition indirectly serves the state’s task to protect consumers (Article 76).¹³⁶ Conversely, the South African Constitution seems to offer more limited space for considering market competition as a constitutionally enshrined value.

As far as socio-economic values are concerned, both constitutions contain a rich catalogue of socio-economic rights. They include the right to education, healthcare, and social security. The South African Constitution safeguards rights which are not mentioned in the Polish Constitution, including the right to fair labour practices, adequate housing, sufficient food, and water. Such a rich list of rights has been used by the South African Constitutional Court to safeguard a broad catalogue of socio-economic rights in its case law and to justify interventionist measures or affirmative actions, for example in order to reduce inequality in South Africa.¹³⁷ The list of socio-economic rights mentioned in the Polish Constitution is narrower, and the extent of their protection is often left to be regulated by the parliament through statutes. Additionally, in some areas, the Constitution opts to impose on the Polish state the task of implementing certain policies (such as combating unemployment) rather than enshrining judicially enforceable rights. This approach corresponds to more market-oriented character of the Polish Constitution.

As far as environmental values are concerned, both constitutions protect the environment for the benefit of future generations. The Polish Constitution establishes the principle of sustainable development (Article 5), while the South African Constitution links environmental protection with economic development and calls for a balance between the two. Under section 24(b)(iii), the measures implemented by the state to protect the environment need to ‘secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development’. Both constitutions also mandate the protection of the environment. The Polish Constitution imposes on the state an obligation to protect the environment (Article 74(2)) and to safeguard ecological security for the benefit of contemporary and future generations (Article 74(1)). It also allows for the limitation of individual rights and freedoms if the protection of the environment so requires (Article 31(3)). On top of it, it establishes a citizen’s right to information about the state of protection of the environment (Article 74(3)). The South African Constitution goes further, mandating not only the state’s obligation to protect the environment (section 24(b)) but also establishing everyone’s right to an environment that is not harmful to health or well-being (section 24(a)).

Overall, the texts of both constitutions encompass all three types of values that are essential in the context of a just transition, introduced in section 1, that is pro-market values, socio-economic values, and environmental values. However, significant differences can be observed. The Polish Constitution strikes the balance in favour of market values, providing for a more limited protection of socio-economic and environmental ones. Conversely, the South African Constitution attaches greater importance to the protection of socio-economic rights and actively promotes substantive economic equality. This constitutional choice can be viewed as a source of guidelines on how to shape economic order at the sub-constitutional statutory level.

The interpretation of the constitutional provisions presented above can be illustrated by two constitutional courts’ rulings: a South African one in a hospital merger case and a Polish one concerning the constitutionality of a statute that prohibits the collection of slotting fees by supermarkets.

We begin with South Africa. As explained earlier, while the South African Constitution does not explicitly mention the protection of competition, it is rich in socio-economic rights. This constitutional context plays a direct role in the interpretation of the South African Competition Act and informs the direction of its application.¹³⁸ The judgment of the South African Constitutional Court of 15 October 2021 in Mediclinic, which was already mentioned in the Introduction, is a confirmation in this respect.¹³⁹ While acknowledging the importance of competitive markets, the Constitutional Court held that the application of competition law should serve the protection of fundamental rights enshrined in the South African Constitution. In this case, the crucial question concerned the effects of a merger on the hospital market for uninsured patients (which are generally the indigent and vulnerable patients), particularly the effects this merger (expected increase of prices of medical services) will have on their fundamental right to access healthcare, as enshrined in section 27 of the South African Constitution. The merger was prohibited by the Competition Tribunal, which held that it would significantly affect uninsured patients by raising the prices of the services.¹⁴⁰ However, on appeal, the Competition Appeal Court determined that competition in this market would not be substantially affected¹⁴¹ but having in mind a constitutional right to healthcare, it granted a conditional approval of the merger to mitigate any potential harm to uninsured patients’ constitutional rights. The case was appealed to the Constitutional Court, which viewed the application of competition law as part of the constitutional obligation of the state to protect human rights, including the right to access to health care. The majority opinion pointed out that ‘maintaining or increasing the scope for choice of essential and much-needed services with particular regard to the plight of the financially under-resourced or the vulnerable, should always be at the back of the decision-makers’ minds when dealing with mergers’.¹⁴² An important part of the judgment addressed the institutional setting within which the merger’s effects on competition and socio-economic rights should be assessed. The majority held that the assessment of an expert, independent institution with extensive experience in balancing the economic and social goals of South African competition law, that is, the Competition Tribunal, should be respected unless a manifest error in assessment was made. As a result, the Constitutional Court set aside the judgment of the Competition Appeal Court to allow the merger. While the accuracy of the Constitutional Court’s ruling may be subject to disagreement,¹⁴³ the case clearly illustrates the relevance of constitutional values in the interpretation and application of competition law in South Africa.

In Poland, the protection of freedom of economic activity is safeguarded by Article 20 of the Constitution, which establishes it as an element of the social market economy. According to Article 22 any limitation of this freedom must be justified by an overriding public interest. The case in question (ie, the case SK 20/12) concerned the constitutionality of the abuse of dominance-inspired provision of the Polish Unfair Competition Act of 1993, ie, its Article 15(1). This provision prohibits the impediment of market access by means of collection of fees for acceptance of goods for sale (in practice, slotting fees collected by supermarkets from their suppliers). In its judgement, the Constitutional Court found Article 15(1) to be in accordance with the Constitution on condition that it is interpreted restrictively, that is in a way that does not impose far-reaching restrictions on freedom of economic activity. As a result of such an interpretation, it became more difficult for the suppliers to prove that their market access has been limited as a result of the collection of slotting fees: a supplier needs to demonstrate that an impediment occurred and that the fees collected by a supermarket were not economically equivalent to the additional services provided to suppliers in exchange for those fees.¹⁴⁴ Accordingly, the protection of the weaker side of the transaction (ie, a supplier) turned out to be more limited than what the textual interpretation of Article 15 would suggest.

Such an interpretation posits a constitutional protection of competition in Poland in different light than that in the South African ruling in the Mediclinic case. Indeed, the judgment of the Polish Constitutional Court in case SK 20/12 upholds earlier constitutional case law that narrowly construes the grounds justifying the limitations of freedom of economic activity.¹⁴⁵ In case SK 20/12, the Constitutional Court limited such grounds to those listed in the general proportionality clause (Article 31(3) of the Constitution), despite the fact that the specific provision regulating the proportionality of limitation on freedom of economic activity (ie, Article 22) does not contain, as Article 31(3) does, a closed list of limitation grounds, instead using an open clause based on the unspecified notion of ‘public interest’.¹⁴⁶ Arguably, this approach does not allow for what Article 22 of the Constitution actually aims to achieve: greater flexibility for a lawmaker to impose limitations on freedom of economic activity compared to other rights and freedoms.

While further comprehensive study of constitutional case law in Poland and South Africa is warranted, the two cases suggest that the broader normative content of national constitutions (whether more pro-market or pro-socially inclined) is of relevance in practice and may influence the scope of protection of competitive markets vis-à-vis socio-economic and environmental values. In Poland, in case SK 20/12, the Constitutional Court relied on its earlier case law which considered freedom of economic activity as a high-rank constitutional freedom. As a result, it interpreted the scope of its permissible limitations narrowly, despite the text of the Constitution allowing for a broader interpretation. In contrast, in the Mediclinic case, a deep constitutional entrenchment of socio-economic rights led to the interpretation of competition law in their light. In any event, the analysis suggests that a study of national constitutions can prove helpful in connecting the protection of competitive markets with socio-economic and environmental values.

Constitutional values in competition laws of Poland and South Africa

Since sub-constitutional legislation must normally conform to national constitutions and be interpreted in their light, it is essential to consider whether and how competition laws of Poland and South Africa integrate constitutional axiology and what importance they attach to socio-economic and environmental values.

In Poland, the question of the goals of competition law and the extent to which they encompass socio-economic and environmental values is linked to the interpretation of the notion of public interest, as stated in Article 1 of the Polish Competition Act of 2007. This provision specifies that protection of competition is undertaken ‘in the public interest’.¹⁴⁷ The case law indicates that the concept of public interest in competition law serves two primary roles: jurisdictional and evaluative. The jurisdictional role restricts the potential reach of the competition authority's intervention by requiring it to specify which public interest warranted the intervention concerning the specific practice in each situation. In simpler terms, any antitrust intervention intended to protect competition must aim at a public interest rather than a private one. Conversely, the evaluative role of public interest affects how competition rules are applied. This is connected to the idea that public interest can be interpreted as a broad and adaptable concept, facilitating clarification of the actual reach of competition laws. Indeed, across the 1990s and 2000s the case law in Poland concerning the goals of Polish competition law gradually evolved moving from the protection of the competitive process towards consumer welfare in line with ‘more economic approach’ postulated at that time.¹⁴⁸ Still, a complete shift never materialized.¹⁴⁹ Arguably, the constitutional delimitation of the economic system as a social market economy and the fact that the Polish Constitution attaches great importance to the protection of freedom of economic activity (rather than efficient economic outcomes) provided a boundary beyond which interpretation of competition law could not go. The Supreme Court judgment of 2018 rejecting the Warsaw Appeal Court’s non-interventionist, Chicago school inspired interpretation of provisions prohibiting the abuse of dominant position is a good illustration in this respect.¹⁵⁰ Indeed, the Supreme Court found that such an interpretation does not conform to the values of the Polish constitutional economic model. According to the Supreme Court, law—including competition law—serves as a mechanism for designing economic and social interactions in line with a specific vision articulated in the national constitution. Therefore, the determination made by the U.S. Supreme Court is neither suitable nor automatically transferable to a different constitutional framework. In light of this judgment, the social market economy axiology of the Polish Constitution sets the boundaries within which the goals of Polish competition law can be construed.

Still, if we move beyond the economic goals of Polish competition law (be it competitive process or consumer welfare), it is unclear whether Polish competition law can be said to integrate socio-economic and environmental values. One view expressed in 2008 is that ‘neither the subject matter of Polish competition law nor the wording of its substantive provisions support[s] the consideration of non-economic arguments when declaring a certain conduct as anticompetitive or when justifying it’.¹⁵¹ However, prior to 2008, there were cases in which the courts saw the application of competition law in the public interest from a broader perspective, not limited to narrow economic goals. One instance involved the assessment of farmers’ protests against a pricing policy as an indication of conduct violating competition.¹⁵² In another case, restrictive practices adopted by the incumbent Polish telecom operator were seen as positive due to improvements to network coverage in Poland.¹⁵³

There are also more recent cases that demonstrate that Polish courts recognise the inclusion of interests beyond the promotion of consumer welfare within the scope of competition law.

In cases of market dominance, courts have adopted a relatively expansive interpretation of the term public interest. Courts assert that the infringement of public interest must be evaluated from a ‘broader perspective’, considering all adverse effects of a dominant firm’s conduct on a specific market.¹⁵⁴ In certain instances, this may appear to allow for the incorporation of non-competition factors into the conceptual framework of public interest.¹⁵⁵ However, in its judgment of 16 October 2008, the Supreme Court clarified the meaning of ‘broader perspective’.¹⁵⁶ It elucidated that the term ‘broader perspective’ ought to be understood within the framework of the traditional objectives of competition law.¹⁵⁷ In light of that determination, public interest is, for instance, compromised when the conduct influences the quantity, quality, pricing of goods, or the range of choices accessible to consumers.

The Supreme Court adopted a different approach in a decision of 27 November 2014.¹⁵⁸ The Supreme Court determined that the capacity to reconcile various values is contingent upon the specific framework of the Polish Competition Act. It noted that legislators occasionally constrain the extent of applicability of Polish competition legislation.¹⁵⁹ The application of the Competition Act is also excluded in relation to restrictions of competition allowed under other legal acts.¹⁶⁰ Furthermore, as articulated by the Supreme Court, non-competition considerations may be factored in during a thorough case-specific examination to ascertain whether the restriction of competition amounting to an abuse of dominant position can be objectively justified.¹⁶¹ Moreover, according to the Supreme Court ‘the consideration of other values that may interfere with competition protection may also affect the applicability of the premises provided in the Competition Act which justify an exemption from the prohibition of competition restricting agreements.’¹⁶² This assertion applies also to imposition of fines.¹⁶³

Another notable Polish case in which non-competition interests were evaluated, pertains to the resolution of the Polish Chamber of Physicians and Dentists (hereinafter referred to as ‘NIL’) to enact a ban on homoeopathic products in Poland and prohibit physicians from prescribing them. In 2011, the Polish competition authority (hereinafter referred to as ‘UOKiK’) found that NIL violated competition law by restricting consumer choice.¹⁶⁴ The decision was based on a pure competition grounds, and a question related to the actual impact of homoepathic products on health was not subject to analysis.¹⁶⁵ The review court, that is, the Competition Court in Warsaw annulled the UOKiK decision.¹⁶⁶ According to the Court, the UOKiK failed to act in the public interest. The Competition Court examined the effects of the NIL resolution and asserted that the beneficial outcomes of competition within the health services sector are reflected in patients' rights to receive treatment aligned with contemporary medical knowledge, rather than in the entitlement to be treated with any legal products, including those lacking therapeutic efficacy. The Court regarded the right to health, safeguarded by the Polish Constitution, as an overriding interest. It determined that the NIL appropriately prohibited homoeopathic products due to their potential negative impact on health. It concluded that allowing competition to be the primary influence in the health services market would be unacceptable.¹⁶⁷

The Competition Court's ruling in the homoeopathic case drew criticism from proponents of a more economic-oriented approach in Polish competition law.¹⁶⁸ Nevertheless, interpreting Article 1 of Polish Competition Act through the lens of constitutional values suggests that such an approach should not be outright dismissed. Instead, it is the framework within which the analysis was conducted that requires further refinement. Firstly, the Competition Court failed to articulate the legal basis for weighing the values associated with competition protection against those related to public health. This was a restrictive agreement case, and the court could have explored, in line with the Supreme Court's previously mentioned suggestion, whether public health considerations might fall under the individual exemption to anticompetitive agreements. Secondly, the Court did not opt to apply the Wouters-like proportionality test.¹⁶⁹ If the court was convinced that the NIL policy supported public health (as it was ancillary to the achievement of such a legitimate interest), it might have evaluated whether public health could be safeguarded through less restrictive alternatives (i.e., other than an outright ban on homoeopathic products).

Overall, the relationship between Polish competition law and constitutional axiology is complex. The economic oriented interpretation of competition law goals suggests an alignment with the pro-market interpretation of the constitutional provisions. However, considering that the text of the Polish Constitution allows for new, more socio-economic and environmentally friendly interpretations,¹⁷⁰ it can be argued that such a renewed approach could be reflected in a similar interpretation of Polish competition law. In particular, borrowing a term from human rights law,¹⁷¹ the public interest clause provides room for interpreting competition law as a ‘living instrument,’ which would allow for the inclusion of socio-economic and environmental values.

The competition law subsection of this article needs to be completed with the analysis of South Africa. To begin, the link between constitutional values and the text of the Competition Act of 1998 is clear, at least at first sight. The Act’s preamble addresses the economic consequences of apartheid, including the excessive concentration of ownership and control in the national economy and the unjust restrictions on full and free participation in the economy by all South Africans. It calls for the establishment of an ‘efficient, competitive economic environment, balancing the interests of workers, owners and consumers and focused on development’. This is further reflected in section 2 of the Act, which outlines its purposes, identifying ‘efficiency, adaptability and development of the economy’ as key objectives. Moreover, ensuring market access is crucial, as demonstrated by the goal in section 2 which aims to provide small- and middle-sized firms with an ‘equitable opportunity to participate in the economy’. In addition, section 2 mandates that competition law should promote ‘a greater spread of ownership, in particular to historically disadvantaged persons’. This vision of the objectives of competition law aligns with the South African Constitution and suggests an interpretation of competition law that incorporates relevant constitutional values. Indeed, it is underlined that the preamble and the objectives of the South African Competition Act suggest a ‘marriage’ of efficiency and equity,¹⁷² with the latter being reflected in the constitutional provisions discussed above.

While the Competition Act’s Preamble and its section 2 contain rich references to constitutionally relevant socio-economic values, the provisions prohibiting anticompetitive agreements and abuse of dominance do not.¹⁷³ They concentrate on anticompetitive effects and potential pro-competitive gains. Agreements which are not restrictive by their very nature (ie, cartels and RPMs) are prohibited if they produce anticompetitive effects and parties fail to demonstrate that these effects are outweighed by any technological, efficiency or other pro-competitive gain resulting from the agreement at stake (sections 4 and 5 of the Competition Act). Abuse of dominance is prohibited with respect to the practices of dominant firms listed in section 8 of the Competition Act.¹⁷⁴ Both exploitative practices, such as excessive pricing, and exclusionary practices, such as refusal to deal or predatory pricing, are prohibited. However, similar to anti-competitive agreements, a dominant firm is entitled to raise a defence based on technological, efficiency, or other pro-competitive gains resulting from the practice in question. This raises the question of whether, under such a legal framework, socio-economic values have been considered in the enforcement of these provisions through a pro-constitutional interpretation. While this article does not aim to provide a comprehensive answer to this question, the existing analysis indicates that such an interpretation may often face challenges in court, particularly when there is insufficient economic analysis of the anticompetitive characteristics of the practice at issue.¹⁷⁵ This seems especially true in light of the case law of the second-instance Competition Appeal Court.¹⁷⁶ In other words, the South African experience suggests that a mismatch between the constitutional values infused in the Competition Act’s objectives and the specific provisions concerning anticompetitive practices may have practical consequences.

A somewhat different story can be told in the case of mergers. Under section 12A of the South African Competition Act, a merger that is likely to substantially prevent or lessen competition can still be allowed if the pro-competitive gains are greater than its anticompetitive effects or if it can be justified on public interest grounds. These public interest grounds include its effect on a particular industrial sector or region, employment, the ability of small businesses or firms controlled by historically disadvantaged persons to become competitive, the ability of national industries to compete internationally and ‘the promotion of a greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons and workers in firms in the market’. In other words, a merger should be prohibited when it is anti-competitive and when sufficient pro-competitive or public-interest justifications are missing. Additionally, a merger can be prohibited solely on public interest grounds, even if its anticompetitive effects are not significant enough to warrant prohibition. In this respect, South African competition law provides a greater role for constitutionally relevant socio-economic values compared to its Polish counterpart, which only permits using non-competition grounds (such as economic development, technical progress or a positive impact on the national economy) to justify allowing the anticompetitive merger (and not to ban it).¹⁷⁷

The regulation of mergers in South Africa, where socio-economic grounds are directly included in the legal text, has led to a merger review process that provides the actual space for the inclusion of South African constitutional values in the analysis. While this task is not free from controversy,¹⁷⁸ several cases suggest that South African authorities have managed to take the effects of mergers with respect to employment¹⁷⁹ and equal market access¹⁸⁰ into account.¹⁸¹ Conditional clearance of Walmart’s acquisition of Massmart is the best-known example, as the merger did not raise any significant competition concerns; however the clearance was subject to several conditions aimed at safeguarding equal market access and job opportunities.¹⁸² The Mediclinic case discussed above is an example of the case in which access to healthcare played a key role.

Finally, one needs to take into account that the promotion of constitutional values can take place by means of adequate priority setting with respect to competition authorities’ enforcement.¹⁸³ For example, cartel investigations concerning prices or access to basic goods such as food are of key importance. The enforcement in South Africa resonates here very well.¹⁸⁴ In addition, the results of market inquiries can be used as a tool for social inclusion, including digital inclusion. In 2020, the South African Competition Commission reached a consent agreement with Vodacom to reduce the process of mobile data transfers by 34 per cent, which was a result of an earlier market inquiry concerning internet access.¹⁸⁵ The Commission underlined that the customers that buy the lowest volumes of data, which are typically the poorest customers, will see the greatest benefit from these price decreases.¹⁸⁶ In its statement, the Commission referred directly to the constitutional values by citing Nelson Mandela’s statement that ‘the long-term stability of our democratic order is also dependent upon all sectors of the population participating meaningfully at all levels of the economy.’¹⁸⁷ It cautioned against the gap between digitally empowered citizens and those digitally marginalized, and underlined the need for digital inclusion.¹⁸⁸

5. CONCLUSIONS

The analysis presented in this article suggests that rediscovering the constitutional dimension of competition law is a valuable exercise both in general and specifically in the context of ‘just transition’ to a carbon-neutral economy. Indeed, the constitutions of the two jurisdictions chosen for a closer study, namely Poland and South Africa, protect various sets of values including socio-economic and environmental ones. While the protection of competitive markets remains a key function of competition laws of these countries, interpreting these laws in light of constitutional socio-economic and environmental values can aid in designing competition law to better reflect this constitutional axiology. To be sure, both the constitutional and competition laws of Poland and South Africa differ, creating varied spaces for the inclusion of socio-economic and environmental values into competition law analysis. The South African legal order is more straightforward in this regard, as the preamble to Competition Act is designed in line with the constitutional socio-economic values and its provisions provide a space, in particular in the merger field, to incorporate these values in the decision-making. This is not to say that it is a task without challenges and controversies.¹⁸⁹ However, the belief that competition law can be effectively single-goal oriented appears to be misguided.¹⁹⁰ Therefore, one might consider a development of a legal framework governing the interaction between different sets of values within competition law.

Against such a backdrop, the findings concerning Poland indicate that such an approach is indeed feasible. While the Polish constitutional case law appears to align with the pro-market paradigm characteristic of Poland's transformation from a centrally planned economy to a free market economy in the 1990s, the text of the Polish Constitution provides a space for such an interpretation of economy-relevant laws that would open them to socio-economic and environmental values. In fact, Polish competition law case law demonstrates some willingness of courts to incorporate various constitutional values. Therefore, the evolution of the interpretation of competition law in Poland is possible.

Another question is whether the findings of the relevance of constitutional values in competition law in Poland and South Africa may be true for other countries. This is not a straightforward question, as national constitutions are far more divergent from one another than national competition laws usually are. Nevertheless, the fact that all 52 national constitutions identified in this article that explicitly enshrine the protection of competition simultaneously safeguard socio-economic and environmental values suggests that the two analyzed countries are not outliers. Therefore, further studies on constitutional values in competition law are necessary. In particular, the normative relevance of constitutional values within competition law is likely to differ depending on the approach to the regulation of the protection of competition at the constitutional level (ie, whether it is right-oriented, prohibition-oriented, task-oriented, or principle-oriented, as discussed in Section 3 of this article). Furthermore, in countries where constitutional protection of socio-economic rights is broad in scope and precise, greater limits on the functioning of a free market economy are likely to be permissible. This may, in turn, affect the scope of protection of competitive markets. Additionally, when considering supranational regional legal orders—especially the most advanced one, namely the EU legal order—it may become more straightforward to incorporate socio-economic and environmental values within competition laws of member states of such regional orders. Indeed, in the EU, its Single Market shall work for sustainable economic development of Europe based, among others, on competitive social market economy and aiming at social progress and a high level of protection and improvement of the quality of the environment (Article 3(3) TEU). This is a framework in line with the ‘just transition’ concept introduced in Section 1 of this article.

Finally, further research is necessary to identify the factors that inhibit in practice the implementation of constitutional values within competition law. Of particular importance is the question of the institutional and procedural setting within which competition law is enforced. For instance, the scope of participation of third parties in competition proceedings and the intensity of judicial review may prove important in this respect. Additionally, the specific substantive choices regarding how to integrate socio-economic and environmental values into competition law analysis need to be examined in detail. This includes a question of balancing these values when they conflict. Arguably, the choices made in respective national constitutions may provide guidance on which types of values should be given a priority in a specific case. Furthermore, the experience of constitutional courts in balancing different sets of values under proportionality clauses may serve as a source of inspiration for a similar exercise in competition law.

Footnotes

Acknowledgements

The author expresses gratitude to Joanna Mazur and Michał Ziółkowski for their contributions to developing the research agenda presented in this article, to Liat Davis, Eleanor Fox, Dawid Miąsik, and the anonymous reviewer for their feedback on the draft version of this article. Additionally, thanks are extended to Agastya Shukla and Marta Sznajder for their research assistance. The themes discussed in this article were presented at the ASCOLA 2023 Annual Conference in Athens, the Workshop titled ‘Competition Law in Service of Democracy’ held at the University of Oxford on 7 March 2024 and at the Symposium ‘Role of Competition Law in Economic Transitions’ at the University of Warsaw on 6 June 2024. The author appreciates all comments received. This article was prepared as part of the project ‘Competition Law Through Constitutional Lenses: Integrating Socio-Economic and Environmental Values in a Time of Just Transition’ funded by the National Science Centre, Poland, 2023/50/E/HS5/00482. In accordance with the ASCOLA Declaration of Ethics, no conflict of interest is declared.