Multinationals, Inequality, and a Competition Law Response : Lessons From the East India Company

Inequality in different forms has existed throughout history, however, with the passage of time, there is increasing awareness of its human cost even when there is little agreement on the causes of inequality or the strategies that may be adopted to address it. This chapter focuses on factors contributing to the endemic inequality in developing countries, particularly in India and Pakistan, and argues that inequality between countries exacerbates inequality within countries. The chapter begins with the premise that economic inequality between India and Pakistan and their developed counterparts, attracts large multinationals to them. Both countries welcome multinationals for their promise of growth and economic development and encourage them through legislative protections and contractual incentives. The chapter notes, however, that their benefits notwithstanding, these multinationals also have the potential to aggravate and embed pre-existing structural inequalities in these countries by exercising their superior bargaining power. It proposes competition law as an appropriate instrument for creating conditions for checking the damaging practices of multinationals and thereby generating a more equitable distribution of resources not only in India and Pakistan but also all developing host economies, and thereby bolster the relative position of these countries in the global economy