The offshoots of privatization of the space race: Need for an International Antitrust Regime

In June 2019, Jeff Bezos, the founder of Amazon, talked about the expansive realms of humanity in outer space. Having recently developed Blue Origin, a privately held rocket-launch firm, he talked of the endless business opportunities that outer space has to offer in the next decade. The basic requirement, in his view, however, was a well-designed legal environment to prevent any tussle between business interests and humanity’s thrust for resources in space.

The need for international space law to evolve, in consonance with the dynamic space race, has become the need of the hour. To that effect, the importance of antitrust laws, and the requisite antitrust laws( with special reference to the United States of America, Russia and India) which could prove to be a boon for outer space conservation vis-a-vis the promotion and upliftment of the global entrepreneurial and State interests have been discussed here.

Historical Background of the Space Race

A cursive glance through the pages of the post World War II period would reveal the push for ascendancy by Russia and the United States of America, towards their goal of being a superpower. In 1957, Russia (the erstwhile USSR) launched Sputnik into space. In early 1958, the USA followed closely with a launch of its first satellite, along with setting up the National Aeronautics and Space Administration (NASA).  In April, 1961, Russia launched the first human into space, and the USA followed suit exactly a month after that. However, the USA takes the bragging rights for arguably the most publicised moment of mankind in its exploration of space- on July 20, 1969, Neil Armstrong, along with his team, landed on the Moon. The ‘50s and the ‘60s have given us such watershed moments galore.

The International Law Perspective

The quintessential law in place to govern space exploration is the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space (generally referred to as the “Outer Space Treaty” or “OST”). The Outer Space Treaty seeks to orchestrate the role of international law in the balance of resource management in space.

Another important piece of legislation in this regard is the Agreement Governing the Activity of States on the Moon and Other Celestial Bodies (the “Moon Treaty”). Even though signature for the Moon Treaty had been opened in 1979, there are only eleven signatories to this date. No country which is presently harnessing the benefits of manned space explorations and partaking in a competitive space race has ratified the agreement. One of the key objectives behind the introduction of the Moon Treaty was to fine tune a glaring chink in the Outer Space Treaty, by incorporating the idea of “banning any ownership of any extraterrestrial property by any organization or [private] person, unless that organization is international and governmental.” Like a host of other international law instruments, the Moon Treaty is not mandatory for countries to adhere to. If it’s motives were ideally realized, the aspect of privatization in the field of space race could have had chilling effects. As of now, it finds itself perpetuating in uncertainty.

Antitrust Laws in the United States, Russia and India

The raison d etre behind the popularity of antitrust laws stems from the fact that it preserves the integrity and institutionalisation of private competition. If antitrust laws were to perform in full flow, start-ups would be encouraged and such a free flowing market would in turn hand the advantage of economies of scale to the known market players as well. Governments need to bolster an antitrust law framework to cut down on predatory practices, black marketing and restrictive trade practices in a globalised, open-ended economy.

Some of the most impressive antitrust laws emanate from the United States, ranging from the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. Antitrust law in the United States has previously been applied in the field of private space explorations as well, with the Federal Trade Commission’s review and approval of the October, 2006 United Launch Alliance deal between Boeing and Lockheed Martin being a major highlight of the regime. In the case of SpaceX v. Boeing, the Supreme Court held that “a firm must take overt action to exercise competition, before it is considered to be a violation of the law” and dismissed SpaceX’s appeal of undue influence on the part of Boeing to prevent their entry into the market.

Russia, on the other hand, uses the Federal Antimonopoly Service to deal with antitrust issues in their country. The 135-FZ Federal Law “On Protection of Competition”, uses the extraterritoriality principle in applying competition laws to transactions and agreements extending beyond, and affecting the territory of Russia. The latest upgrade to the Federal Law saw a reduction of administrative barriers to certain types of transactions.  It ought to be read in consonance with Decree No. 5663-1 of the Russian House of Soviets, which deals with “space activity”, to determine antitrust matters in the area of space explorations and private missions from Russia.

India enacted the Competition Act in 2002 to provide for the establishment of the Competition Commission of India (CCI) to curb anti-competitive practices, and to bridge the individual consumers’ interests with that of trade interests and corporate sustainability. The antitrust regime in India, arguably, is still in its nascent stage. In matters of space exploration, the Indian Space Research Organization (ISRO) has been performing commendably, delivering space missions at lower expenditures in comparison to its American and Russian counterparts. Also, unlike the aforementioned countries, India lacks teeth in matters of an extensive piece of legislation for its native space missions.

The general apathy requires a systematic overhaul. On account of holistic globalization, “…cooperation is fundamentally important to competition in today’s competitive and shrinking world.” Varying provisos relating to antitrust, differing from country to country can be a cause of concern. In F. Hoffman La-Roche Ltd. v. Empagran S.A., the respondents, appearing before the U.S. Supreme Court, had mulled over the viability of an international competition law, to bridge the differences in matters of extraterrestrial jurisdiction.

International aw, in its current state, has often posed challenges to space explorations, more so when private parties are involved. This problem is exacerbated by the lack of incentives and resource mobilisation. The need for an international antitrust framework is crucial to invigorate the private players to continue harnessing the spatial resources in a fair manner.

Privatization and the Need for Antitrust Laws

The cost for space exploration activities, whether manned or unmanned, is immense. Restricting the operations merely in the hands of the governmental organizations is detrimental to the spirit of expansion and innovation.  The market for space tourism is avant garde and lucrative, at the same time. An international antitrust law body shall only help smoothen the process of incentivization of such private operations.

Besides, any country which would develop a comprehensive antitrust measure for private space explorations might effectively end up being a model nation for the other States. In the context of this discussion, the United States of America has been most flexible in matters of its antirust policies. Countries like Russia and India and other major players must take the mantle of building a sturdy, regular approach of antitrust correspondence with their space activities.

If private players end up becoming an important component of the space exploration sector, the presence of an international antitrust framework shall not only ensure innovation, but also help prevent patent right violations and patent trolls in space activities. The system needs to be adroit with the constant changes and upgrade itself accordingly.

Conclusion

In a highly technical and financially draining field like space exploration, the prime boost for companies and organizations to operate is one of specific incentives. Albeit, the international law framework has not been welcoming to private persons. It is time for countries to discuss the possibility of an antitrust regime, which is inclusive of space explorations too.  Even though governments represent the “will of the people” and invest heavily in space research and varying degrees of space operations, an effective piece of legislation for antitrust matters relating to space shall grant due confidence to companies as well.


ABOUT THE AUTHOR

Pranoy Goswami

Pranoy

Pranoy is a fourth-year student at National Law University and Judicial Academy, Assam. He is currently engaged as a Research Assistant with the Center for the Study of Law and Culture, Columbia Law School. He has an avid interest in the areas of Intellectual Property, International Humanitarian Laws, Gender Justice Laws and Dispute Resolution. He can be reached at pranoy140@nluassam.ac.in.

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