More competition advocacy needed in government, officials from several countries say

28 March 2018 5:25pm

21 March 2018. By Leah Nylen.

As more countries consider pulling back from free trade and globalization, competition agencies need to engage in greater advocacy within their respective governments instead of focusing on simply promoting competition in the private sector, current and former officials from Australia, Singapore, Mexico and the US say.

“We talk about cartels, we talk about merger controls, we talk about behavioral conduct concerns. But all of those same problems can take place if a government regulation is causing the same competitive problem [in] a market. We can’t necessarily bring an enforcement action to stop that,” US Federal Trade Commission Acting Chairman Maureen Ohlhausen said at a conference* in New Delhi today. “We, as competition enforcers, can’t go in and change the law, but can put a human face on the issue for other parts of the government who can then go out and change these laws.”

Allen Fels, who served as the first chairman of the Australian Competition & Consumer Commission from its founding in 1995 to 2003, said competition agencies frequently strove to be independent and free of the influence of the rest of the government. That independence, although useful for enforcement, could be a detriment to effective advocacy.

“Competition agencies are typically on the outer fringes of government, enjoying their independence and separation," Fels said. "They are not at the heart of government. They are usually not involved or little involved when governments come to make decisions that harm competition. We here need to rethink what is to be done about government restrictions on competition, not abandon our advocacy but recognize its limitations, and explore and study what further needs to be done.”

In Singapore, for instance, the competition agency takes part in discussions with other economy regulators to build relationships and discuss regulation in emerging areas such as drones and fintech, according to its chair, Toh Han Li.

“The question for us to think about seriously is: 'Should we remain at the outer fringes because of independence or should we be part of the government policymaking mechanism but coming from the point of view of good competition policy?' I come out on the latter view,” Toh said. “You can be independent at the same time you can be trusted to do your job by the government. We can build trust with government on what we can do, and what we can do well is competition.”

Mexico’s competition authority, the Federal Economic Competition Commission has taken a new approach to competition advocacy within government, creating a government-wide competition policy agenda that includes suggestions on how to improve policymaking and 16 specific industry regulations that should be changed or eliminated, said its president, Alejandra Palacios Prieto. The commission is sending its recommendations to presidential candidates ahead of the general election this July, Palacios said.

“I think it’s a relatively novel advocacy effort. It’s different from what agencies normally do,” she said. “We wanted competition to be part of the public discussion in public campaigns.”

*International Competition Network Annual Conference 2018. March 21-23, 2018. New Delhi, India

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