“equal and open access to the market in terms of economic integration and increased competition...
TRANSCRIPT
“Equal and open access to the market in terms of economic integration and increased
competition ”Astana Forum, 24 May 2013
Presented by Hassan Qaqaya, Head Competition law and Consumer policies, UNCTAD
Competition policy and competition law are an integral part of good economic governance
• They provide an efficient regulatory framework and practices;
• Promote creation of a viable market economy capable of competition on its own in global markets;
• Provides a link between good corporate governance and a competitive market economy.
The fundamental goals of competition policy and law are
– End-user prices to be at efficient price level
– An optimal level of service quality and variety;
– High level of productive efficiency;
– High level of investment and innovation
The fundamental goals of competition policy and law are
• Effective and flexible regulation can contribute to economic growth and development;
• Government retains a strong role in the provision of services in the public interest, even when they are market-based and apply competition neutrality;
• Competition law and policy are necessary for sustainability and success of long term competitiveness.
• .
Tension between goals of competition policy and law
• Limiting competition to avoid political costs may be wise in short-run, but undermines the working of markets and sustainability of investment in the L-R;
• For a small open economy, a workable competition demands a balance between the degree of concentration and level of inter-firm rivalry;
• Concentration may bring investment but it may not, in itself stimulate competition ..
A properly enforced competition law is likely to:
• benefit efficient small firms, and
contribute to the expansion of the small business sector of the economy as a whole.
Examples of various features of competition law that can be beneficial to small firms:
Prohibition of unwarranted price discrimination;
Prohibition of abuse of dominant market power;
Prohibition of unwarranted exclusionary conduct.
For some small business co-operation agreements
joint research and development, the sharing of training facilities, the diffusion of technology, the use of joint transport facilities, and joint advertising (except of uniform prices)
public benefits are evident and the anti-competitive effects are usually small.
• .
Provisions in competition legislation aimed at assisting small businesses
To ensure:• Availability of adequate information—scope of
contract/risks involved• Large firms don’t take unfair advantage of their
greater bargaining strength• Large firms are penalised for “unconscionable
conduct”• To review lack of juridiction;.
Provisions in competition legislation aimed at assisting large businesses
• The greater the number of sector regulators the more costly it is for diversified business to comply with rules;
• A general applicable competition law would ensure fairness, transparency and equal treatment for all sectors ;
• Large transnational corporation may negate the benefits of trade liberalisation by engaging in private restrictive practices.
Examples of various features of competition law that can be beneficial to large firms:
Prohibition of export cartels which affect domestic exporters;
Prohibition of anti-competitive cross border M&A which adversely affect competition in the domestic market;
Prohibition of exclusionary effects of
international hard core cartels.
Effective implementation of the competition rules
• The competition agency and the courts as part of the legal system to protect private and public rights;
• Respects due process and prevents arbitrary decisions;
• Contibutes to legal certainty about conducting business;
• Enforces the competition law in fair and transparent maners;
• Strike a balance between conflicting interest groups
The role of judicial review
• To review procedural failure;• Error of law;• Defective reasons;• Manifest error of appreciation;• Error of fact including standard of proof.
Concluding remarks
• Many Business executives regard competition as a mean to an end where the end is the developement of monopoly power and not having to worry about competition in the market;
• Strategies used to implement such goals can include: unwarranted discrimination, exclusionary conduct, collusive conduct, predatory pricing,bid-rigging etc;
• Competition is a mechanism for securing the efficient use of use of society s scarce resources and achieving optimum consumer welfare;
Concluding remarks…
– An antithesis of competition is a situation of market power where a firm can act independently of competitors;
– Such a situation may lead to barring entry to or forcing competition out of markets;
– Thereby eliminating potential improvements in the standards of competition in the market.
Concluding remarks
The role of competition rules is therefore to encourage market competition through:
– independent inter firm rivalry,
– And adopting competition neutrality between private and public enterprises-
Thank you for your kind attention
www.unctad.org/competition