2016/2017 ICN-WBG Competition Advocacy Contest: Winners and Honorable Mentions
THEME 1: Levelling the playing field through competitive neutrality or by elevating competition policy to the economic policy agenda
Embedding competition principles in privatization processes ensures a level playing field. To this end and even in the absence of a formal mandate, the Australia Competition and Consumer Commission (ACCC) advocated for the inclusion of pro-competition measures in the privatization of the ports of Melbourne, Darwin as well as the Utah Point Bulk Handling Facility at Port Hedland. These measures strengthen pricing regimes as well as more transparent and competitive privatization procedures. The advocacy initiative of ACCC reduces the likelihood of monopoly pricing post privatization and ensures continued access to the ports.
Commercial broadcasting services providers in Zambia are requested to program at least 35 percent of local content as a condition for operation. When the Zambia National Broadcasting Corporation --a State Owned Enterprise which controls 92% of the market- and the main commercial broadcasting service provider entered into an exclusive agreement, the Pay for TV market was effectively foreclosed. The Competition Authority of Zambia assessed the impact of eliminating barriers to entry and successfully advocated for an open Pay for TV market. As a result, the agreement was voided and new entrants are now offering similar cable packages at 1/3 of the cost.
Canada (Honorable Mention)
The imposition of an anti-dumping tariff on American drywall in Canada had led to 20-80% rise in prices and reduced availability of the construction material in Western Canada. By appearing as amicus curiae before the Canadian International Trade Tribunal, the Competition Bureau advocated and provided expert advice for the removal of the tariff arguing that American drywall was important to maintain competitive pressure on Canada’s monopolist producer. As a result, the Ministry of Finance agreed to reduce the tariff. This initiative emphasizes the role of competition authorities in tackling anti-competitive effects of trade policies.
The Republic of Latvia (Honorable Mention)
Focusing on a key sector- the waste management services - that affects directly both businesses and consumers, the Competition Council of Latvia identified several competition and regulatory barriers harming competitive neutrality. As a result of this initiative, municipal regulations were amended and relevant stakeholders including municipalities and NGOs have been able to engage in discussions to develop a more competitive waste management market. This initiative also highlights the importance of fostering competition in decision-making of public bodies.
THEME 2: Engaging through results: Successful experience in planning, implementing and monitoring advocacy strategies
Hong Kong (Winner)
Bid rigging in the housing renovation market has increased costs for home owners in Hong Kong. In response to widespread complaints, the Competition Commission of Hong Kong led a multi-faceted campaign to increase detection and reporting of bid rigging. The Commission employed a number of advocacy tools to strengthen procurement and build detection capacity. As a result of a campaign that attracted strong attention among media and consumers, the reporting of bid rigging cartels increased dramatically from less than 5 complaints/inquires a day to 30 at the peak of the campaign.
Key regulatory and competition restrictions challenged the implementation of a competitive environment in the Ukrainian energy sector and limited the European integration of Ukrainian markets. The Ukraine Anti-Monopoly Committee (AMCU) combined analytical work with proactive stakeholder engagement to advocate for a reform package to address regulatory bottlenecks and other barriers to competition. To date, 6 of the reforms have already been implemented resulting in new market players, more transparent regulations and creation of more than 300 jobs.
Netherlands (Honorable Mention)
Port performance and operations is a key driver of the Dutch economy with over 4 billion tons of goods mobilized through the country’s ports every year. To prevent cartel agreements in this sector, the Dutch Authority for Consumer and Markets (ACM) launched a social media campaign to raise awareness of the illegality of cartels and encourage whistle blowers to come forward. AMC combined a number of advocacy tools such as videos, press briefings and even LinkedIn to ‘introduce’ potential whistle blowers to cartel enforcers. As a result, signals and tip offs on cartels rose to 6 times the average on Week 1 of the campaign.
Portugal (Honorable Mention)
Given the large weight of public procurement in the Portuguese economy, bid rigging has the potential to seriously affect public spending. To raise awareness in this sense, the Portuguese Competition Authority launched the first national campaign to fight bid rigging: “Playing Fair isn’t a Secret.” By engaging with contracting authorities, procurement officials and other related entities, the AdC not only provided hands-on training to prevent and eliminate bid rigging but also focused on developing long lasting partnerships with relevant stake holders to encourage future reporting of bid rigging activities.
Theme 3: Reaping digital dividends: Advocacy in e-Trade (digital trade and e-commerce in goods and services)
The electronic payment systems in Argentina was characterized by high concentration, limited innovation and barriers to entry. In order to address such concerns, the National Commission for the Defense of Competition (NCDC) conducted a comprehensive market assessment and identified a number of key policy reforms. The initiative of NCDC resulted in new payment methods - such as mobile payments- being offered by different providers as well as a process of structural changes in the relationships between main stakeholders. The Commission’s intervention is expected to reduce costs to consumers as well as merchants.
A municipal regulation in Madrid established a minimum of 5 nights for tourist accommodation in private homes and apartments, typically offered via web-platforms, to prevent competition with traditional hotels, hostels and commercial apartments. The Spanish National Authority for Market and Competition (CNMC) successfully challenged this anti-competitive regulation. Eliminating this rule had a significant impact on e-commerce in the accommodation market, allowing the entry of at least 6,000 non-hotel establishments, while establishing a precedent for other Autonomous Communities in Spain to void similar anticompetitive restrictions.
Theme 4: Implementing advocacy strategies at multiple levels (regional, national, subnational / economy-wide and sector-specific)
Prior to the Constitutional reform in 2013, Mexico had fully monopolized state controlled gasoline and diesel industries. Upon announcement of the Government’s intention to liberalize the market, the Federal Economic Competition Commission (COFECE) commissioned and published the report “Transition to competitive retail gasoline and diesel markets” in which it identified a number of potential barriers to competition as well as 25 specific policy recommendations. COFECE’s recommendations, such as the elimination of minimum distances between gas stations at the subnational level, are being implemented. This advocacy initiative is helping to smooth the transition from a full monopolized state controlled gasoline industry to an open and competitive market.
Access to water and sanitation is a vital component of everyday life. Persistent competition violations in municipal water and sanitation resulted in 10% of competition enforcement decisions being addressed to this sector. Building on its enforcement activities, the Polish Office of Competition and Consumer Protection (UOKiK) published a ‘Guidebook on the Water and Sanitation Services’ Market’ to clarify the regulatory framework and increase awareness of consumers’ rights and obligations. The Guidebook provided practical tips on how to uncover illegal practices and has triggered an uptick in the number of complaints about abuse of dominance and collusive behavior in the sector.
Serbia (Honorable Mention)
The Serbian Ministry of Infrastructure proposed a Law on Utility Services which would limit the supply of some utility services to state owned enterprises. In response to this proposal, The Commission for Protection of Competition raised concerns regarding its potential to unlevel the playing field for private competitors and advocated for its amendment. As a result, the law was amended in order to allow private operators to provide these services as long as they fulfilled specific criteria. This reform has already enabled new private entrants to be active in the market.