The International Competition Network (ICN) and the World Bank Group (WBG) are pleased to share the results of the 2021 Competition Advocacy Contest. By showcasing success stories of effective competition advocacy, the contest aims to raise awareness of the key role played by competition agencies, government entities and non-governmental organizations in promoting competition and tackling the most pressing economic challenges.
Winners and honorable mentions were announced during a virtual ceremony on October 7th, 2021, when the chair of the ICN Steering Group and representatives of the ICN Advocacy Working Group, World Bank Group and the selecting panel discussed lessons learned and details of the successful advocacy initiatives with officials from the awarded Competition Authorities. Click here to see the recording of the virtual event.
The winning stories as well as stories worthy of honorable mention were selected among 31 entries submitted by both government authorities and non-governmental organizations from 19 jurisdictions around the world, divided in the following themes:
· Theme 1. Promoting an inclusive, sustainable, and green recovery while preserving contestability.
· Theme 2. Leveraging the competitive impact of the digital economy for a faster and inclusive recovery.
· Theme 3. Responding to the increased role of the State in markets and the government relief measures.
· Theme 4. Revisiting antitrust rules and Implementing initiatives in response to the Covid19 crisis.
The winners and honorable mentions of the ICN-WBG 2021 Competition Advocacy Contest were selected by the following panel (in alphabetical order):
· Eleanor M. Fox, Walter J. Derenberg Professor of Trade Regulation, New York University School of Law
· Georgiana Pop, Senior Economist, Global Markets, Competition and Technology Unit, Finance, Competitiveness & Innovation Global Practice, World Bank Group
· Mariana Tavares de Araujo, Senior Partner, Levy & Salomão Advogados
· Martha Martinez Licetti, Practice Manager, Global Markets, Competition and Technology Unit, Finance, Competitiveness & Innovation Global Practice, World Bank Group
Theme 1 - Promoting an inclusive, sustainable, and green recovery while preserving contestability.
The winner in this category successfully disputed anticompetitive government regulations that limited competition in the energy sector and increased the challenges faced by the country in meeting its clean energy production goals. In that regard, this initiative particularly underlines the role played by competition policy in enabling greener economies and the importance of (i) leveraging all types of advocacy tools and strategies available to competition authorities, including judicial litigation and (ii) monitoring government interventions in key markets to be able to tackle issues in a timely, sound and effective manner.
Mexico – The Federal Economic Competition Commission, COFECE (Winner)
COFECE advocacy initiative addressed a series of measures envisaged by the Government and Congress that would overturn an important reform of the electricity sector introduced in 2013, with the aim of ensuring a transition from a model with one state-owned enterprise (SOE) to one allowing private participation in the generation and wholesale of electricity. This reform also fostered increased participation of clean energy generation. The counter reform of the government may compromise competition in the electricity industry whilst discouraging new electricity projects including those based on clean sources and may lead to higher prices and/or higher government subsidies. COFECE carried out an advocacy strategy including issuing opinions and participating in constitutional litigation related to agreements and policies issued by the Government and laws passed by Congress. In one legal case against a Government-issued regulation, the Supreme Court ruled in favor of COFECE, declaring unconstitutional the provisions that most affect competition.
Theme 2 - Leveraging the competitive impact of the digital economy for a faster and inclusive recovery
The story awarded in this category illustrates the role played by competition policy in removing barriers to entry, innovation, and development in markets crucial for inclusive growth and recovery, such as banking and payment systems. The capacity to swiftly identify hurdles and propose solutions was essential to timely soften the impact of the Covid19 pandemic, which rapidly evolved into a severe economic crisis. For that, the JFTC initiative showed that having a stakeholder engagement strategy that enabled the authority to both gather information and explain the nature of competition barriers and the benefits of reform was at the core of its success.
Japan: The Japan Fair Trade Commission, JFTC (Winner)
The JFTC carried out a market study in the FinTech sector to learn whether and how new entrants utilizing new technologies would create new and innovative services and stimulate competition with incumbent banks with focus on cashless payment services with QR Code and barcode which have become more widespread under the COVID-19 pandemic. The JFTC engaged with the 206 operators of the business community (banks, funds transfer service providers and retail payment infrastructure providers) and 4,000 users of such services and noted differences between bank and non-bank operators, especially with respect to usage charges and interbank fees. The report recommended measures aimed at lowering usage charges and facilitating transactions, which inspired the whole government’s initiative for innovation and growth and were included in the government's concrete plan for national growth strategies.
Theme 3 - Responding to the increased role of the State in markets and the government relief measures
The authority awarded in this category successfully prevented the undue limitation of competition between SOEs providing health services during the Covid19 pandemic. This initiative shows the crucial role of competition authorities in finding less restrictive interventions to reach public policy goals, in this case preserving competition between SOEs to maintain the correct incentives to generate higher quality and accessibility of essential services while effectively responding to the health crisis. For that, collecting data to have an informed opinion, producing a sound policy paper, and engaging with key stakeholders at both the executive and legislative branches of government were crucial to generate impact.
Israel – The Israel Competition Authority, ICA (Winner)
Israel Competition Authority successfully advocated for the withdraw of a government’s proposal to suspend competition among the four state-funded health providers (HSOs) during the pandemic so to allow them to focus on providing care under the severe conditions of the Coivd-19 pandemic. While being financed in accordance with the number of citizens registered at each HSO, they are expected to compete over the quality of service, but the proposal would have suspended the possibility of switching providers by patients. Such limitations would have reduced the quality of HSOs, also in terms of numbers of doctors and lab services available and the level of care regarding Covid-19. After conducting a market inquiry, the ICA issued a policy paper and engaged with several stakeholders thus strengthened the public perception of the importance of competition in the public sector.
Theme 4 - Revisiting antitrust rules and Implementing initiatives in response to the Covid19 crisis
Stories in this category successfully showed the capacity of competition authorities to swiftly adapt its policies and practices amid extraordinary circumstances, supporting the public and private sectors to overcome all types of market challenges. Although extraordinary circumstances can warrant new rules, sound competition principles are crucial to setting out the boundaries for change and informing to which extent the reaction of governments and market players are aligned with pro-competitive outcomes in the long term. Awarded initiatives covered a wide range of problems and solutions, from increasing competition in the supply of highly demanded goods, such as boosting competition in the procurement of medical oxygen and removing barriers to entry to produce ethanol hand-sanitizers, to creating new mechanisms to address public concerns, such as dedicated mailboxes and response teams
Peru – The National Institute for the Defense of Free Competition and the Protection of Intellectual Property, Indecopi (Winner)
Indecopi’s advocacy efforts focused on the revision of regulations in markets which became essential during the Covid-19 crisis, such as the medicinal oxygen market, which was heavily impacted due to the rapid increase in demand from March to August 2020 that caused a major shortage and the filling of numerous complaints. The agency issued a report on the medicinal oxygen market containing recommendations addressed to State entities aimed at improving the competition conditions. The report included an analysis of the purchases of medicinal oxygen made by public entities, recommended alternative solutions for the efficient use of public resources, and most importantly advocated for the relaxation of a technical requirement which prevented the entry of new producers in this market. Such recommendations were adopted by the government and contributed to address the critical shortage of oxygen which caused a severe impact in the country.
Egypt – The Egyptian Competition Authority, ECA (Honorable Mention)
In the context of COVID-19, the Egyptian Competition Authority (ECA) successfully advocated for the uplift of restrictions in the production of ethanol hand-sanitizers. The ECA provided recommendations to the regulatory authority responsible for granting the licenses for the production of ethanol hand-sanitizers. The regulatory authority imposed arbitrary requirements for new undertakings wishing to obtain such licenses. It also imposed as maximum production quotas on the licensed undertakings. The ECA cooperated with the regulatory authority in order to lower entry barriers and remove the quotas. The implementation of the ECA’s recommendations has led to new market entry and consequently to a decrease in the prices of ethanol hand-sanitizers.
Spain – The National Commission of Markets and Competition, CNMC (Honorable Mention)
At the very beginning of the lockdown, in March 2020, the CNMC detected that the exceptional situation required a swift response from the public administrations. Therefore, it set up a dedicated mailbox with two purposes: on one hand, to support businesses willing to cooperate in response to the Covid19 crisis, by addressing their concerns and requests for guidance; on the other, to help consumers in time of uncertainty and confusion created by the pandemic in many markets. This initiative was widely advertised on the media, also through periodical press releases giving account of the CNMC monitoring and investigation activities. Around 700 queries were received within the period of 4 months (from March to July 2020) and most of them were answered within a week.