This presentation by Allan Fels from Consumers International (Australia) was made during a roundtable discussion on Changes in Institutional Design of Competition Authorities held at the 122nd meeting of the OECD Competition Committee on 18 December 2014. Find out more at http://www.oecd.org/daf/competition/changes-in-competition-institutional-design.htm

1. 122nd Meeting of the Competition Committee
Institutional Design of
Competition Authorities
Professor Allan Fels, AO and Professor Henry Ergas
17-18 December 2014
OECD, Paris
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2. OVERVIEW
• The multiple possible roles of competition
regulators
• Competition and consumer protection
• Competition and regulation
• Conclusions about integration of competition
law institutions with other institutions
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3. THE MULTIPLE POSSIBLE ROLES OF
COMPETITION REGULATORS (1)
• Competition law
• Consumer protection
• Includes unconscionable conduct towards consumers
• Regulation of utilities
• Communications
• Energy
• Transport
• Other
• Application of “access to essential facilities”
regime
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4. THE MULTIPLE POSSIBLE ROLES OF
COMPETITION REGULATORS (2)
• Prices oversight and regulation
• Big business/small business relationship
• Big business treatment of suppliers
• Unconscionable conduct
• Codes of conduct
• Advocacy and/or implementation of national
competition policy
• The “North Sea dumping” effect
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5. COMPETITION AND CONSUMER
PROTECTION
COMPLEMENTARY AND CONFLICTING ROLES
• Competition protects consumers
• Consumer protection can promote
competition
• Sometimes the policies clash i.e. the policies
are not complementary but conflicting
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6. EMERGING CHALLENGES FOR COMPETITION
AND CONSUMER PROTECTION
• Behavioural economics
• Expanding role of markets:
• Professions
• Social Service
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7. INSTITUTIONAL DESIGN AND CHALLENGES
COMPETITION AND CONSUMER PROTECTION
Benefits of integration:
• Coordination
• Combining expertise
• Political (visibility to consumers etc)
• A pro-market, pro-competitive approach to consumer
protection
• An appropriately pro-consumer approach to
competition
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8. INSTITUTIONAL DESIGN AND CHALLENGES
COMPETITION AND CONSUMER PROTECTION
Costs of integration:
• Differences in substance and implementation make
integration difficult and limit its advantages
• Consumer protection requires linkages across
government and at different levels of government.
This causes institutional complications
• Priorities may not be properly balanced eg an
intervention mindset may outweigh a pro-market
approach
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9. INSTITUTIONAL DESIGN AND CHALLENGES
COMPETITION AND REGULATION (1)
• Same purposes, different instruments?
• Same philosophies or not?
• Competition law tells firms what not to do.
Regulation tells them what to do.
• One proscribes, one prescribes.
• One is mostly ex post, the other is mostly ex ante.
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10. INSTITUTIONAL DESIGN AND CHALLENGES
COMPETITION AND REGULATION (2)
• Capture issue. Can be overstated?
• Time inconsistency?
• Discretion
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11. INSTITUTIONAL DESIGN AND CHALLENGES
COMPETITION AND REGULATION (3):
SOME OPTIONS
• General versus industry-specific regulation
• National versus state, provincial or local regulation
• Integration of competition and regulation in one
body?
• Partial integration e.g. Australian Energy Regulator
partly linked with ACCC
• Separate but coordinated.
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12. FINAL OBSERVATIONS (1)
• The issue of specialisation
• Policy coordination has challenges
• Need for “whole of government” oversight
• If separate, each agency needs to have expertise
in the other field
• Even if integrated, there are challenges in
securing good coordination
• Periodic surveys where the areas overlap
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13. FINAL OBSERVATIONS (2)
• There does not seem to be a universally valid
conclusion about whether the two areas
should be integrated
• Care for integrating competition and
consumer protection is stronger than for
competition and regulation
• History, size and circumstances of a country is
relevant
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