Bulletin n°2: UNCTAD IGE on Competition Law and Policy

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Jul 6, 2017, 4:59:15 PM7/6/17
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Bulletin n°2 | Thursday, July 6, 2017
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About this bulletin
This week, experts are gathering in Geneva for UNCTAD's Intergovernmental Group of Experts (IGE) on Competition Law and Policy, a standing body established under the United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices (UN Set). The UN Set is the founding multilateral agreement on competition policy. With this bulletin, CUTS is keeping you posted on the proceedings.

@UNCTAD #UN4Competition

Enhancing international cooperation in the investigation of cross-border competition cases

This round table discussed possible improvements in tools and procedures for international cooperation, in order to address challenges faced in the investigation of cross-border competition cases.

According to UNCTAD, such challenges mainly pertain to: (i) Information protection in domestic law; (ii) Lack of international definition of confidential information ; (iii) Absence of waivers of confidentiality ; (iv) Limitations in admissibility of information ; (v) Limitations in implementing leniency programmes at the cross-border level ; (vi) Lack of mutual understanding, trust and interaction between competition authorities. In a survey presented by the US FTC, the identified most important possible obstacles to cooperation included: (i) Legal Barriers; (ii) Low willingness to cooperate; (iii) Different legal standards; (iv) absence of waiver; and (v) Lack of resource and time.

In his keynote speech, Igor Artemiev, Head, Federal Antimonopoly Service of Russia, noted that while recent technological developments have removed barriers, they have also generated new challenges. For instance, he warned that it is increasingly robots rather than people which are behind most international cartels, and that data also dictates prices in the food and other markets. These challenges call for increased cooperation between agencies. Thankfully, competition is not a politicised area, and Russia has been able to engage into wide-ranging international cooperation in frameworks like CIS, BRICS, UNCTAD etc. For instance, its 2016 MoU with BRICS enables parties to exchange opinions, find negative trends which undermine the market, and maintain working groups on pharmaceuticals, IT, global food value chains etc. Finally, he advocated for increasing the level of responsibility for TNCs on global markets, including by devising new practical tools.

Panellists identified possible tools and procedures for international cooperation in the investigation of cross-border competition cases, whether through cooperation agreement or informal cooperation mechanisms. Such mechanisms may entail exchange of information on target markets and companies, dates of simultaneous down raids etc. With most international cartel investigations initiated by leniencies, the need for maintaining confidentiality through information gateway was emphasised. It was also noted that younger agencies increasingly engage in parallel or follow-on investigations, as exemplified by the wire harness case.

#Construction, #Energy, #Insurance, #Banking among sectors most active in mergers says George Lipimile of @CCC_COMESA #UN4Competition

Sharing its experience of cooperation, the COMESA Competition Commission informed that its consultation framework on cross-border merger cases include: (i) sharing of a merger filing form and relevant market information, subject to confidentiality waivers from merging parties; (ii) investigations of past transactions by the merger parties in relevant member states; and (iii) collaboration on the design of remedies and undertakings to address competition concerns at national and regional level. Sectors identified as the most active in mergers included construction, energy, insurance and banking among others.

Pradeep S. Mehta, Secretary-General of CUTS International, shared lessons from case studies on co-operation and cross-border enforcement between small neighbouring countries and larger dominant economies. In particular, he pointed to the possibility that a mature competition regime could address a neighbouring nation’s interests by utilising its competition law provisions, which would make for a novel context towards collaborative competition enforcement. A case in point was the success of “Botash” (primarily a Botswanan firm) in enforcing the Competition Act of South Africa where an American association allegedly engaged into price-fixing. Full intervention is available at https://goo.gl/RnnmRg.

The keynote speech was given by Igor Artemiev, Head, Federal Antimonopoly Service, Russian Federation, followed by a panel discussion with Isabelle de Silva, President, French Competition Authority, France ; Ivo Gagliuffi, President, INDECOPI, Peru ; Toshiyuki Nambu, Senior Deputy Secretary General, Japan Fair Trade Commission ; George Lipimile, Chief Executive Officer, COMESA Competition Commission ; Russell Damtoft, Associate Director, Office of International Affairs, Federal Trade Commission, United States.


“Small economies have been able to leverage bigger neighbours for enforcing #Competition, e.g Botswana - South Africa on Soda Ash" @psm_cuts #UN4Competition


Challenges in the design of a merger control regime for young and small competition authorities

This roundtable explored the main elements that should be taken into account by legislators when designing a merger control system, particularly considering the constraints faced by small and young competition authorities. Being a main pillar of competition regimes, merger control aims to preserve markets’ competitive structure where competition might be affected by merger and takeover operations of firms.

In an introductory presentation, UNCTAD recalled the following important principles in merger control: (i) Celerity, e.g. deadlines for notification and review periods; (ii) Transparency, e.g. to promote accountability, predictability and consistency, and access to the file by third parties; (iii) Rights of defence, which sould be respected such as maintaining confidentiality of information; and (iv) Substantive analysis: the dominance test and substantial lessening of competition.

It was also emphasised that effective merger control is fact-intensive, and hence requires adequate institutional resources and powers such as: (i) mechanisms to gather information from parties; (ii) independence and objectivity; (iii) determination of the scope in the application of rules; (iv) consideration of spill-over effects in other enforcement areas etc. In order to ensure adequacy of their system, young and small authorities were advised to periodically review their merger control provisions.

Several small and young competition agencies presented their merger control system, and exposed the challenges they face in this area. In Botswana for instance, such challenges included: (i) unavailability of credible data; (ii) level of market research required to understand the structure of the market and inform the decision; (iii) limited appreciation of roles of key stakeholders in merger enforcement; (iv) human and financial resource constraints; (v) legislative ambiguity and inadequacy; (vi) limited expertise and experience of the agency; (vii) diverse stakeholder expectations on the objective of merger control; (viii) implementation of mergers without notification; and (ix) alignment of national priorities with emerging trends in merger control. Several of these challenges were similarly mentioned by Kenya, Albania, the Philippines and others.

In tackling these challenges, young and small authorities have adopted approaches such as: (i) signing MoUs with custodians of credible data sources, e.g. sector regulators; (ii) participation in trainings, e.g. by ICN; (iii) extensive benchmarking during merger assessments; (iv) public awareness and stakeholder engagement; (v) streamlining processes and procedures for fast-tracking simple mergers; (vi) peer review of old cases by competition experts etc.

The keynote speech was given by Robert Saint Esteben, Partner, Bredin Prat Paris, France, following by a panel discussion with Carlos Filartiga, President, Competition Authority of Paraguay ; Juliana Latifi, President, Albanian Competition Authority ; Magdeline Gabaraane, Director Mergers and Monopolies, Botswana Competition Authority ; Mona El Garf, Chairwoman, Egyptian Competition Authority ; Arsenio M. Balisacan, President, Philippines Competition Authority; Francis Kariuki, Director General, Competition Authority of Kenya ; Adama Diomande, Director, Directorate General, West African Economic and Monetary Union Commission.


Jaipur • New Delhi • Chittorgarh • Kolkata • Hanoi • Nairobi • Lusaka • Accra • Geneva


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