COMPETITION ASSESSMENT of Laws and Regulations OECD Tools and Experience III Ukrainian Antitrust Forum Federica Maiorano, OECD Competition Division 31 May 2017

Agenda What is competition assessment? What is the Competition Assessment Toolkit? Some examples from international experience

What is competition assessment? Competition assessment of laws and regulations Identify regulatory restraints to competition Develop alternative, less restrictive policies that still achieve government objectives In practice What? Scope of the review When? Ex ante / ex post By whom? Institutional set up

Why competition assessment? Rules and regulations typically have desirable socio-economic objectives But also the potential to harm the efficient functioning of markets Changes in technology and market conditions More market in regulated industries Better regulation, better economic outcomes

The benefits - Lifting regulatory restrictions Note: By how much GDP would be higher, long-term, if economies implemented product market reforms. It is assumed that product market reforms move each economy's regulations gradually towards best practice, as measured by the OECD Product Market Regulation indicator. Source: OECD (2013), OECD Economic Outlook, Vol. 2013/1, OECD Publishing. http://dx.doi.org/10.1787/eco_outlook-v2013-1-en; 10.1787/eco_outlook-v2013-1-graph161-en

OECD Competition Assessment Toolkit The “Principles” volume Principles, describing benefits of competition and the checklist The “Guidance” volume Detailed technical guidance on key issues to consider in competition assessment The “Manual” volume Step-by-step guide for performing competition assessment

Initial screening – four groups of questions Do the rules/regulations limit the number or range of suppliers? Do the rules/regulations limit the ability of suppliers to compete? Do the rules/regulations limit the incentives for suppliers to compete? Do the rules/regulations limit the choices and/or information available to consumers?

IDENTIFY POLICIES TO ASSESS Step 1 IDENTIFY POLICIES TO ASSESS Step 2 APPLY CHECKLIST ANY COMPETITION DISTORTION? YES NO Step 3 IDENTIFY POLICY OBJECTIVE STOP IS THE RESTRICTION PROPORTIONAL ? Step 4 NO YES LOOK for ALTERNATIVE STATUS QUO SELECT BEST OPTION Step 5 IMPLEMENT BEST OPTION Step 6 STOP EX-POST ASSESSMENT

Detailed review potentially leading to recommendations Objective of regulation Identifying alternatives E.g. international experience, sector experts, industry stakeholders Selecting among alternatives Qualitative, e.g. arguments based on economic literature or studies Quantitative, e.g. consumer benefits / surplus based on estimated effects in another countries / markets, customised analysis estimating impact

Examples of Pro-Competitive Initiatives in Reviews of Existing Rules and Regulations Australia (Hilmer process in mid-90s) UK (Guidelines on Competition Assessment) Korea European Commission Greece, Romania, Portugal and Mexico (direct OECD involvement) Review of all relevant sector legislation in a number of industries, e.g. retail, wholesale trade, construction

A variety of processes and institutional settings Directly engage with the policy development process E.g. competition assessment, advocacy One-off assessment, or system to challenge regulations E.g. multi-market commission independent from government and competition authority Flexible methodology OECD toolkit helpful in the application of a wide variety of Competition Assessment processes Source: 2014 OECD report, based on a survey of over 30 countries http://www.oecd.org/daf/competition/Comp-Assessment-ImplementationReport2014.pdf

Thank you http://www.oecd.org/competition/toolkit