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A REPORT ON THE THIRD ANNUAL CONFERENCE
OF THE INTERNATIONAL COMPETITION NETWORK∗
By Dr Simon J. Evenett and Dr. Michal S. Gal
The Third Annual Conference of the International Competition Network (ICN) was held
in Seoul, Korea, on April 21-22, 2004. An ICN panel on Improving the Effectiveness of
Competition Advocacy was presented the day before the Annual Conference during the
Seoul Competition Forum 2004. The Conference was opened by Dr. Chul-kyu Kang,
Chairman, Korea Fair Trade Commission and host of the Conference, and Dr. Fernando
Sánchez Ugarte, Chair of the ICN Steering Group and President of the Mexican Federal
Competition Commission. One hundred and sixty one representatives, representing 55
antitrust agencies from 49 jurisdictions, and 96 non-governmental experts (referred to as
non-governmental advisors or NGAs), 11 observers, and special guests met in Seoul to
continue their valuable work on merger review and capacity building and the
implementation of competition policy, to discuss antitrust enforcement in regulated
sectors, to assess the implementation of previously-adopted Recommendations of the
ICN, to agree upon the establishment of a new working group on cartels, and to discuss
proposals for future work.
Opening Ceremony
The conference began with an opening ceremony.1 Dr. Kang welcomed the participants
and noted that since its establishment in October 2001, the ICN has taken impressive
strides: the number of members has increased substantially from 16 agencies representing
14 jurisdictions to almost 90 agencies representing 76 jurisdictions2, and its agenda has
expanded. Dr. Kang stressed the need to consolidate international co-operation in order to
build a global consensus that competition rules need to be implemented effectively,
thereby promoting consumer welfare and economic efficiency. In this regard, the ICN
Working Group on Capacity Building and Competition Policy Implementation has an
important role in fostering competition advocacy and in sharing related experiences
among different nations. Noting the special characteristics of network industries, which
can create major challenges for competition authorities, Dr. Kang underscored the
∗
The ICN Steering Group expresses its profound thanks to Doctors Simon J. Evenett and Michael S. Gal for
serving as rapporteurs at the conference in Seoul and for their significant effort in producing this report. Dr.
Evenett is a University Lecturer in International Business, Saïd Business School, Oxford University and
Fellow of Corpus Christi College, Oxford. Dr. Gal is Senior Lecturer and Director of the Law and MBA
Program, Faculty of Law, University of Haifa, and Academic Fellow, New York University Center for Law
and Business.
1
An agenda for the Third Annual Conference can be downloaded from http://www.icn-seoul.org/ by
clicking on the button “Conference Program” in the right hand column of this webpage.
2
The membership list of the ICN and contact information for officials responsible for ICN-related matters
can be downloaded from http://www.internationalcompetitionnetwork.org/icn_membership_list.pdf
1
importance of the Working Group on Antitrust Enforcement in Regulated Sectors. Dr.
Kang also argued for the establishment of a Working Group on Cartels and he endorsed
the introduction of an Implementation Session, where the goal is to assesses and reflect
upon the extent to which ICN members have adopted previously agreed
recommendations and principles.
Dr. Fernando Sánchez Ugarte added his welcome. Noting the initial skepticism of some
towards the ICN’s ability to achieve its goals, Dr. Sánchez Ugarte summarized the
progress achieved thus far. The ICN has been able to bring together the majority of
world’s antitrust authorities to work among themselves and in co-operation with
interested inter-governmental organizations and non-governmental advisors. The ICN has
produced, through purely voluntary work, several international conferences, various
publications, and an array of work product, which promise to be of great practical use in
achieving convergence with respect to the implementation and enforcement of
competition law and policy throughout the world. The fact that 41% of the members are
low-income countries and 30% are from emerging and transition economies is a very
strong indication that competition policy is an important item on the agenda of
developing countries, and it is therefore important that international efforts address the
specific problems and needs of these countries. The ICN thus plays a unique role in
serving as a forum where developing and industralized countries can engage in a dialogue
on an equal footing. It has, in fact, created a strong and extensive international network of
competition enforcers and professionals. Dr. Sánchez Ugarte described the important
contributions made by all of the ICN’s Working Groups. Noting that the fight against
hard-core cartels is the one of the most complex and strategically important challenges
facing antitrust authorities today, and that such cartels seriously affect emerging and
developing countries, the proposal to establish a Working Group on Cartels is highly
significant. According to Dr. Sánchez Ugarte, such a working group will raise awareness
about the need and the importance of fighting cartels and will also develop investigative
techniques and foster international co-operation that will help member agencies become
more effective in enforcing anti-cartel legislation.
The conference was largely devoted to presentation and discussion of the work of the
three existing ICN Working Groups, specifically the Merger Working Group, the
Working Group on Capacity Building and Competition Policy Implementation, and the
Working Group on Antitrust Enforcement in Regulated Sectors. A separate session was
dedicated to the implementation of the ICN’s work product in member jurisdictions. A
new Working Group on Cartels was established.3
Highlights of the meeting included an address by Korea’s acting President, Mr. Goh Kun.
After welcoming conference attendees to Seoul, President Goh praised the role of the
ICN in leading competition advocacy around the globe and applauded its pivotal role of
facilitating the convergence of competition law and policy. President Goh also
emphasized the significance of holding the conference in Asia, a region that is coming to
grasp the importance of market competition. The ICN Annual Conference is also a
3
A press release, describing the accomplishments of this Annual conference, was issued shortly after the
conclusion of the conference on April 22, 2004. This press release can be downloaded from:
http://www.internationalcompetitionnetwork.org/news/apr042004.html
2
landmark event for Korea, President Goh said, a country that is committed to establishing
a well-functioning market economy.
Merger Working Group
The Merger Working Group, chaired by Mr. Makan Delrahim, Deputy Assistant Attorney
General of the U.S. Department of Justice, has been working steadily since the first ICN
meeting through three subgroups focusing on Investigative Techniques, Analytical
Framework, and Notification and Procedures.4 Their work has addressed the tools and
pre-requisites for the creation of more efficient merger review regimes.
The first session on the activities of this Working Group was chaired by Mr. Delrahim. In
introducing this session, Mr. Delrahim noted that the fact that to date approximately
seventy jurisdictions have some kind of merger review regime, creating a significant risk
of conflicting policies.5 For merger review to be effective and efficient, it should be
grounded in sound principles. To this end, the Merger Working Group has made
extraordinary progress, including the creation of a comprehensive study of guidelines for
merger review and the review and analysis of techniques for obtaining reliable evidence.
Building on the eight Guiding Principles6 and seven detailed Recommended Practices7
concerning merger notification and procedures that the ICN adopted in the past, four new
Recommended Practices were submitted for adoption at this Annual Conference. Such
activities create the potential for meaningful convergence. Mr. Delrahim noted that
introspection of one’s laws is the key to change towards more efficient merger regimes.
He reported that the work of ICN has required the United States to undertake repeated
self–examination of its merger review regime, and that such changes assist international
convergence and mutual understanding.
Panel I: Investigative Techniques
Subgroup chair Mr. Dror Strum, General Director of the Israeli Antitrust Authority,
chaired the panel on investigative techniques. The focus of the subgroup is on how to
obtain reliable information necessary to make a sound decision in a merger case within a
legally specified time frame.8 The subgroup’s importance derives from its focus on the
practical aspects of the merger review process and the goal of creating best practices for
dealing with the flow of information. Given the similarities in the issues confronting
competition authorities in merger analysis, Mr. Strum argued that this subgroup has an
important role in increasing the efficiency of the merger review process. Mr. Strum
4
Further information on the activities of the ICN’s Mergers Working Group can be downloaded from
http://www.internationalcompetitionnetwork.org/mergers.html
5
Mr. Delharim’s introductory remarks can be downloaded in full at:
http://www.internationalcompetitionnetwork.org/seoul/delrahim.pdf
6
Further information on these Guiding principles can be downloaded from:
http://www.internationalcompetitionnetwork.org/icnnpguidingprin.htm
7
Further information on these Recommended Practices can be downloaded from:
http://www.internationalcompetitionnetwork.org/mnprecpractices.pdf
8
Further information on the activities of this subgroup can be downloaded from:
http://www.internationalcompetitionnetwork.org/investigativetechniques.html
3
highlighted the previous achievements of the subgroup and its future challenges. The
subgroup has produced a manual on investigative techniques. To the three chapters
presented in Mérida, the group added two more in the past year entitled “Planning a
Merger Investigation”9 and “A Private Sector Perspective on Tools & Techniques for
Merger Investigations”.10 Following the success of the first workshop on investigative
techniques, a second one is planned for October 2004. Such workshops serve an
important function as they enable participants to work in small groups, thereby
facilitating fruitful discussions.
Mr. Paul Malric-Smith, Head of Unit in the Merger Task Force, Directorate-General for
Competition in the European Commission, elaborated on the next workshop to be held by
the subgroup.11 The workshop will be divided into four session topics: interaction with
merging parties, requests for information, third parties, and respondents’ biases, focusing
on four investigation areas: product market definition, identification of the relevant
geographic market, entry, and efficiencies. The main discussions will be held in small
break-out groups, animated by moderators, who will rotate between the different groups.
The discussion in the workshop will be based on a hypothetical merger case in the
soymilk market, which will provide sufficient basis to identify the key issues for
investigation. The conclusions will be presented at plenary sessions. The planned
workshop is highly recommended for staff lawyers and economists from member
countries.
Dr. Patrick Krauskopf, Vice Director of the Swiss Competition Commission, introduced
the fourth chapter that the subgroup has prepared for the handbook of merger
investigative techniques (to be added to the first three chapters that were presented at the
Second Annual Conference in Mérida.)12 The chapter deals with planning a merger
investigation, which is the first step in an effective merger investigation. Mr. Krauskopf
discussed three of the concepts of effective investigative planning on which the chapter
elaborates; namely, focusing the investigation, managing evidence and other
administrative tasks, and handling timing constraints.
Ms. Constance Robinson, former Director of Operations of the Antitrust Division of the
U.S. Department of Justice and currently a U.S. lawyer and non-governmental advisor to
the Working Group, offered a private sector perspective on the tools and techniques for
merger investigation, which are included as a separate chapter of the handbook.13 Ms.
Robinson reiterated two of the primary concerns outlined in the chapter. First, the length
of time for the reviews and the uncertainty about their duration, and, second, the
magnitude of direct costs and associated losses of productivity. The latter costs, which
are often the primary “killer” of a deal, are magnified in the context of multi-
9
This document can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/mwg_its1_seoul.pdf
10
This document can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/mwg_its2_seoul.pdf
11
Mr. Malric-Smith’s powerpoint presentation can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/malricsmith.pdf
12
Mr. Krauskopf’s powerpoint presentation can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/krauskopf.pdf
13
Ms. Robinson’s powerpoint presentation can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/robinson.pdf
4
jurisdictional reviews. Thus, it is essential that firms and enforcement agencies work
together to ensure that the most efficient merger review processes are adopted. Her
presentation elaborated on some of the tools suggested in the private sector’s chapter to
reduce the costs of merger review, including the implementation of more efficient
information gathering techniques, ways to address co-operation, and confidentiality
issues.
Presentation on the Analytical Framework Subgroup
Mr. John Vickers, Chair of the ICN Analytical Framework Subgroup and Director
General of the UK Office of Fair Trading, made a presentation on the analytical
framework for merger analysis.14 Mr. Vickers noted that there were three levels of
analytical framework: laws and regulations (which were treated in Naples at the First
Annual Conference), guidelines (which were first addressed in Mérida and a final report
on them was prepared for this Annual Conference) , and cases (which remain an option
for future work for this subgroup.) Mr. Vickers elaborated on this subgroup’s past
endeavors, including the comparison of twelve national guidelines that was completed
with the assistance of member authorities and non-governmental advisors.15 He then
proposed options for future work for discussion and decision. The proposed topics
included devising a merger guidelines checklist; a review of market share data; a study of
remedies; a database of cases; the elaboration of existing chapters; widening reach; an
examination of the nexus between guidelines and casework; more economics tools; and
other topics.16
Panel II: Notification and Procedures
Mr. Randolph Tritell, Assistant Director for International Antitrust at the U.S. Federal
Trade Commission and Chair of the Subgroup on Notification and Procedures, opened
the third panel.17 The work of the subgroup focuses on the procedural aspects of merger
review, which are very important for well-functioning national and multi-jurisdictional
merger review systems.18 Mr. Tritell noted that 13 jurisdictions were active in the work of
the subgroup and that several NGA’s actively participated as drafters of the
Recommended Practices assembled for the Seoul meeting. Mr. Tritell provided an
overview of the subgroup’s work and described four new proposed Recommended
14
Mr. Vickers’ powerpoint presentation can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/vickers.pdf
15
Further information on this subgroup’s activities can be downloaded from:
http://www.internationalcompetitionnetwork.org/analytical.html. Further information on the analysis of
national merger guidelines can be downloaded from
http://www.internationalcompetitionnetwork.org/seoul/analysisofmerger.html
16
Suggestions for the future work plan of this subgroup can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/mwg_afsg_seoul.pdf
17
Mr. Tritell’s opening remarks can be downloaded from
http://www.internationalcompetitionnetwork.org/seoul/tritell1.pdf and the associated powerpoint
presentation is available at: http://www.internationalcompetitionnetwork.org/seoul/notiproctritell.pdf
18
Further information on this subgroup’s activities can be downloaded from:
http://www.internationalcompetitionnetwork.org/notification.html
5
Practices that would become the focus of the panel’s discussion. The new Recommended
Practices concern the Conduct of Merger Investigations; Procedural Fairness;
Confidentiality; and Interagency Coordination.19 (Once adopted, these new
Recommended Practices would be added to the seven existing ICN Recommended
Practices that the ICN approved at previous conferences.) The subgroup’s work included
updating a survey of costs and burdens of merger notification for the Seoul meeting; its
web links project, by which the merger laws, regulations, and guidelines of 55 ICN
jurisdictions with merger laws are already linked to the ICN website; and the group’s
template project, pursuant to which the merger questionnaire responses of 56 jurisdictions
are linked to the ICN website. The templates, in conjunction with the web links, provide
readily-accessible information on merger systems to those involved or interested in multi-
jurisdictional merger reviews and are one of the most comprehensive resources in the
world on national merger laws.
The four new Recommended Practices were the subject of an interactive panel
discussion.
The panel first discussed the Recommended Practice on the Conduct of Merger
Investigations. The Moderator, Mr. Mark Pearson, Australian Competition and Consumer
Commission, emphasized the basic principle that “Merger investigations should be
conducted in a manner that promotes an effective, efficient, transparent and predictable
merger review process.” Mr. Dan Sjoblom, European Commission, followed this up by
discussing the Recommended Practice’s call for opportunities for meetings or discussions
between the competition agency and merging parties at key points in the investigation,
including before determining remedies or conditions, and before a final decision is taken.
The speakers discussed other elements of the Practice and provided examples from their
jurisdictions and based on their experience. For example, Mr. William Blumenthal, a
U.S. lawyer and an active non-governmental advisor in this subgroup, stressed the
importance of contacting the merging parties early in the review process. He observed
that oral communications between the merging parties and the reviewing authorities are
sometimes very limited, and offered examples of the various approaches employed by
competition authorities, including written questions and telephone conversations, whether
formal or informal, to ensure that the merging parties are heard. Following on this point,
Commissioner. Fernando Heftye, Mexican Federal Competition Commission, highlighted
the importance of flexibility for the agency, noting that the Recommendation provides for
such flexibility, e.g., that agency discussions with parties do not limit the agency’s
discretion to pursue new or additional theories of competitive harm that may emerge
during the investigation.
The panel then went on to discuss procedures that should be adopted to ensure that an
investigation is completed without undue delay. Mr. Tritell discussed timing agreements
as one option to achieve timely review. Mr. Jonas Koponen, a lawyer from Brussels and
an active NGA, said that setting a timeline for merger review is especially important to
parties in multi-jurisdictional mergers. Commissioner Heyfte described the Mexican law
which sets out maximum review periods. Even where such legal deadlines exist, he said,
19
Further information on these four new Recommended Practices can be downloaded from
http://www.internationalcompetitionnetwork.org/seoul/mwg_nps_seoul.pdf
6
the authority should attempt to complete its review as soon as practicable. Mr. Pearson
observed that the length of the merger review process is an important determinant of the
societal costs of such reviews. Mr. Sjoblom added that statutory deadlines are equally
beneficial to both sides of the merger review process, as they require the agency to be
focused in its review and reduce some of the uncertainty faced by the merging parties.
The panel then discussed how this Recommended Practice seeks to help competition
agencies avoid imposing unnecessary or unreasonable costs and burdens on merging
parties or on third parties. Mr. Blumenthal noted that provision that such parties should
not be required to supply information that is not in their custody or control or that they
cannot reasonably obtain. He also stressed the need to reduce costs arising from the
translation of documents, by instead providing for selective translation. Even though
agencies often cannot make a sound decision based on documents written in other
languages, Mr. Tritell accepted that they could be selective in imposing full-text
translation obligations to better balance the needs of the agency and the cost of
translation, as provided in the Recommended Practice. He also noted, that the Practice
provides that the ultimate decision on the matter should be made by the agency. Mr.
Koponen stressed that there are various ways to accommodate the needs of the reviewing
agencies without resorting to full translations.
The subgroup’s Recommended Practice on Confidentiality was then discussed. Mr.
Pearson explained the basic principle that business secrets and other confidential
information received from the merging parties and third parties in connection with the
merger review process should be subject to appropriate confidentiality protections.
Noting the link to the Recommended Practice on the Conduct of Merger Investigations,
Commissioner Heftye emphasized that that agencies should give due consideration to the
protection of confidential information in other jurisdictions from which information is
requested. He also stressed the need to create appropriate safeguards to protect the
parties’ confidential information. Mr. Sjoblom added that confidentiality rules should
strike an appropriate balance between commercial interests and other considerations,
including the need to ensure procedural fairness, the public interest in protecting the
decision-making process, and transparency of the merger review process. It is thus
important that confidentiality rules not be too restrictive, in order to ensure transparency
and that the agencies have sufficient information to complete their task successfully.
The panel next considered the Recommended Practice on Procedural Fairness. Mr.
Sjoblom said that procedural fairness is relevant to all merger review systems, whether
prosecutorial or administrative. It was noted that procedural fairness comprises many
elements that are included in other Recommended Practices. This proposed
Recommended Practice focuses on due process; that is, providing the merging parties and
other parties with a legitimate interest in the transaction under review with a meaningful
opportunity to express their views. Mr. Tritell added that different methods can be used
to ensure procedural fairness, some of which are enumerated in the Recommended
Practice.
Lastly, the panelists discussed the proposed Recommended Practice on Interagency
Coordination. Commissioner Heftye introduced the principle that competition agencies
should seek to coordinate their review of mergers that may raise competitive issues of
common concern. He added that the Recommended Practice notes that interagency
7
coordination is voluntary, though it encourages competition agencies to coordinate
merger reviews as appropriate, while recognizing that agencies remain free to make their
own independent decisions. Mr. Blumenthal added that interagency coordination is also
important for the private sector, as it may reduce the costs of merger review. Mr. Sjoblom
added that interagency coordination is especially important in difficult cases, in which the
exchange of views between the enforcement agencies might be very useful. Mr. Tritell
said that such coordination can reduce the duplication of review efforts. Mr. Koponen
added that interagency coordination can reduce unnecessary costs and burdens in all
stages of merger review.
Participants were then invited to a luncheon hosted by the Mayor of Seoul, Mr. Myuong-
Bak Lee. Mr. Lee welcomed the group and said it is a great honor and a pleasure to host
the ICN Annual Conference in Seoul, a city which is following a steady path of
encouraging competition and modernization.
Capacity Building and Competition Policy Implementation Working Group
The session on Capacity Building and Competition Policy Implementation began with a
number of introductory remarks by Mr. David Lewis, Chairperson of the Competition
Tribunal of South Africa. Mr. Lewis noted that the Working Group on Capacity Building
and Competition Policy Implementation (CBCPI) had produced six reports, three
concerning technical assistance and three relating to the steps necessary to effectively
implement competition law and policy in developing and transition economies. 20 These
reports, along with the ICN’s other activities including its fundraising initiatives,
demonstrated the ICN’s commitment to inclusiveness and to developing and transition
countries. Mr. Lewis noted the interest in effective competition law and policy in
developing and transition economies is a product of enlightened self-interest.
Furthermore, in many economies the pace of liberalization has outstripped the societal
institutions necessary to tackle anti-competitive practices and Mr. Lewis contended that
the activities of this Working Group would go some way to redress this imbalance.
Mr. Lewis went on to make some general remarks about the future direction of the ICN.
He observed that the collapse of the World Trade Organization’s Ministerial meeting in
Cancún in September 2003 was due in part to a failure to listen to developing countries
and their representatives. The ICN should not make that mistake by marginalizing
developing countries, and he offered four suggestions to that end. First, the “virtual”
nature of the ICN should be rethought. A permanent secretariat could, amongst other
functions, facilitate participation in the ICN. Mr. Lewis expressed his gratitude to the
Canadian Competition Bureau for their considerable administrative support for the ICN,
but noted that the current secretariat arrangements were only a partial solution.
Second, Mr. Lewis suggested that the existing set of Non-Governmental Advisors should
be augmented by officials from international organizations such as the World Bank, the
World Trade Organization (WTO), the United Nations Conference on Trade and
20
Further information on this Working Group’s activities can be downloaded from
http://www.internationalcompetitionnetwork.org/cbcpi.html and documentation from
http://www.internationalcompetitionnetwork.org/cbcpidocuments.html
and http://www.internationalcompetitionnetwork.org/advocacydocuments.html .
8
Development (UNCTAD), the Organisation for Economic Co-operation and
Development (OECD), and by members of civil society. Third, the ICN should address
contentious areas of competition law-policy, such as monopolization and intellectual
property. Mr. Lewis said the ICN had not tackled these issues in part because of a belief
that these subjects were too advanced for competition agencies from developing and
transition economies, who were better suited to issues involving competition advocacy
and cartel enforcement. He was not persuaded by this view and observed that addressing
these complicated and contentious areas of competition law-policy would in itself be
technical assistance to the newer competition authorities. He observed that the nature of
the ICN. because it is not a treaty making body, is well-situated to address these more
controversial topics.
Mr. Lewis’ final suggestion was that developing and transition countries’ concerns
should not be addressed within a single Working Group. So as to ensure that developing
country perspectives are given due attention, Mr. Lewis proposed that every ICN working
group should have a co-chair from a developing or a transition country and one from an
industrialised economy. Mr. Lewis concluded his introductory remarks by thanking the
various contributors to, and the co-chairs of, the Working Group on Capacity Building
and Competition Policy Implementation.
Mr. Philip Lowe, Director General of the European Commission, who chaired this
session, suggested that the work of the CBCPI be focused on the issues confronting the
majority of the ICN’s members. With this in mind, Mr. Lowe observed that in practice
most economies place considerable emphasis on dealing with public and private
dominance. Ultimately these issues will need to be addressed by the ICN. Mr. Lowe
noted that task of the panel of speakers was to report on four capacity building and
implementation-related initiatives that were launched in Mérida last year. Those
initiatives concern the effectiveness of technical assistance, raising the profile of
competition agencies among consumers, outreach to donors on capacity building matters,
and competition advocacy in regulated sectors. Many of the subsequent contributors
spoke to these matters.
Mr. William Kovacic, General Counsel of the U.S. Federal Trade Commission, reported
on the Working Group’s activities relating to the effectiveness of technical assistance.21
The Group is undertaking two activities in this regard. The first is to conduct a
comprehensive examination of past technical assistance projects to identify how the
technical assistance needs of a newer competition agency can best be assessed, and which
models of technical assistance work best at the various stages of a competition agency’s
development. The Group is in the process of drafting the survey, and will conduct the
interviews over the next twelve months. The second is to provide an inventory past and
current technical assistance initiatives and programs. The Group has completed the
inventory of past technical assistance projects, and is in the process of compiling
21
Professor Kovacic’s remarks can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/kovacic.pdf
9
information on current projects. This project will facilitate coordination among donors,
providers and recipients.22
Ms. Blanca Rodriguez-Galindo, Head of International Affairs at the Directorate-General
for Competition in the European Commission, reported on the one of the subgroup’s
initiatives on co-operation with donor agencies.23 The Working Group held a workshop
in Paris that brought together recipients and donor agencies to discuss issues related to
co-operation..24 The goal of this workshop was two-fold: to enhance the understanding of
donor agencies of developing and transition economies’ competition policy-related needs
and to allow competition agencies to learn more about other agencies’ challenges and
needs and about the activities of donor institutions. Ms. Rodriguez-Galindo noted that she
drew three conclusions from this workshop. First, that there was a need for closer co-
operation with and among donor agencies. Second, and relatedly competition agencies
ought to be more involved in the competition-related initiatives of their nation’s donor
agencies. Secondments and internships between competition agency staff and donor
agency staff are two tangible examples of such involvement. The third conclusion was
that “transaction costs” needed to be reduced, leading to more streamlined donor
programs. The subgroup prepared a substantial report on the findings of the workshop.25
Ms. Rodriguez-Galindo made a number of other interesting comments concerning the
effectiveness of technical assistance programs and the potential role of the ICN in this
area. In her view, discussions of technical assistance should include an assessment of the
sustainability of any initiatives. Retaining knowledge and expertise is a particular
challenge for recipient agencies and, to that end, measures to reduce staff turnover are
relevant. On the role of the ICN in technical assistance matters, four potential roles were
identified. Monitoring and coordination of technical assistance programs is one
possibility. This could include identifying what countries and needs have not been
addressed by prior and on-going initiatives of donor agencies. It was also argued that the
ICN could reflect on the appropriate involvement of donor agencies, especially in the
light of the activities of international organizations such as the OECD and UNCTAD.
Another potential role for the ICN could be to collect information on teaching materials
and practices used in technical assistance programs. Finally, the merits of establishing a
framework that simplified the distribution of technical assistance at the international and
regional levels might be considered.
An overview of the Working Group’s activities concerning the nature and effectiveness
of competition advocacy in regulated sectors in developing and transition economies was
22
An inventory of technical assistance projects and initiatives was circulated at the Third Annual
Conference and can be downloaded from:
http://www.internationalcompetitionnetwork.org/tainventory_seoul.pdf
23
Ms. Rodriguez-Galindo’s powerpoint presentation can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/blancaslides.pdf
24
The agenda of this workshop and some of the presentation made in Paris can be downloaded from:
http://www.internationalcompetitionnetwork.org/capacitybuildingwksp.html. A report on this workshop
can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/capacitytbuild_sg2_seoul.pdf
25
The report is available at: http://www.internationalcompetitionnetwork.org/capacitytbuild_sg2_seoul.pdf.
10
given by Mr. Bruno Sobral, Secretariat for Economic Monitoring, Brazil.26 On the
balance between enforcement activities and competition advocacy by government
agencies in developing countries, Mr. Sobral argued that while younger agencies tended
not to have well developed enforcement tools and practices, they were well-suited to
influence regulatory rule-making and institutions through advocacy initiatives, given the
widespread liberalization measures that are being undertaken in many of these
economies. Specific activities, however, will vary, since capacity and authority to engage
in advocacy activities differs across jurisdictions. Very few competition agencies, for
example, can make binding recommendations. Moreover, although competition agencies
in developing and transition economies are well-placed to conduct advocacy activities,
they often face difficulties of measuring the positive affects of advocacy in the near-term,
making it harder to allocate scarce resources to these activities. Mr. Sobral noted that one
way to estimate the benefits of competition advocacy is to seek input from sector-specific
specialists, who may offer a reliable guide to short term benefits of advocacy. In the
longer term, competition authorities can measure the success of their advocacy activities
by examining the prices and quality of goods and services in sectors were successful
advocacy initiatives were undertaken.
Mr. Sobral reported on the results of a questionnaire sent out to ICN member competition
authorities, of which 33 responses were received. The results indicated that considerable
efforts needed to be made to increase the understanding of the benefits of competition
among sectoral regulators. For example, only forty percent of respondents from
developing and transition economies indicated that regulatory agency personnel were
aware of the need to prioritize competition as a critical objective of regulatory policy.27
The respondents also reported on specific advocacy activities, and the report on the
survey provides eight examples of successful advocacy initiatives that can serve as
models for other jurisdictions who wish to engage in similar activities. In the light of
these findings, Mr Sobral proposed that future ICN’s activities in this area should include
two related activities: preparation of more detailed case studies that others can use as a
roadmap for advocacy initiatives, and studies that measure actual effects of advocacy
activities, which can be used to promote the importance of prioritizing competition
among sectoral regulators. At this point, Mr. Lowe added that competition advocacy is
also necessary to induce necessary changes in the legal framework.
In his presentation Mr. Byung Ju Lee, Director General of the Competition Policy Bureau
at the Korean Fair Trade Commission, described the recent establishment of an OECD
regional center in Seoul, Korea. This center was set up jointly by the Korean Fair Trade
Commission and the OECD and will offer a course on competition law and policy for
officials from the Asian nations. This initiative will help enhance capacity in developing
and transition economies, capacity which is in greater demand as globalization proceeds.
Mr. Lee then went on to make three suggestions for enhancing the effectiveness of
technical assistance programs, drawing on Korea’s experience in this regard. His first
suggestion was motivated by the observation that the programs of different bilateral
26
Mr. Sobral’s powerpoint presentation can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/sobral.pdf
27
These and other findings can be found in a report that can downloaded from
http://www.internationalcompetitionnetwork.org/seoul/capacitybuild_sg4_seoul.pdf
11
donors may, in fact, be hindering the convergence of competition law and enforcement
practice, which is a goal of the ICN. There may be a case for developing a standard
program of technical assistance that includes best practices. The second suggestion was
that the ICN identify “bridge” competition agencies, those who had recently been
recipients of technical assistance but now can act as providers of such assistance, with a
better understanding of the difficulties of newer agencies. Bodies such as the OECD
regional center could provide additional resources to these “bridge” agencies that would
allow them the opportunity to offer technical assistance.. Such agencies may channel
their efforts through bodies such as the OECD regional center. Mr. Lee’s final suggestion
was that the ICN could establish a database on technical assistance projects. This data
could then be shared with the goal of improving technical assistance initiatives.
The next speaker on this panel was Mr. Allan Asher, a Member of the Office of Fair
Trading Board in the United Kingdom.28 Mr. Asher discussed a number of the
relationships between consumers and competition enforcement agencies.29 First, he noted
that raising the profile of an enforcement agency among consumers was only a means to
an end, namely the more effective implementation of competition law. The latter itself is
a means to another end, that of promoting consumer welfare through greater competition.
These linkages are not always evident to consumers. Compared to laws against
misleading advertising, for example, competition laws are often seen as being less
relevant to consumers. Furthermore, the complexity of antitrust court cases and lengthy
investigations by enforcement agencies also reduce the perceived value of competition
law to consumers. Moreover, consumers tend to be concerned about the ethical
dimensions of decision-making by firms, while such considerations tend to receive little
attention from competition enforcement agencies. Finally, much too much has been
promised about competition law around the globe. It may be the case that nearly 100
jurisdictions have enacted competition laws but how may countries give their
enforcement agencies enough resources to effectively implement their legal mandates? It
should also be remembered that there is plenty of competition for the attention of
consumers, not least from anti-globalization activists, trade unions, and advertisers.
In Mr. Asher’s view the stature of competition agencies could be raised among
consumers by the following three measures. Competition agencies should, where
possible, use plain language. They should also develop linkages with consumer groups
and be responsive to the latter’s legitimate goals. Finally, enforcement action should
target firms that engage in anti-competitive practices that consumers can readily relate to.
Mr. Georges Korsun, a U.S.-based economist, provided a private sector perspective and
in doing so made three points. He first described several key desirable properties of a
competition regime that technical assistance can improve. These include transparency,
coherence across nations, equal application, consistency, timeliness, and a rational basis
for substantive law. Establishing and enhancing these properties should be the
overarching goal of technical assistance but all too often they get buried under more
28
Mr. Asher’s remarks can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/asher.pdf
29
The Working Group has produced a report on these matters that can be downloaded from
http://www.internationalcompetitionnetwork.org/seoul/capacitybuild_sg4_seoul.pdf
12
easily measured but less meaningful performance indicators. Donors, providers, and
recipients must therefore collaborate to a greater extent to make more explicit the links
between objectives such as these and the technical assistance programs that are designed
and implemented.
Mr. Korsun’s second argument concerned measuring progress, both in the narrow sense
of measuring the quality of technical assistance but also in the broader sense of relating
good policies arising from successful technical assistance and improved efficiency to
important development outcomes, such as economic growth. This is, he argued, a rather
challenging task that the first subgroup of the CBCPI working group is taking on.
Measurement can also be furthered by the ICN in other ways, including acting as a
clearinghouse for national report and studies on related issues. The ICN could also act as
a repository for the many databases that have been created, both by national agencies and
by the international agencies. His final point touched on state aid. Here, there is a need
for new analytical concepts and tools that more logically relate the harm or potential
harm caused by bad policies to either better policies ex ante or better remedies ex post.
Mr. John Taladay, a U.S. lawyer, welcomed the Working Group’s activities and
contributions. He noted that the matters addressed by the Working Group would further
the development of national economies and promote the appropriate regulation of
international business. Mr. Taladay made three suggestions for the future work program
of the Working Group. He supported the Working Group’s existing program on technical
assistance-related matters and argued that transparency needed to be improved here. A
second potential area of inquiry concerned the priorities for “rolling out” competition law
in developing and transition economies. In his view, cultural factors, the state of the
judicial system, and the level of development were relevant considerations here, and
countries may have to choose between different types of enforcement activity. A third
matter worthy of further consideration is the development of the private bar in developing
and transition economies. In this regard, Mr. Taladay noted that the private bar plays an
important role in counseling clients not to break competition laws in the first place; a
reminder that much competition law-related work takes place outside government
agencies.
After these presentations the Chair of the Panel, Mr. Lowe, asked for interventions from
the floor. At this time, Mr. Pradeep Mehta, a representative of an Indian consumer
organization, made two observations. Namely, that consumers are a countervailing force
to businesses and vested interests. Moreover, the consumer movement can act as a watch-
dog, bringing anti-competitive practices to the attention of state officials. Mr. Lowe
concluded the session by noting that although there is no one-size-fits-all solution to the
creation of an efficient and effective competition law regime and that agencies’
collaborative efforts with consumer groups and with the private bar are crucial to the
creation of such regimes. After these remarks the session was formally drawn to a close.
The session on CBCPI was followed by a breakout session, in which participants
discussed topics for future work of different working groups in small groups. The
conclusions of the discussion were presented in the session for Approval of Work
Products and Future Work Plans, towards the end of the second day of the Annual
Conference.
13
Panel on Improving the Effectiveness of Competition Advocacy30
Ms. Sally Southey, the Canadian Competition Bureau’s Assistant Commissioner chaired
a panel discussion on improving the effectiveness of competition advocacy during the
Seoul Competition Forum 2004. The panel presented how 3 countries have effectively
used advocacy to promote competition policy: Australia, Canada and Korea.
Members were encouraged to consult with the Toolkit for Effective Advocacy developed
by the Practical Techniques subgroup on advocacy. The Web site with practical tips and
tools was unveiled at the 2nd ICN conference in Merida.31
Ms. Southey explained how strategic communications enhances enforcement in Canada
as it encourages conformity through education.32 Communications knits the three
elements of the Canadian Conformity Continuum together by ensuring that the public and
various stakeholders are aware of the law and the ramifications of non-compliance. In
Canada, there has been a direct correlation between the amount of media coverage and
the number of complaints received. Internal communications are critical to ensure that
employees are able to act as natural ambassadors for the organization. Strategic
communications to decision makers ensures that those controlling resource allocation are
aware of the pivotal role competition plays in the economy and its impact on individual
citizens.
Mr. Hak-Kuk Joh, the Vice-Chairman of the KFTC, emphasized the importance of
competition advocacy as it fosters a competitive culture by enhancing the understanding
of the benefits of competition in both the public and private sectors. Advocacy activities
organized by the KFTC include a variety of public education programs and PR activities
directed towards the Korean government, the private sector and KFTC staff. The KFTC
is an active participant in official meetings regarding government initiated legislation and
regulatory reform, and works with the government to improve anti-competitive
legislation identified in the process of competition enforcement. To enhance the public
understanding of competition, the KFTC has recently introduced a program that
encourages Korean businesses to voluntarily comply with competition law. The KFTC
has also helped to enhance the public’s understanding of its role and functions through
various publications and activities such as an annual court competition for university
students. To ensure that KFTC staffs are up to date on current competition issues, the
KFTC has conducted various training programs and holds a weekly forum where
employees can discuss various competition issues. To improve the future effectiveness of
competition advocacy, the KFTC is currently working on designating targets for
advocacy activities when establishing policies and on creating a PR plan for every policy
that has external implications.
30
Because this session took place during the Seoul Competition Forum, summary of this Panel was
prepared by the Panel itself.
31
Available in the ICN Information Library at:
http://www.internationalcompetitionnetwork.org/toolkit_intro.html
32
Slides available on the ICN Web site at:
http://www.internationalcompetitionnetwork.org/seoul/sally_seoul.pdf
14
To begin the discussion on the use of advocacy in Australia, Mr. Fred Hilmer, the
architect of the comprehensive National Competition Policy, addressed the conference by
way of a taped interview with Ms. Southey.33 Mr. Hilmer highlighted the importance of
distilling information into simple and powerful examples. He cautioned against using
technical and legal terms and recommended using concrete examples in dollars and cents
that consumers, politicians and the media could understand. To get support from all
levels of government, Mr. Hilmer stressed involving politicians in every step of the
process. His team visited and regularly consulted with officials and regularly used
examples that the politicians and their constituents would care about. The media also
played an important role in his experience because they kept reporting on competition
issues. Politicians like to deal with issues in the media and the media like to cover issues
on the minds of politicians, so Mr. Hilmer said it’s a cycle that advocates can use to their
advantage. By developing a strong framework and enriching it with stories, he was able
to get political and public support.
The former Chairman of the Australian Competition and Consumer Commission
(ACCC), Prof. Allan Fels, explained that he continued the work of Mr. Hilmer, spreading
stories of the benefits of competition during his tenure. Professor Fels frequently used the
media and emphasised the connection between effective enforcement and publicity. He is
of the view that the maximum publicity can be obtained from court cases as they have all
the elements of interest to the media: a specific situation that can be explained to people
and consequences for consumers that are easily understood. The media is usually
interested in the confrontation between the regulator and the business that is the subject
of the litigation and it is interested in the court verdict on what is right and what is wrong.
He spoke about being accessible to the media, even though sometimes it attracted
criticism. However, overall it is a very effective tool for deterrence and for reaching out
to consumers.
Next, Mr. Justice Konrad von Finckenstein, the former Canadian Commissioner of
Competition, addressed the audience by teleconference. He explained how he pushed for
legislative change to the Competition Act and worked to get three pieces of legislation
through the Canadian parliamentary system. Justice von Finckenstein stressed that it is
the Commissioner’s role to be a champion of competition and bring it to the forefront
with decision-makers, both elected and non-elected. He created a permanent amendments
unit at the Bureau and announced a policy of incremental amendments to keep
competition legislation up to date. He explained that timing is crucial for legislative
amendments. Proposed legislation should be introduced at the beginning of the legislative
session when there should be an empty legislative calendar. It is also necessary to foster
buy-in from elected decision-makers. An effective way to do that is to have a “populist
locomotive,” issues that speak to people such as fraudulent telemarketing and deceptive
contests. It is a good practice to develop a communications strategy and a “90 second
explanation,” which Justice von Finckenstein said should be used over and over again
with each stakeholder. Citing international precedents or parallels is also very powerful.
33
The video is available on the ICN Web site in the Information Library at:
http://www.internationalcompetitionnetwork.org/seoulpanel.html
15
Mr. Graeme Samuel, the current Chairman of the ACCC, explained that he has continued
to build on the advocacy tradition established by Mr. Hilmer and Professor Fels. Having
held many positions at various national bodies, including President of the National
Competition Council, Prof. Samuel understands the importance of reaching out to
decision-makers. However, he advocated a more conservative approach to using the
media than that adopted by Professor Fels.
Finally, Ms. Sheridan Scott, Canada’s Commissioner of Competition, spoke about the
need to understand the changing marketplace and the impact of technology not only on
enforcement but on advocacy. In her first few months on the job, Ms. Scott met with
stakeholders across Canada and heard the clear message that they were not aware of the
Competition Bureau and of competition policy. She strongly believes that if a
competitive market is to function properly, consumers must have accurate information for
decisions. She presented ideas on how the Internet could be used to disseminate
information since it crosses national boundaries and is available 24/7. Ms. Scott indicated
that one of her priorities is to widen and deepen the Bureau’s communications with
various stakeholder groups. She has appointed champions to reach out to different target
groups, such as consumers and businesses, small and large.
All of the panel presentations illustrated the importance and development of competition
advocacy in three very different jurisdictions where competition policy is starting to
become synonymous with a vibrant economy.
Antitrust Enforcement in Regulated Sectors Working Group
The session on antitrust enforcement in regulated sectors was the first on the second day
of the ICN’s Annual Conference. This session was chaired by Mr. Allan Fels, Dean of the
Australia and New Zealand School of Government and former Chairman of the
Australian Competition and Consumer Commission. Professor Fels noted that there were
a number of instances where competition policy and regulatory policy overlap and argued
that such matters are of great interest. He reminded attendees that at the Second Annual
Conference in Mérida it was decided to establish a Working Group on Antitrust
Enforcement in Regulated Sectors.34 This Working Group was given a two year mandate
to consider the following three questions: Under what circumstances can antitrust
authorities intervene in regulated sectors? What has been the relevant experience in this
regard? What factors determine the allocation of work between competition agencies and
sectoral regulators? The Working Group has issued an interim report and this panel
would hear from members of the three of the subgroups of this Working Group and from
four officials in other ICN members.
34
Further information about the activities of this Working Group can be downloaded from:
http://www.internationalcompetitionnetwork.org/aers.html
16
The first speaker on this panel was Mr. Alberto Heimler, Director of the Research and
Institutional Relations Directorate of the Italian Competition Authority.35 Mr. Heimler
introduced the report of the Working Group and made a number of remarks concerning
the relationship between regulation and competition laws. The very fact that all markets
have rules and regulations, he argued, implies that competition between firms and
regulation are inextricably intertwined. When one appreciates the many legitimate
reasons why nations introduce regulations (including measures to reduce transaction
costs, to address information asymmetries, to address externalities, to tackle distributional
concerns, and to influence national monopolies), it is not surprising that regulations are a
prominent feature of most economies. Moreover, the form of regulatory intervention
often influences the degree of inter-firm rivalry. For example, rules on property rights
and the enforceability of contracts facilitate the development of the private sector, not
least by encouraging firms to enter markets which has the effect of stimulating
competition.
Turning to the relationship between competition law and regulation, Mr. Heimler noted
that it can be complementary or substitutable.36 Even when competition law and
regulatory policies have distinct and independent objectives, they can still be
complementary. He gave the example of consumer protection measures that sought to
reduce the uncertainty faced by consumers as to the quality of a good. Such measures are
thought to raise the sensitivity of consumer demand to prices which, in turn, reduces the
market power of suppliers. In other situations, regulation can substitute completely for
competition law. The direct regulation of a monopolist’s price is a case in point.
Mr. Heimler concluded his presentation with some remarks about institutional matters
concerning the relationship between competition law and regulation, noting that one point
to bear in mind when comparing national experiences is that different institutional
arrangements can generate different results..37 The first chapter of the Working Group’s
interim report reports the primacy (or otherwise) of competition law in the constitutional
and legal arrangements of selected national jurisdictions and regional groups of nations
(such as the European Union.) Mr. Heimler also noted that once regulatory institutions
are created vested interests may emerge that oppose the enforcement of competition law
in a sector or the expansion of competition law disciplines into a regulated sector.
The findings to date of the subgroup on the enforcement of competition law in regulated
sectors were presented by Mr. Frédéric Jenny, Vice President of the French Conseil de la
Concurrence. Professor Jenny described how a questionnaire sent to ICN members and
the findings of several reports of OECD Roundtables formed the basis for this subgroup’s
report.38 The first finding concerned the number of regulated sectors in the economies of
the ICN’s members. As many as forty sectors are regulated, suggesting that sectoral
35
Mr. Heimler’s introductory remarks can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/heimler2aers.pdf
36
For further information on the substitutability and complementarity of regulation and competition law
and enforcement please see a report of this Working Group that can be downloaded at
http://www.internationalcompetitionnetwork.org/seoul/aers_intro_seoul.pdf
37
A report on the limits and constraints facing antitrust authorities intervening in regulated sectors can be
downloaded from: http://www.internationalcompetitionnetwork.org/seoul/aers_ch1_seoul.pdf
38
Further information on these findings can be downloaded from
http://www.internationalcompetitionnetwork.org/seoul/aers_ch2_seoul.pdf
17
regulation is more of a norm than an exception. The second finding was that state
regulation appears to be more prevalent in developing and transition economies.
Moreover, many mergers (and other corporate practices that might attract the attention of
competition law enforcement officials) occur in regulated sectors. For example, in
Mexico forty percent of mergers were in regulated sectors. Professor Jenny went on to
note that the report presents an extensive typology of the potential relationships between
competition law enforcement and sectoral regulation. It was suggested that, even though
this typology can undoubtedly be developed further, already the nature of the various
relationships between competition law and sectoral regulation is more complicated than
previously thought. Professor Jenny also noted that sectoral regulation is often
unnecessarily restrictive of competition, beyond what is necessary to eliminate market
failures and the like. Antitrust authorities have an important role to play in helping to
promote competition in regulated sectors and can take the lead in improving regulation,
he said.
Ms. Caroline Montalcino, Head of Competition and Litigation in the Office of the
Director General for Competition, Consumer Protection and Fraud (an office in the
French Ministry of the Economy, Finance, and Industry), presented the findings of the
subgroup concerned with the relationship between antitrust enforcement bodies and
regulatory agencies. Ms. Montalcino reported that a typology of the relationship between
these institutions was developed from the numerous contributions made by ICN members
to the subgroup. Ten forms of interaction between antitrust and regulatory agencies were
identified and grouped under three distinct headings.39 The first grouping of relationships
were distinctly informal in nature and involved contacts, the exchange of information and
officials, and staff training. A second set of relationships concerned the delimitation of
jurisdiction, including abstention by an agency, following from federal constitutional
structures or from the independent decision of an agency. The third class of relationships
was described as organized co-operation and includes, inter alia, the right to make
submissions, to hold joint proceedings, to mandatory consultation and referrals, and
access to appeal procedures. Ms. Montalcino’s presentation completed the reports of the
Working Group’s members. The discussions then turned to the national experiences of
four ICN members.
In his account of Indian experience, Mr. Vinod Dhall, Member of the Indian Competition
Commission, added another important dimension to the discussion; namely, the role of
competition advocacy by a national competition agency in influencing state (or sub-
federal) governments. India’s federal constitution specifies which responsibilities fall to
the federal and state governments separately, and which matters are concurrent
responsibilities. According to India’s constitution, competition law is a concurrent
responsibility. Even so, to date no state government has enacted a competition law. (In
this regard it was noted that the low level of awareness of competition law-related matters
accounts in part for the absence of state-level competition laws.) Even though no state
has a competition law many state policies influence the degree of competition in markets.
Three such influences were highlighted: state-owned enterprises with a dominant position
(the examples of housing development and inter-city transportation services were given),
39
For further details of these findings please see a report that can be downloaded at
http://www.internationalcompetitionnetwork.org/seoul/aers_ch3_seoul.pdf
18
state regulations on municipal ownership and the operation of commercial activities, and
anti-competitive state policies that favor certain corporate entities (such as the
widespread preferences given to small and medium sized enterprises.)
India’s recently passed competition legislation40 has a wide ambit and covers state
governments and central government departments (except sovereign activities). Mr. Dhall
went on to explain how the Competition Commission goes about attempting to influence
decision-making by state governments, recognizing that the latter are elected and have
their own assemblies. Mr. Dhall argued that this matter must be handled with care so as
to avoid confrontations. The principal objective is to alter the mindset of state
governments and typically it is not helpful to assume that the latter are deliberately trying
to violate the competition law. This was especially true when dealing with state laws and
policies that are of long-standing and were enacted for reasons unrelated to competition
policy.
The relationship between the Indian Competition Commission and central government
departments was even more complex. Although the Commission has the right to
investigate complaints about the competition-related aspects of central government
departmental policies, the preferred tool is competition advocacy. Such advocacy has
been useful, claims Mr. Dhall, in certain privatization policy and trade policy matters, but
again care was needed.
Mr. Dhall also noted that the central government has certain rights in respect of
competition law. First, the government can exempt activities from the ambit of
competition law. Second, the government can provide policy guidance to the Competition
Commission but it cannot influence the administrative practice or the funding of the
Commission. Finally, in extreme cases, the government can supercede a decision of the
Competition Commission.
Indonesian experience with respect to competition advocacy was described by Mr. Didik
Rachbini, Commissioner of the Indonesian Commission for the Supervisory of Business
Competition (KPPU).41 As Indonesia’s competition law was enacted in 1999, its
enforcement agency (the KPPU) is still very young. To understand the challenges faced
by the KPPU, Mr. Rachbini argued, one needs to appreciate the political climate in
Indonesia and the legacy of the Soeharto Regime, which governed that country from
1966 to 1998. It was argued that the structure of business in Indonesia (with all of its
implications for the intensity of inter-firm rivalry and the prevalence of anti-competitive
practices) is still substantially influenced by political decision-making and connections
which, in turn, are a reflection of long-standing cultural norms. Mr. Rachbini also stated
that Indonesian culture and politics still had feudal characteristics. Even in those sectors
where the state was liberalizing policies in the latter part of the Soeharto era, the granting
of licenses and other privileges made business dependent on the state and constrained
competition. As a result many sectors remain highly concentrated including wheat flour,
noodle production, glass, and palm oil. The KPPU monitors these sectors closely.
40
Specifically, The Competition Act, 2002 (No. 12 of 2003).
41
Mr. Rachbini’s powerpoint presentation can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/didik.pdf
19
Mr. Rachbini described one instance where the KPPU had intervened successfully in a
regulatory matter. The KPPU managed to persuade the Minister for Transportation to
cancel a minimum price regulation for airline tickets. The KPPU argued that airlines
should compete with one another to the ultimate benefit of consumers. As a result of this
and other measures the Indonesian public is slowly coming to appreciate the benefits of
competition between firms.
A number of current challenges facing Indonesia’s competition agency were identified.
Careful handling of cases and following procedures step-by-step is one. Another is the
different perceptions of other government bodies as to the purpose and value of
competition law, which diminishes the effectiveness of competition advocacy undertaken
by the KPPU. The third challenge is a bureaucratic culture that is inefficient and does not
favor the development of new institutions, such as the KPPU. Limited human resources
and experience is another constraint. Even so, the KPPU is taking steps to standardize
processes, to train staff, to put guidelines into practice, and to develop additional
legislation. A fifth challenge is to make alliances with strategic partners, including the
press.
The third country presentation was made by Mr. Adriaan ten Kate, Director General of
the Mexican Federal Competition Commission. Mexico’s competition law has few
sectoral exceptions, and many regulated sectors fall under the ambit of the law. Indeed,
approximately forty percent of Mexican enforcement cases and activities relate to
regulated sectors. Mr. ten Kate identified four types of intervention by the competition
agency in regulated sectors. The first two relate to standard enforcement activities
concerning mergers and acquisitions and monopolization. The third type of intervention
relates to the granting of concessions through public bidding. Lastly, the Federal
Competition Commission can make declarations that there is a lack of competition in a
given sector or faced by a specific firm. Mr. ten Kate noted that such a declaration was
made in five markets in the telephony sector where the Federal Competition Commission
took the view that the dominant incumbent firm faced insufficient competition. It should
also be noted that this declaration and related matters are currently the subject of legal
action.
Looking across Mexican experience to date Mr. ten Kate argued that, broadly speaking,
competition law enforcement and sectoral regulation has been complementary. He also
noted that for strategic reasons the Federal Competition Commission did not issue public
statements that directly contradicted or opposed ones made by sectoral regulators. Other
means have been found to communicate the views of the Federal Competition
Commission.
The relationship between the competition enforcement agency and sectoral regulators in
Zambia was recounted by Mr. Muyenga Atanga, Director of Consumer Welfare and
Education at the Zambian Competition Commission. Promoting the interests of
consumers is a principal objective of the Zambian competition statute, specifically the
Competition and Fair Trading Act. A wide range of activities are covered by this Act and
these include several regulated sectors. In those sectors jurisdiction is exercised
concurrently by the Competition Commission and by the sectoral regulator. The latter are
supposed to bear the interests of consumers in mind too.
20
One issue that has arisen in Zambia’s experience concerns the steps taken after a
complaint is received from consumers in a regulated sector. Which agency acts? This is
an important matter as consumers have high expectations and inadequate responses by
sectoral regulators have tended to tarnish the reputation of the Competition Commission.
Mr. Atanga gave the example of top-up cards for telephones. Consumers had lodged
complaints after the incumbent telecoms company failed to deliver on promises for free
services that were part of a promotional pricing scheme. The measures taken by the
relevant sectoral regulator were seen as inadequate and slow in coming by Zambian
consumers. Unfortunately, the public also concluded from this incident that the
Competition Commission was less than effective.
Another example demonstrates the consequences of asymmetries in resources available to
a competition enforcement agency and a sectoral regulator for the nature and degree of
co-operation between these state bodies. The example concerns pump prices for petrol
and diesel where it was felt by competition enforcement officials that the variation in
suppliers’ prices did not reflect underlying differences in costs. This economic activity is
also regulated by the Energy Regulation Board, which agreed to work with the
Competition Commission on this matter. Legal action was initiated but after a while the
sectoral regulator, whose activities are financed by a levy on the revenues of the energy
sector, withdrew and began advocating a regulatory response. Without enough financial
resources of its own to pursue the legal action, the Competition Commission reluctantly
sought undertakings from the oil marketing companies. These measures also fell well
below the expectations of Zambian consumers.
The experiences described above and others prompted the Zambian Competition
Commission to engage in discussions with sectoral regulators and parliamentarians. The
Competition Commission is seeking ways to expand their co-operation with sectoral
regulators beyond the current practice of exchanging memoranda of understanding to
include legal changes that facilitate such co-operation. Mr. Atanga closed by wondering
if matters in Zambia might have been made easier if the respective antitrust and
regulatory functions were allocated more clearly from the beginning.
Such was the interest in this Working Group’s activities that six interventions from the
floor followed. One intervener wondered if the Working Group could have sought
examples of competition advocacy from other jurisdictions and whether unsuccessful
cases might be as instructive as successful ones. Another intervener encouraged the
Working Group to explore in its future work whether certain regulations were appropriate
in the first place. The latter point was developed by another intervener who wondered if
the competition community should take a stronger stand against unnecessary sectoral
regulation.
An intervener from a transition economy noted that a confrontational approach to sectoral
regulators was unlikely to yield fruit. This speaker proposed that the ICN develop
guidelines for sectoral regulators so as to enable them to better take into account
competition-related obligations and to promote compliance mechanisms. The ICN
should strengthen competition advocacy in developing countries, stated another speaker.
A third contributor from a developing country proposed that the ICN assemble a list of
disturbing attempts by sectoral regulators and firms in regulated sectors to frustrate the
activities of competition enforcement agencies.
21
The panel closed with some further thoughts from the Chair, Professor Fels. The
Working Group had produced a very good report in an important area of concern for
competition agencies. In his view it is the regulated sectors that are most in need of
greater competition and, somewhat paradoxically, competition law tends to be applied
more rigorously in the more competitive parts of national economies.
Implementation Session
At the Annual Conference in Mérida in 2003, ICN Members decided that in the future an
Implementation Session should be held at the annual conference so as to analyze the
effects of the work done by the ICN on the laws and procedures of its members. The
Implementation Session took place for the first time at this Annual Conference. Mr.
Alberto Heimler, Director of the Research and Institutional Relations Directorate of the
Italian Competition Authority, chaired the session.42 The recommendations of the ICN
are non-binding, Mr. Heimler said. Nonetheless, they are not simply a theoretical exercise
and they serve as best practices for ICN members. In order to properly analyze
implementation experience, the session focused not only on successful implementation of
the ICN’s recommendations, but also on the difficulties and the problems encountered in
applying such measures.
Mr. William Rowley, a lawyer from Canada and active ICN NGA [, presented a report of
the Merger Streamlining Group that assessed the extent of implementation of the ICN’s
Recommended Practices on merger review. The report, which was based on responses
from a survey of competition agencies and private law firms, found a 63% average rate of
consistency with the Recommended Practices, with both new and old agencies at the top
of the list (including Mexico, Zambia, Germany, and Korea). Rates of consistency with
the four recommendations adopted in Mérida were as follows: Review Periods, 61% have
procedures for expediting reviews; Requirements for Initial Notification, a majority of
responding jurisdictions are consistent with each component of the practice, but for the
translation component for which there are equal numbers of consistent, partially
consistent, and inconsistent jurisdictions; Transparency; 86% with respect to the scope of
their jurisdiction, 71% regarding significant elements of their merger procedures and 45%
with respect to substantive principles; and Review of Merger Control Provisions, 80%
have plans to review their merger regimes. In addition, 24% have issued public
statements in support of the implementation of the ICN’s Guiding Principles and
Recommended Practices, and 38% have made or are in the process of making changes to
their laws, with an additional 15% indicating that such changes are under consideration.
The recommendations, Mr. Rowley said, have made a remarkably strong start, and it is
important that the momentum continue, to influence additional members to change their
laws and procedures accordingly. Mr. Rowley stressed the need to promote the work of
the ICN to a wider audience, in order to enhance its visibility outside member agencies
and advisors.
Mr. Daehyung Kang, Secretary General of the Korean Fair Trade Commission (KFTC),
then shared the experience of Korea in implementing the Recommended Practices. In
42
Mr. Heimler’s introductory remarks can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/heimler.pdf
22
order to achieve the ultimate goal of the ICN, which is the convergence of competition
law and policy, member countries need to steadily improve their own systems based on
practices recommended by the ICN, said Mr. Kang. He then presented the KFTC’s
implementation of the ICN’s merger-related Recommended Practices. According to Mr.
Kang, the KFTC’s merger review system is basically in line with all Recommended
Practices. As part of the measures to better align itself with these Practices, the KFTC
introduced notification thresholds that specify that at least two firms must have a
jurisdictional nexus to trigger notification. Mr. Kang then added that for the ICN’s efforts
to bring about effective results, implementation efforts are highly important.
Mr. Emil Paulis, Director of the Policy Development and Coordination Directorate,
European Commission, then summarized the implementation of the ICN’s Recommended
Practices and other suggestions by the European Commission. The Commission has made
legislative proposals and has made changes to some of its regulatory processes in line
with the Recommendations. For example, it has eliminated its notification deadline in
compliance with the Recommended Practice on Timing of Notification. It has also
engaged in coordination of enforcement efforts with other jurisdictions. The Commission
has also strengthened its advocacy role and has introduced a consumer liaison officer
inside the agency, to assist consumer organizations in contributing to pending cases. The
Capacity Building and Competition Policy Implementation Working Group is also likely
to have an effect on Community law and practice, by establishing a self-regulation
exercise. The older jurisdictions, added Mr. Paulis, should lead the younger ones by way
of example in implementing the Recommendations and applying the principles within
their laws.
Ms. Mariana Tavares de Araújo, General Coordinator in the Brazilian Secretariat of
Economic Law, Ministry of Justice, then introduced the experience of Brazil in applying
the Recommended Practices. Brazil has proposed changes before the legislature that
would bring its merger laws into increased compliance with the Recommended Practices,
but while waiting for the legislative decision-making, Brazil engaged in a number of
internal procedural reforms that bring its merger review process into closer conformity
with the Practices,. For example, the agency has introduced a simplified procedure
whereby parties may submit only basic information for deals that do not meet a certain
threshold. This has led to a reduction of 86 days for merger review periods in 2004. Ms.
Tavares added that Brazil has also benefited from the ICN report on competition
advocacy and that the ICN’s work is a constant reminder of urgent need for changes to
become more efficient and effective.
Mr. Menzi Simelane, Commissioner, Competition Commission, South Africa, focused on
technical assistance, and the ICN’s work in this area. Mr. Simelane stressed the critical
role that technical assistance has in the creation of an efficient competition regime, and
said that the work ICN is doing on technical assistance will provide important insights on
the process, and help to create more effective programs in the future. Technical
assistance, he said, facilitates an exchange of ideas and tactics to overcome enforcement
problems and it enables jurisdictions to have ready access to competition experts and to
other competition agencies. Seminars on specific topics, for example, are the best way to
advocate competition, as they allow a high level of interaction between senior staffs of
competition authorities. One–on-one visits also encourage an environment of co-
23
operation, without a need for formal agreement, Commissioner Simelane said. The work
of the Capacity Building Working Group encourages monitoring of donors and recipients
of technical assistance, which is necessary to ensure that the specific problems faced by
each jurisdiction are addressed is also essential for a competition culture to survive.
Mr. Randy Tritell, Assistant Director for International Antitrust at the U.S. Federal Trade
Commission, presented the report on the Monitoring and Implementation of the
Recommended Practices for Merger Notification.43 The Recommendations are valuable
in so far as they are applied in practice, said Mr. Tritell. The results of the report are quite
encouraging, as it seems that most ICN members with merger laws follow most of the
Recommended Practices. Some of the highlights of the report are as follows:
1. Ninety-four percent of ICN members with merger laws have some local nexus
requirement for notification, one of the elements of the Recommended Practice on
Jurisdictional Nexus.
2. Sixty-three percent of ICN members have merger notification thresholds that are
based only on objective criteria such as turnover in compliance with the
Recommended Practice on Notification Thresholds. Only 7% rely solely on market
shares.
3. Three-fifths of the members that prohibit closing during review have no filing
deadlines, in line with the Recommended Practice on Timing of Notification.
4. Most members conduct merger review within the time frame of the Recommended
Practice on Review Periods, with approximately 80% required by statute to complete
the investigation within six months.
5. Most members have a procedure for expedited review or reduction of information
requirements in non-problematic transactions, and nearly all jurisdictions provide
pre-notification guidance, as the Recommended Practice on Requirements for Initial
Notification advises.
6. Over 90% of members make case law and/or guidelines publicly available,
indicating close conformity with the Recommended Practice on Transparency.
7. A quarter of members with merger laws have made or have submitted or plan to
submit legislative changes to make revisions in their laws to increase conformity
with the Recommended Practices on Review of Merger Control Provisions.
Mr. Tritell also provided examples of jurisdictions that have revised their laws since
Mérida to conform with each Recommended Practice. The significant number of
jurisdictions that are taking active steps towards the adoption of the Recommended
Practices in their laws and internal procedures is encouraging, he said. Mr. Tritell then
turned to future work of the subgroup which could include devising additional
Recommended Practices; a study of barriers to the implementation of Recommended
Practices and techniques to surmount such impediments; and plans for a workshop to
43
Mr. Tritell’s remarks can be downloaded from
http://www.internationalcompetitionnetwork.org/seoul/04042122tritell.pdf and his powerpoint presentation
is available at http://www.internationalcompetitionnetwork.org/seoul/040421tritellslides.pdf
24
promote understanding and implementation of the Guiding Principles and Recommended
Practices. As has became his custom, he ended his presentation by citing a local proverb:
“Words have no wings, but they can fly a thousand miles.”
Mr. Heimler then closed the session, noting that even after only 11 months from their
adoption by the ICN, the Recommended Practices that were adopted in Mérida have had
a significant impact of the laws and internal procedures of many jurisdictions. Mr.
Heimler also emphasized that countries should not rely solely on legislatures to change
their laws, but should also use soft convergence to comply with the ICN’s Recommended
Practices.
New Work - Proposed Cartel Working Group
The session on a proposed Working Group on cartels opened with a speech by
Commissioner Mario Monti of the European Commission. Commissioner Monti
explained that setting up a working group on cartels would reinforce the role of the ICN
as an engine of international co-operation on competition law. This proposed new
working group would demonstrate the international competition community’s collective
intention to prosecute and deter cartelization. This initiative will ultimately have benefits
for consumers who are the victims of price-fixing and the like.
Commissioner Monti acknowledged that convergence in the cartel area may not come as
quickly as in mergers (where considerable progress has been made to date.) Difficulties
in reconciling leniency programs and in establishing agreed and appropriate modalities
for exchanging information may lead to slower progress in the ICN’s work on cartels.
Dialogue was very important here, especially on the tougher issues. With these
considerations in mind, Commissioner Monti encouraged broad participation in the
proposed Working Group on Cartels. It was particularly important to foster the
participation of experts and officials from developing and transition economies as this
would reinforce the image of the ICN as an international organization with an active and
diverse membership. Commissioner Monti also noted that resources were scarce in
developing countries and that this may constrain their participation in the proposed
working group and in the ICN more generally. He made clear his willingness to discuss
how to overcome such hurdles. Finally, Commissioner Monti paid tribute to the
dedication and efforts of cartel busters around the globe.
Before inviting the panelists to make their presentations, the Chair of this session, Dr. Ulf
Böge, President of the German Federal Cartel Office, offered the following remarks on
the mandate of the proposed Cartel Working Group.44 The work program of this group
would be divided into two parts.45 The fundamental issues associated with cartel
enforcement, including the general framework for enforcement, an elaboration on so-
called basic concepts, and the importance of cartel enforcement in developing countries,
would constitute the agenda of the first subgroup. The means by which cartel
44
Dr Böge’s introductory remarks can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/boge.pdf
45
The draft mandate of this Working Group can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/mwg_pcwg_seoul.pdf
25
enforcement procedures could be strengthened and the possibilities for international co-
operation in this area would be the topics tackled the second subgroup.
Dr. Böge also noted that the International Cartel Workshop will be absorbed into the
work program of the proposed Cartel Working Group. On a separate matter Dr. Böge
reported that, when discussions on the potential formation of a Working Group on Cartels
began, consideration was given to including abuse of dominance matters within the remit
of this proposed new activity. It was decided not to proceed in this direction for two
reasons. There was a concern that adding discussions on abuse of dominance would
overload the agenda of the proposed Working Group on Cartels. Moreover, it was noted
that cartels and abuse of dominance are two distinct anti-competitive practices and ought
to be treated separately. Dr. Böge assured ICN members that this decision did not
preclude the ICN from taking up abuse of dominance-related matters at a later date.
Mr. James Griffin, Deputy Assistant Attorney General in the U.S. Department of Justice,
began his presentation by arguing forcefully that tackling cartels must be an important
part of any antitrust enforcement program. Cartels are a fraud on consumers and
purchasing firms and are a scourge on national economies. Cartel members enter into
price-fixing agreements and the like knowingly and with a clear sense of the potential
benefits. There were few, if any, economic benefits to offset the harm done by
cartelization; harm that also includes dulling firms’ competitive edges and reducing the
incentive to innovate.
Mr. Griffin expanded on the proposed mandate of the first subgroup of this new Cartel
Working Group. As noted above, this subgroup would examine more fundamental
matters of cartel enforcement. The need for enforcement agencies to continuously
examine and re-examine the effects of their interventions was one reason why this
subgroup was needed. Another was the fact that the growing consensus over the past ten
years as to the importance of cartel enforcement had developed outside the ICN, and now
was the time to bring this discussion within the organization. Mr. Griffin went on to
describe the following four issues that the subgroup might profitably consider: the types
of conduct that nations consider to constitute hard core cartels; quantification of the harm
inflicted by cartels on purchasers; the means by which the growing international
consensus on cartel enforcement can be strengthened; and the development of principles
for more effective cartel enforcement that could include matters relating to transparency,
due process, and non-discrimination. Mr. Griffin closed his remarks by encouraging ICN
members and non-government advisors to get involved with the work program of the first
subgroup.
A Brazilian perspective on cartel-related matters was then provided by Mr. Daniel Krepel
Goldberg, Secretary of the Ministry of Justice. Brazil began implementing its anti-cartel
program in 2003. At first progress was slow in coming, but during the past one and a half
years there have been 178 investigations, several dawn raids were conducted, a number
of people have been prosecuted, and two cartels affecting over a billion reals of
commerce have been tackled. This record has been accomplished in spite of a number of
constraints, four of which were identified by Mr. Goldberg as being relevant to both the
Brazilian case and possibly to those of other developing economies. The limited budgets
available to competition enforcement agencies in Brazil is the first such constraint.
Moreover, after a twenty year history of government-induced and encouraged cartels, the
26
public has yet to fully appreciate the harm done by cartels. Thirdly, plea bargain concepts
are not widely accepted in the legal community and questions have been raised as to
whether an administrative agency should be allowed to offer leniency to those entities
and persons that have broken competition laws. Finally, matters may well have been
complicated by federal structures.
For the purposes of the deliberations of the proposed Cartel Working Group, these
considerations and others suggest that the challenge will be to develop a framework that
is general enough to accommodate the different starting points and legal traditions of
nations. Since the goal of enhanced enforcement against cartels was widely shared, Mr.
Goldberg argued that the real issue is to choose the best trajectory to reach the agreed
end. To ensure that any framework developed reflected all of the ICN membership, he
encouraged developing and transition economies to actively participate in the first
subgroup.
The proposed mandate of the second subgroup on enforcement techniques was outlined
by Ms. Denise MacKenzie, Senior Deputy Commissioner in the Canadian Competition
Bureau.46 In her view the mandate should focus on those issues that are of considerable
interest to national enforcement agencies and that might facilitate international co-
operation on cartel matters. Ms. MacKenzie argued that there was an opportunity here to
go beyond the OECD’s work on hard-core cartels and to draw on the experience of
enforcers in developing and transition economies as well as those in industrialized
economies. Indeed, the elements for potential study included a so-called trinity of
enforcement, namely, detection, dismantling, and deterrence. Within these broad
parameters, Ms. MacKenzie was open to suggestions as to the specific content of this
subgroup’s work program. Specific items could include the development of investigative
manuals, devising recommendations, conducting a literature review, or conducting a
survey of enforcement agencies. Ms. MacKenzie committed the second subgroup to
producing one written product by the time of the international cartel workshop in the Fall.
The need to develop mechanisms to promote international co-operation was emphasized
by Mr. Graeme Samuel, Chairman of the Australian Competition and Consumer
Commission (ACCC).47 Fighting cartels was priority for the ACCC and the members of
fourteen alleged cartels are or have been before Australian courts. Thirty more cartels
were under investigation. Even so, Mr Samuel noted that technological developments and
globalization had gone hand-in-hand with international cartelization, which has raised the
need for both international co-operation on enforcement and a reassessment of whether
the ACCC has the right sanctions, leniency program, and enforcement methods to break
cartels.
Mr. Samuel reminded ICN members that the ACCC will host the Sixth International
Cartel Workshop in November 2004, for enforcement officials. Mr. Samuel suggested
that this workshop could explore the means by which developing and transition
46
Ms. MacKenzie’s remarks can be downloaded at
http://www.internationalcompetitionnetwork.org/seoul/mackenzie.pdf
47
Mr. Samuel’s comments can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/samuel.pdf
27
economies can investigate national and international cartels, the relative merits of civil
and criminal penalties, as well as cross-jurisdictional issues.
A private sector perspective was provided by Mr. Calvin Goldman, a Canadian lawyer.
Mr. Goldman noted that private sector participation in the proposed Cartel Working
Group could be valuable, not least because many private lawyers have served as officials
in competition agencies. Such participation might be along the lines of that in Merger
Working Group, which has been widely regarded as constructive. Mr. Goldman argued
that it would be a mistake to view the business perspective as that of defending cartel
members. After all, businesses are often the victims of national and international cartels.
Businesses, by and large, do comply with cartel laws and want to see convergence in
legal standards and enforcement practices, such as leniency programs and the exchange
of information. In closing, Mr. Goldman remarked that the message concerning the need
to fight international cartels will be stronger if it is associated with business.
Seven interventions from the floor followed these presentations. Two recurring themes
were that the formation of the proposed Cartel Working Group was desirable and that the
participation of officials from developing and transition economies should be strongly
encouraged. One intervener from a developing country argued that the first subgroup
might collect an inventory of cartels in national economies and the means by which they
were prosecuted. This intervener suggested that close attention be paid to choice of
investigative techniques as the desirable mix of them may differ when tackling national
and international cartels. Another intervener wondered if the proposed Working Group
might consider the merits of national authorities establishing separate detection and
investigative units. The Working Group was cautioned against repeating the work that
had been undertaken in other international fora (such as the OECD and the WTO) by
another contributor from a developing country. This speaker also noted that focusing the
Working Group’s efforts on matters relating to the exchange of information would also
be beneficial to developing countries. The role and legal standing of export cartels was
another area for consideration by the Working Group, recommended another contributor
from a developing country. Opinion was divided as to merits of non-government advisors
in certain parts of the proposed Working Group’s activities.
Approval of Work Products and Future Work Plans
After the discussion of the proposed Cartel Working Group, ICN members convened to
approve current work products and to formulate future work plans. This session was co-
chaired by Dr. Chul-kyu Kang and Dr. Fernando Sánchez Ugarte. The discussion began
with reports of the chairs of several breakout sessions on various components of the
ICN’s work program for the coming year. These breakout sessions took place at the end
of the first day of this Annual Conference.
It was reported that the various chapters on investigative techniques in merger reviews,
which were circulated in the breakout sessions, had been well received by young and
established enforcement agencies alike. Suggestions were made that the agenda of a
forthcoming workshop in Brussels on investigative techniques in mergers should give
28
more weight to the exchange of information and to conducting investigations where there
is a paucity of data.48
The ICN’s membership unanimously adopted the four new Recommended Practices
prepared by the Notification and Procedures subgroup. The Practices were well received
and the subject of in-depth discussion in the breakout sessions as was the subgroup’s
proposed future work plan. Norman Manoim, Member of the South African Competition
Tribunal, summarized the breakout discussion on these issues, noting questions raised by
members and NGAs with respect to the Practices. For example, with respect to the
Practice on Procedural Fairness, a member agency questioned whether the Practice
required it to compel the judiciary to expedite its merger review procedures; but, was
comforted by the explanation that the subgroup drafted the Practice with this concern in
mind. As Mr. Manoim explained, the Practice was drafted to avoid encroaching on the
judiciary and its review process, noting that judicial review of merger cases should aim to
permit resolution of these cases within a time frame during which the merger remains
viable and focuses on what competition agencies should do in this regard. The
membership also supported the subgroup’s proposed future work, and provided a number
of suggestions to take back to the subgroup for further discussion.
Over seventy ICN members and non-governmental advisors provided responses to a
survey of the potential work plan of the Analytical Framework subgroup of the Merger
Working Group. Two projects garnered the most support, namely the development of a
mergers guidelines checklist and a study of the effectiveness of remedies in merger cases.
With respect to the former, the goal would be to develop a practical benchmark for
merger analysis rather than a prescriptive model. This work would be undertaken by a
core group of four ICN members and a draft text would be put to other ICN members and
to non-governmental advisors with the goal of a final draft being prepared for the next
ICN Annual Conference in Bonn. The remedies study would also be conducted by
another core group of four ICN members. The goals of this study are to synthesize
available experience and to devise practical advice for enforcement officials. The study
will be completed by the next Annual Conference.
It was decided to change the name of the Capacity Building and Competition Policy
Implementation Working Group to the Competition Policy Implementation Working
Group. Korea and Brazil’s Secretariat for Economic Monitoring were appointed as co-
chairs of this Working Group. In light of the discussions in the breakout sessions and
elsewhere, the work program of this Group will have three components. The first focuses
on ways to improve the effectiveness of technical assistance. The Group will conduct
interviews to prepare a report on how technical assistance projects are best designed, and
which models of technical assistance work best. In addition, the Group will provide an
electronic “bulletin board” with information on past, on-going and future technical
assistance projects. Concerns were raised as to the willingness of recipients of technical
assistance to criticize donors and about the responsibility for updating the bulletin board.
48
Further information about the 2004-2005 work plan for the Mergers Working Group can be downloaded
from http://www.internationalcompetitionnetwork.org/seoul/mwg_fwp_seoul.pdf
29
The second component of the Competition Policy Implementation Group’s work program
concerns the relationship between enforcement agencies and consumer groups.49 In the
upcoming year, the Group will examine programs and strategies designed to reach out to
consumers, including an assessment of the investigative and decision making processes
of the competition authority and an evaluation of their degree of accessibility to
consumers. Suggestions were made to reduce the number of surveys and conference calls
associated with these activities. A chat room could be introduced. The third component
concerns competition advocacy. Participants in this Group will try to develop objective
indicators to evaluate advocacy activities, and will use these indicators to conduct
detailed case studies. Questions were raised as to whether these case studies should focus
on specific sectors, and opinions on this matter were solicited. Finally, the Working
Group will consider new areas for future work, including topics such as privatization-
related concerns in developing and transition economies, and projects such as organizing
national and regional workshops on competition advocacy.
With respect to the future work program of the Working Group on Antitrust Enforcement
in Regulated Sectors, a number of suggestions were received in the breakout sessions. It
was argued that devising practical solutions should be a goal of this Working Group.
Suggestions had been received that the group study competition advocacy with respect to
state and local governments. Others claimed that another potentially fruitful line of
inquiry would be to study antitrust enforcement matters in a specific regulated sector in
developing and transition economies, such as banking. Identifying which functions are
conducted by which state agencies was said to be a useful place to start.
There was a consensus to create a Cartel Working Group that had a work program along
the lines discussed in the previous session of the conference. Considerable interest was
expressed in participating in the Working Group and numerous suggestions were
received as to the specifics of the work plan for the coming year. The Working Group
would formulate a specific timetable and a set of proposed deliverables soon, with the
goal of having tangible accomplishments by the next Annual Conference. The various
remarks concerning the participation of non-governmental advisors in this Working
Group were noted and an appropriate role for them would be formulated. One suggestion
was that such advisors play a role in the first subgroup. Participation in the second
subgroup (on enforcement techniques) might be on an ad-hoc basis. It was proposed and
agreed that the Co-Chairs of the new Cartel Working Group should present the ICN
Steering Group with proposals concerning the participation of non-governmental advisors
in this Working Group’s activities.
Closing Ceremony
Dr. Sánchez Ugarte began the closing ceremony by stating that this Annual Conference
of the ICN had exceeded his expectations. Membership had increased to almost 90
competition authorities. Even so, some authorities were missing, especially from
developing countries and transition economies, and efforts should be made to attract them
49
Further information about the proposed 2004-2005 work plan for the Competition Policy Implementation
Working Group can be downloaded from
http://www.internationalcompetitionnetwork.org/seoul/mwg_cpi_seoul.pdf
30
in the future. This may involve increasing financial support for their participation. Dr.
Sánchez Ugarte thanked the hosts for a very well organized conference and their
wonderful hospitality. He then congratulated and thanked the Working Groups for all of
their work. He noted that, as there was not sufficient time to present all of the important
work that had been done, in the future the Annual Conference should either be three days
long or structured differently. Dr. Sánchez Ugarte then thanked everyone for their active
involvement in this meeting of the ICN.
Dr. Ulf Böge added his thanks for an excellently organized conference, and hoped that he
would be able to meet the challenge of providing a similarly high level of hospitality next
year in Bonn, Germany, where the fourth annual ICN conference will take place. His
presentation was followed by a film of Bonn.50
The closing ceremony ended with a speech by the host, Dr. Kang, who noted that the
conference was held amid growing international interest in the work of the ICN. Great
strides had been made towards co-operation and convergence of national laws. The high-
level of intellectual discussion at the ICN will increase the standing of competition
authorities in their national economies. Furthermore, the ICN is leading the international
debate on issues concerning competition law and point. Chairman Kang thanked all the
attendees for their participation and support.
Conclusions
The third ICN Annual Conference carried forward the work of the ICN to a higher plane.
The ICN clearly has significant momentum behind it, which bodes well for its near- to
medium-term future. Like the two preceding conferences, the Third Conference was
filled with enthusiasm and ambition. Between the second and third Annual Conferences,
the ICN’s Working Groups devoted a considerable amount of their time and expertise
fulfilling the work programs agreed at Mérida. Many have observed that the resulting
papers from all of the subgroups are of a high quality and some have already
demonstrated their utility to enforcement officials and practitioners.
The output of the Capacity Building and Competition Policy Implementation Working
Group and the Antitrust Enforcement in Regulated Sectors Working Group was primarily
the result of collaboration between ICN members. The Merger Working Group benefited
from the extensive participation of non-governmental advisors, mostly legal practitioners
from around the world. Significant efforts have been made to encourage the participation
of developing and transition economies into all of the activities of the ICN. Recognition
of the difficulties faced by antitrust enforcement agencies in the latter jurisdictions is also
growing.
Inevitably some operational and substantive issues remain unsettled. Nevertheless, the
overall support for the collaborative, voluntary, and intensive dialogue that has
characterized the work of the ICN is impressive. Within the results-oriented agenda for
the coming year, the Fourth Annual ICN Conference, which will be held in Bonn,
Germany on June 6-8, 2005, promises to build upon the achievements of the first three
50
Dr. Böge’s closing speech can be downloaded from:
http://www.internationalcompetitionnetwork.org/seoul/ulfbogeclosingspeach.pdf
31
Annual Conferences and to continue efforts by ICN members and non-governmental
advisors to foster convergence and best practices in competition law and its enforcement
around the world.
32
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