OECD’s Competition Open Day 2023 and two recent OECD workshops (Competition in Digital Markets: Recent Enforcement and New Regulations and Workshop on Procedural Safeguards in Competition Cases), as well as the latest roundtable session organised by the Joan Monnet South European Competition Law Center of Excellence at the Chamber of Commerce and Industry of Serbia (“Recent Developments in Competition Law and Policy in EU and CEE Countries: Open Issues and Challenges”) gave considerable food for thought on a range of key topics of interest and, on a practical note, confirmed some familiar views on the direction that competition law and policies are currently taking.
Discussions on enforcement in competition law and policy are an important trend and were the subject of discussion at the first panel session at OECD’s Competition Open Day 2023. In particular, enforcement is key in the context of competition law’s effectiveness in practice, not only through coercive (monetary and behavioural) measures taken by the authorities, but also in the context of broader awareness raising and compliance.
It’s clear that competition authorities around the globe have taken this struggle, not just “once”, but many times “more unto the breach”, taking an assertive approach to the fast-growing digital sector. These efforts have led to a flurry of investigations into tech companies (especially in the area of third-party data cases), as well as the ongoing development of competition-related technology to level the playing field. As stated during the OECD’s Competition Open Day 2023 discussion “Developments in Competition Enforcement – Enforcement Trends”, the Australian Competition and Consumer Commission (ACCC) is investing in the development of its own software and analytical tools, cartel screening technology and algorithms for market screening, with an emphasis on public procurement. It is working with an info-gathering intelligence unit to put together short industry profiles of undertakings to use as an internal resource that will bring together information on potentially anti-competitive practices. Meanwhile the French Competition Authority is currently implementing its Data-Cross Project, an EU-wide initiative designed to assess the risks of collusion and corruption, as well as money-laundering activities. This enterprise is set against the background of the Digital Markets Act and the growing market for both BigTech and SmallTech data-holding platforms. Again, the Spanish National Commission on Markets and Competition (the CNMC) is utilising algorithms that are capable of detecting patterns across the national public procurement portal and an encrypted channel to transfer relevant confidential information to the authorities. These are just a few of many examples and indicate that, without any doubt, watchdogs’ are sharpening their weapons for competition enforcement, although tempering this with a keen awareness that too much state intervention can create barriers to markets rather than reducing them.
Tying in to these topics was the second panel discussion at the OECD Competition Open Day 2023. Effective enforcement in competition matters also assumes the potential for the application of leniency and it might be said that leniency applications have been “going strong” and have secured a place in the reality of practical enforcement in competition law, not least because they allow control and “predictability (as stated by Mrs. Cani Fernandez, madam President of the CNMC) i.e. they provide a realistic idea of the penalties that the watchdog is likely to impose in certain circumstances. However, it has been reported that, of late, leniency is likely to be less “popular” as an approach, due to the increase in defences based on so-called “external factors” – something that generates a time-consuming burden for the competition authorities.
The shifting market trends relating to supply chain disruptions and shocks in the supply chain, as well as the broader long-running rise of market power and concentration, has meant that inflation and its interplay with competition law was the subject of another extremely interesting discussion at the third panel of OECD’s Competition Open Day 2023. Although there is clearly general agreement on the fact that competition authorities don’t have much to do with regards to inflation in the sense of policy changes, they are required, with increasing regularity, to assess the effect of inflation on specific matters, particularly due to the importance of price as a competition compliance indicator. In particular, the panel discussed the impact of the blurring of the price signal (and consumers’ inability to discern accurately between pricing by competitors during periods of inflation), the introduction of price-caps, and the application of enforcement measures in inflationary periods since price fixing must be more carefully monitored. There was also an interest in the area of combatting bid-rigging, as government budgets are facing increased strain, as well as the issue of companies worrying less about antagonising customers through modifying prices. Some thought-provoking views were presented during the discussion, including that a position of non-reactivity by competition regulators, which has in some ways distorted the market due to inflation, may even exacerbate this distortion further and that the competition agencies must therefore still wave a red flag when they perceive anti-competitive behaviour even in current market conditions.
If you’ve made it thus far through this post, then perhaps we can spark even more of your interest by adding that the headlights of the national competition authorities appear to now be particularly turning to the energy sector (for example, France’s competition authority’s sector study of docks for electric cars, the Australian ACCC’s focus on sustainability and public expectations, and the Spanish CNMC’s examination of renewables and prosumers as bottlenecks), in addition to the already intense attention on the digital and pharmaceuticals sectors. In conclusion it is very clear that the competition watchdogs, far from taking a step back, are determined to keep up with market innovations, particularly in these three fast-moving sectors.