This presentation by CUTS’ SG Pradeep S Mehta was made during Break-out Session 2: Enforcement in the framework of the discussion on “Overcoming adversity and attaining success: Small and developing competition agencies” held at the 16th meeting of the OECD Global Forum on Competition on 8 December 2017. More papers and presentations on the topic can be found out at oe.cd/sda.

1. Working relations between competition
authorities and sector regulators
Pradeep S Mehta
Secretary General, CUTS International
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2. Overview
 About CUTS
 Regulating Markets: The Rationale
 Functions of Sector Regulators and Competition
Authorities
 Why the conflict?
 Subsequent challenges for competition agencies
 Examples
 Implications
 Possible approaches and Recommendations
 Points to ponder/Issues for deliberation
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3. About CUTS
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 Independent, non-profit, economic policy research and
advocacy organisation
 Working for improving equity and quality of competition,
regulation, investment, governance, consumer protection
and trade in the Global South
 Worked in > 35 developing and least developing
countries in the last 35 years
 Headquartered in Jaipur, present at grassroots, national,
regional and global level

4. Regulating Markets: The Rationale
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 Market regulation necessary to maintain fair
competition, address market failures, advance
public interest and to assist in transition to
competitive markets
 Two types:
1. Competition law
2. Sector-specific regulations

5. Functions of Sector Regulators and
Competition Authorities
Sector Regulators Competition Authorities
Stipulation of technical
regulation requirements and
provision of operational
guidelines for market players
Protecting the process of
competition through
competition enforcement
and advocacy
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6. Why the conflict?
Despite sharing the common goal of protecting and
enhancing social/economic welfare, several
overlapping factors causing conflict
 Different legislative mandates and perspectives vis-
à-vis competition
 Differences in the underlying methods and
approaches to competition (ex-ante and ex-post)
 Absence of clearly defined jurisdictional boundaries
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7. Subsequent challenges for competition
agencies
 In most developing countries, sector regulators were
established first and competition authorities came
afterwards
 Due to absence of clear legal provisions, sector
regulators tend to put forth arguments such as
superiority of institutional experience and capacities
 Sector regulators not bound to consult competition
agencies and vice-versa
 Young agencies facing resource constraints and
political backlash
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8. Examples
 Zambia
With SEC on share transfer cases
 Tanzania
Licencing by the Communication Commission
 India
Cartelisation by fuel cos; PNGRB or CCI?
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9. Implications
 Distortions to market competition emanating from
sub-optimal regulatory frameworks impacting the
economy
 Failure to take into account the regulatory context
and objectives while enforcing competition laws
 Forum-shopping
 Erosion/loss of market players’ confidence
 Detriment to the quality of grievance redress
mechanisms
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10. Possible approaches
1. Concurrent approach as in the UK
 Gives both competition authorities and sector
regulators mandates in competition matters, using
the same competition law
 Needs high degree of collaboration and mutual
understanding
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11. Possible approaches
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2. Collaborative Approach
 Each authority has a distinct mandate and
consultation from the other is sought
E.g. Singapore

12. Possible approaches
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3. Competition agency also oversees sector
regulations
 Use of Competition Authority to Administer Sectoral
Regulatory Rules as in Spain and The Netherlands
4. Mandatory consultation
 EU member states’ agencies and sector regulators
have to compulsorily consult each other as per
respective laws

13. Recommendations
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 One size does not fit all. Jurisdictions need to tailor
to their respective needs
 Irrespective of the approach followed, it should be
clearly laid out in the law itself
 Regular consultation and mutual understanding are
critical, for cooperation or concurrent approaches to
be successful
 CUTS’ Report on Harmonising Regulatory Conflicts
available here

14. Points to ponder/Issues for deliberation
 Technological disruption and grey areas of market
regulation
 Growing vertical and horizontal consolidation in
markets challenging traditional tools of competition
enforcement
 Cross-border market activity (blurring jurisdictional
boundaries) and lack of regional/international
consensus
Questions and comments can be directed to psm@cuts.org
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