The Competition Authority has today directed the Prime Minister to promote making it mandatory for the government to carry out a standardised competition assessment in connection with the preparation of legislation and government regulations.
These recommendations are set out in a special opinion, No. 2/2009, Governmental assessment of competition.
The aim of a competition assessment is to get public authorities to independently assess the impact that specific regulation has on competitive markets. It is considered that competition assessment can contribute to opening or keeping markets open, thereby preventing unnecessary public barriers to entry, i.e. barriers to new companies entering new markets or growing alongside larger companies.
The Competition Authority's proposals envisage a simple method for competition assessment. This uses four basic questions to determine whether a more detailed competition assessment is required. If so, there are six standard elements that need to be examined in more detail. By making the competition assessment standardised and simple, there is a greater likelihood that the government will utilise its benefits. The Competition Authority therefore considers it important that a specific chapter on competition assessment is added during the review of the Handbook on the Preparation and Drafting of Government Bills.
By reducing the anti-competitive effects of public regulation, effective competition is maintained and enhanced. Such action by the public sector contributes to a dynamic business environment in the long term and increases consumer benefits. This is particularly important during the economic recovery.
In recent terms, detailed arguments have been put forward that measures to maintain or enhance competition contribute to a faster recovery of the business sector and are therefore the right response to an economic crisis. This message, among others, can be found in the report of the Competition Authority. No. 2/2008, Robust development – opening up markets and strengthening economic activity, which was published in November 2008 and in a joint report the Nordic competition authorities„ “Competition Policy and Financial Crises – Lessons Learned and the Way Forward", published on 10 September 2009.
Background information
In the report of the Competition Authority No. 2/2008, *A Strong Framework – Opening Markets and Boosting Business Activity*, published in November 2008, specifically addressed the importance of the government assessing the impact of new laws and government regulations on competition, in order to avoid unnecessary barriers to competition. The matter was therefore reviewed in detail, including with reference to foreign law, and general recommendations were made to the government regarding it.
Following the publication of the Competition Authority's report, the Prime Minister's Office was informed that the Competition Authority intended to issue an opinion on the competition assessment of new laws and regulations, and was given the opportunity to provide a comment on the matter. The comments expressed a willingness to cooperate with the Competition Authority on ways to adequately protect effective competition during the preparation of legislation and the review of existing laws.
Under competition law, the Competition Authority is tasked with ensuring that the actions of public bodies do not restrict competition and with advising the government on ways to make competition more effective and to facilitate the entry of new competitors into the market. The Competition Authority does this, among other things, by issuing public opinions to the government.
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