Ögmundur Jónasson, Member of Parliament, has had some strong words to say in the public debate on competition matters in recent days, including in a column in DV on 7 October. Ögmundur's argument is unequivocal and thus lays the groundwork for a discussion on competition law and its application. It is only right to take that opportunity.
Ögmundur compares the Competition Authority to the guardians of communist orthodoxy in the Soviet Union of the last century. In a similar way, the Competition Authority now follows the doctrines of market fundamentalism with great dogmatism.
This harks back to the old misconception that the Competition Authority is a proponent of a particular political ideology, i.e. capitalism or libertarianism. Nothing could be further from the truth.
Competition rules are precisely put in place because experience shows that there is a danger that companies will harm the public interest with their conduct. Collusion or the abuse of a dominant market position leads to harm for customers and consumers and drives competitors out of the market. Competition law does both; it places limits on unfettered market liberalism and at the same time ensures that new and smaller companies can thrive and that consumers do not have to suffer from the dominance of powerful companies.
For this reason, over 120 countries worldwide have established competition rules with the same objectives and containing similar substantive provisions, regardless of the political ideology of each country. Thus, broadly speaking, comparable competition rules apply in most parts of the world; from Canada to China, Greenland to Greenland, Brazil to Botswana and Ukraine to Australia. Everywhere, people have thus reached the same conclusion: Competition law is necessary to promote a dynamic economy and improve the welfare of the public.
„A magnificent example of the Competition Authority's dogmatism“ thinks Ögmundur is „when the Icelandic Farmers' Association was fined heavily for discussing the pricing of agricultural produce at its own organisation's congress.“This refers to a 10 million króna fine that the Competition Authority imposed on the Farmers' Association in 2009. The authority's investigation had revealed that producers of chicken, eggs, vegetables and pork, which are not subject to public pricing, were using the platform of the agricultural assembly to collude on prices. However, discussions among farmers about the prices of products subject to official pricing were not considered to constitute an illegal cartel.
The decision was appealed to the Competition Appeals Board. The board upheld the decision, finding that the collusion was aimed at raising the prices of these agricultural products, to the detriment of consumers. However, the commission reduced the fines from 10 to 7.5 million króna. The farmers' association decided to accept the ruling and did not take it to the courts.
Do consumers think the matter in question is an example of the Competition Authority's „dogmatism“?
Ögmundur seems to be siding with large corporations, both at home and abroad, which have long fought for the same human rights as people. From this perspective, there are various concerns about the rule of law, such as the fact that the investigation of a case, the determination of an offence and the issuing of remedial orders are all carried out by the same body. Similarly, companies that have violated the public interest often claim that competition law is too unclear to be enforced.
It is the inherent right of companies to challenge competition law and regulations. The very essence of the matter is that companies have every opportunity to do so. They can therefore appeal a decision of the Competition Authority to the Competition Appeals Board and receive a ruling within a few weeks. Companies can then seek a judicial ruling on the validity of the Board's decision.
The administration and organisation of competition matters in this country is similar to that found in other states. It should be noted that the European Court of Human Rights has rejected the view that a similar system in Italy violates fundamental rights.
The legal certainty of companies in this area is therefore guaranteed to the fullest extent. However, in the discussion of the rights of companies, the public interests which competition law is intended to safeguard must not be forgotten.
Ögmundur also feels that the Competition Authority wants to tell the Althingi how the law should be. It is worth remembering that, according to the Competition Act, the Competition Authority is required to point out to the government ways to make competition more effective. The Authority is also required to draw the minister's attention to it if it considers that a provision of a law or government regulation contravenes the purpose of the Act or hampers competition. This is specifically provided for in Articles 8 and 18 of the Act.
The Competition Authority is therefore carrying out the function that the legislature itself has entrusted to it by law.
Among the lessons the crash taught us all was that we should emphasise consistency in the application of the law, respect the law, and ensure that regulatory bodies had sufficient funding.
Nowadays, however, just as before the crash, it is common to talk down to regulatory bodies. In a tone of moralising reproach, there is talk of reining in the „regulatory industry“ and reducing the „regulatory burden“. For some reason, the tracks are quickly covered up and the lessons from the crash seem to have been forgotten. Most painfully, the public interest is forgotten in this discourse.
It is everyone's right to have an opinion on the decisions and priorities of the Competition Authority at any given time. The Competition Authority's conclusions are no more infallible than any other human endeavour. It is, however, a serious matter when politicians themselves talk down the regulatory and supervisory framework established by Parliament. In that case, we cannot expect businesses and individuals to feel bound by the law.
Páll Gunnar Pálsson
Director-General of the Competition Authority
[This column was published as an article in DV on 10 October 2014.]
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