The Competition Authority held a briefing today on the impact of government on competition. The meeting was attended by directors of ministries and agencies, business interest groups, etc. The speaker was Ania Thiemann, an economist at the OECD's Competition Division.
The meeting addressed the importance of systematically assessing the impact of laws and regulations on competition in markets. Such an assessment can be carried out prospectively, i.e. when preparing new laws or regulations, or retrospectively, in which case the impact of existing laws and regulations on competition is assessed.
The OECD has developed a methodology for competition assessment (the OECD Competition Assessment Toolkit). The Competition Authority has recommended to the government that it adopt this type of competition assessment when preparing legislation and regulations, see Opinion No. 2/2009, Government Competition Assessment. These recommendations have not yet been acted upon.
This is the most effective way to simplify laws and regulations and thereby reduce the regulatory burden. The meeting demonstrated that this methodology has yielded significant results. For example, changes following a competitive assessment of laws and regulations in four key areas of Greek business are estimated to have yielded benefits equivalent to 2.51% of the country's GDP (2011).
Furthermore, research compiled by the OECD shows that reviewing laws and regulations in a specific market is likely to result in prices for goods or services being around 20% lower than they would otherwise be. It has also been shown that a large-scale initiative in Australia to reduce regulatory burden and increase competition led to a significant increase in productivity in the Australian economy. The meeting noted that following this initiative, productivity in Australia has remained consistently well above the OECD average. It is clear that such an initiative in this country would be capable of significantly increasing prosperity.
The meeting marks the start of a series of meetings by the Competition Authority with the business community, consumer/employee representatives and the government on competition matters. The meetings are intended to be a forum for discussion, where progress made and the most pressing challenges ahead will be addressed. In doing so, the Competition Authority is listening, gathering views and information that can be useful for prioritising its work and shaping its focus. At the same time, the Authority is creating a platform to communicate its views and guidance, with the aim of preventing infringements and reducing barriers to competition.
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