Competition policy: promoting efficiency and sound markets

 

 

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Full text of the guidance
(pdf, 600KB)

All OECD countries rely on competition law and policy as a means to promote long-term growth, innovation and productivity in their economies. In competitive markets, companies who best meet their customers’ needs thrive, while those producing inferior or overpriced goods fail.  Competition therefore prevents inefficiency and favouritism.  Businesses will often try to avoid competition, for example by influencing governments to give them a protected position.  Effective enforcement of sound competition rules and advocacy can therefore keep business and government clean, and increased competitiveness can foster growth and development.

 

To promote competition effectively, Governments should adopt competition laws to prevent:

  • firms from colluding with their competitors to restrict competition either through price fixing or market-sharing arrangements;
  • firms with significant market power from abusing it to exclude competitors and to limit competition; and
  • mergers between competitors that are not justified by efficiency gains that would outweigh any loss of competition.

By preventing the unhealthy concentration of economic market power throughout the economy, competition law and policy contributes to a democratic system. This is best achieved by independent competition authorities with the necessary powers to enforce competition rules and to advocate sound competition policy throughout the government.

 

Priority checklist

These questions are addressed to policy makers looking to enforce sound competition rules and advocacy.


1. Do you have an independent and well resourced competition authority with the necessary powers to effectively enforce competition law?


2. Do you have a competition law that prohibits hard core cartel agreements and provides the necessary enforcement tools to uncover such illegal practices (e.g. leniency programs, investigative powers, etc.)?


3. Do you have a competition law that prohibits the anti-competitive conduct by a dominant firm?


4. Do you have a competition law that provides for the review of mergers or acquisitions between firms that can harm competition in your jurisdiction?


5. Does the competition law establish the consequences (e.g. fines and sanctions) of substantive competition law infringements so as to ensure sufficient deterrence?


6. Does your country provide a system that allows those who have suffered the consequences of competition law infringements to be compensated for their losses and for the damages they have incurred?


7. Does your jurisdiction allow for competition authority decisions to be reviewed by an independent judicial body?


8. Does your jurisdiction provide a sufficiently transparent and fair process for the actions of the competition authority?


9. Does the competition authority review and advise other parts of Government and the Legislature on proposed policies for their effect on competition?

 

 Download the Full text of the guidance (pdf, 600KB)

  

INSTRUMENTS AND STANDARDS

OECD Recommendation concerning Effective Action against Hard Core Cartels

OECD Recommendation on Competition Assessment

 

TOOLS, GUIDANCE, MANUALS

Guidelines for Fighting Bid Rigging in Public Procurement

Competition Assessment Toolkit

Best Practices for the formal exchange of information between competition authorities in hard core cartel investigations

International Competition Network: Anti-Cartel Enforcement Manual

 

REVIEWS, CASE STUDIES

Country reviews of competition laws and policies