Competition

Competitive neutrality in competition policy

 

It is a fundamental principle of competition law and policy that firms should compete on the merits and should not benefit from undue advantages due to their ownership or nationality.

Governments can affect the way markets function sometimes to the detriment of free competition. They can set procurement/tax rules or regulatory regimes putting private companies at a disadvantage compared to state-controlled or supported firms, or yet, they can participate in a market by providing services directly or through state-owned/controlled firms. Ensuring a level playing field is therefore key to enable competition to work properly.

Throughout the years, the OECD Competition Committee has taken different initiatives to analyse the topic from different angles.

Chronology of OECD Competition work

In 2004, a first in-depth discussion was held on the role of state in the market and the distortion of competition that advantages granted to state entities may create. it was noted that advantages could take the form of tax benefits, lower cost financing opportunities, direct subsidies, lax procurement rules and also formal exemption from competition law.

In 2009, a second roundtable discussion looked more closely at the challenges of enforcing competition rules against state-owned enterprises and at the broader policy landscape that can help government achieving competitive neutrality between publicly- and privately-owned competitors.

In 2012, the Competition Committee engaged in a joint project with the OECD’s Working Party on State Ownership and Privatisation Practices to map national practices and policies that address the issue of public-private competition and compiled a compendium of OECD Recommendations, Guidelines and best practices bearing on competitive neutrality which reviews existing OECD sources that address aspects or elements of competitive neutrality.

In 2015 the OECD gathered competition experts and representatives of other policy communities (investment, trade, tax, regulated industries and regulatory governance) to discuss in a hearing format challenges arising from state interventions in the market and what competition authorities could do to address the distortions that such interventions can create. A separate discussion in a roundtable format brought to light a variety of best practices and useful laws and instruments available around the world to address competition distortions. The exchange produced two documents:

The full set of documents issued for the 2015 discussions can be found below.

Documents and links

The size and sectoral distribution of state-owned entreprises, September 2017

For globalisation to work for all, you have to level the playing field first, 30 May 2017

Business and Finance Outlook, 2017

State-owned enterprises as global competitors: A challenge or an opportunity?, 2016

Note on competition and competitive neutrality for other policy areas, 2015

Inventory of competitive neutrality distortions and measures, 2015

Overview of OECD work on competitive neutrality

Competitive Neutrality: Maintaining a level playing field between public and private business, 2012

National Practices concerning competitive neutrality, 2012

Compendium of OECD Recommendations, Guidelines and best practices bearing on competitive neutrality, 2012

Competitive Neutrality and State-Owned Enterprises, Corporate Governance Working Papers, No. 1, 2011

State-Owned Enterprises and the Principle of Competitive Neutrality, 2009

Regulating Market Activities by the Public Sector, 2004

Access the full list of Competition Policy Roundtables

2015 HEARING ON HORIZONTAL CHALLENGES IN COMPETITIVE NEUTRALITY

Detailed summary • Compte rendu detaillé

Agenda & Speakers bios 

Download the Presentations

2015 ROUNDTABLE ON COMPETITIVE NEUTRALITY IN COMPETITION POLICY 

Panellists, papers and presentations

Key points from the discussion Points clefs de la discussion

Detailed summary Compte rendu detaillé 

Paper by the Secretariat • Note du Secrétariat

Download the Presentations

Pierre BUIGUES  Bio
Université de Toulouse, France
presenting Challenges arising from state interventions in the market: effectiveness and distortions of competition

 

Thomas CHENG Bio
University of Hong Kong, China
presenting Competitive Neutrality from an Asian Perspective

 

Nicolas PETIT Bio
University of Liege, Belgium
presenting Implications of Competitive Neutrality for Competition Agencies: A Process Perspective

Contributions from participants

Australia

Belgium

Brazil

Bulgaria

Chile

Chinese Taipei

Costa Rica

EU

Finland

Germany

Indonesia

Italy

 

Japan

Latvia

Lithuania

Netherlands

Norway

Peru

Russian Federation

Spain

Sweden

Ukraine

United States

 

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