Political Will, Legal Guarantees Necessary for Competition Law

Competition experts identified independence and accountability, effective goal and priority setting, resource allocation and rules of interpretation and application of the competition law as key elements of an effective competition authority. “This should be complemented by legal guarantees, and the political will to enforce relevant laws,” said Hasan Qayan, Head of the Competition Law and Consumer Policy Branch of United Nations Conference on Trade and Development (UNCTAD) at the 16th International Conference on Competition hosted by the BundesKartellamt and held in Berlin, 20 – 22 March 2013.

Institutional structures, cartel investigation, political economy, global enforcement, merger regulation and digital economy where highlighted in the discussions. Philippine delegate to the conference Atty. Lai-Lynn Angelica Barcenas, whose participation was supported by the Friedrich Naumann Foundation for Freedom (FNF), noted that the topics are relevant for countries that are developing its own comprehensive competition law, such as the Philippines. FNF has an office in Manila and has organized several forums on competition law in the country, which has long been pending in congress.

Rules of interpretation and basis for analysis in competition law enforcement were also significant points taken up during the panel discussions on the political content of anti-trust. Mr. Albert Foer, President of the American Antitrust Institute, discussed the expanding concept of economic values on antitrust enforcement beyond the core efficiency focus of the Chicago School, which was the dominant economic thinking for most of the past few decades. More and more, ideas of economic behavioralism, transaction costs and certain constitutional values of the American constitution such as free speech and the right to petition the government find their way into antitrust analysis. Other speakers also focused on this expanding concept that in the European Union even go beyond economic values: consideration of non-economic values, humanitization of anti-trust and consumer protection. Panel moderator Dr. Michael Hüther concluded that the dominant economic thinking has a significant impact on the acceptance of competition law. With the current evolution of economic thinking illustrated by the panelists, the question is whether the future will see a broader convergence of these different perspectives.

For Atty. Barcenas these are matters that should also be considered by Philippine legislators and policymakers as they craft a comprehensive competition law and policy. “After the law is passed, there will always be provisions that will be vague or ambiguous, conditions that cannot be foreseen at the time of the passage of the law. It is thus very important to outline a clear and coherent state policy that complements the country’s economic, development and industrial policies. This means that a greater effort should be made in analyzing the impacts of the proposed competition law on these other related policies, as well as existing realities of the Philippine market,” noted Atty. Barcenas.

On the discussion of merger regulation, the focus on tools and techniques in merger analysis and their evolution directly addressed some very practical questions on how to assess merger impacts. Various competition regimes in the US and Europe analyzed competition impacts through examination of the competitive effects of mergers on consumer welfare, hypothetical monopolies test, unilateral effects doctrine, regression analysis, public interest criterion, and cost-benefit analysis among others. Distinctions between the German and European approach as well as how economists and lawyers tackle merger analysis were also discussed. Among the conclusions drawn by speakers that included Dr. Joachim Bornkamm, Presiding Judge at the German Federal Court of Justice and Dr. Kai-Uwe Kühn, Chief Competition Economist, Directorate General for Competition of the European Commission, it was most noted that the best results have been achieved if lawyers and economists work together. “This emphasized the challenges that the Philippines face in implementing merger regulation in the context of competition regulation. This will require special skills for lawyers and the ability to understand and apply different disciplines, such as economics, in merger practice,” stated Atty. Barcenas.

The conference also spent a significant amount of time discussing the challenges posed by globalization and the fast development of the digital economy on competition regulation. Atty. Barcenas notes, “While critical, these issues are matters that seem to merit lesser attention in discussions among Philippine legislators and policy makers. Given the challenges of putting together a competition law that works for the Philippines, this is not surprising. However, there may be a need to give these issues equal attention. The keys are setting goals and priorities, determining when, how and under what conditions should the Philippine authorities address these.”

Atty. Barcenas concluded thus, “The experience of more advanced competition authorities can provide some very useful insights to young and fledgling competition regimes like the Philippines in crafting their own competition laws and policies. The rules of interpretation, tools and methods of analysis developed through the years can give some very practical guidance on how to approach competition regulation. However, having said that, it is very important for Philippine policymakers to first understand the unique conditions of the Philippine market, and the interplay of the country’s varied economic, development and industrial policies. If necessary, a re-examination of existing policies should be made, and gaps identified and addressed coherently.”

Atty. Barcenas expressed her appreciation of the effort in putting together a very satisfying and informative conference. “The Workshop for Young Competition Authorities was quite useful in focusing on the specific problems of young competition authorities. It might be helpful though in the next conference if some representatives of young competition authorities that have made significant progress in competition regulation would also be invited to be part of the panel. Other young competition authorities may be able to find some similar experiences with these advancing competition authorities that could help them address their own challenges,” observed Atty. Barcenas.

Atty. Lai-Lynn Barcenas is the Senior Trade Specialist of TA Trade Advisory Group, Inc. (Trade Advisory Group) and Special Counsel to Abad & Nuñez Law, a member firm of the Trade Advisory Group.