Competition and Consumer Protection
Transcript of Competition and Consumer Protection
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COMPETITION AND CONSUMER
PROTECTION
by
Philippe Brusick
Former Head, Competition andConsumer Policies Branch, UNCTAD
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COMPETITION AND CONSUMER
PROTECTION
CONTENTS:
COMPETITION LAW AND POLICY AIMAT CONSUMER WELFARE
COMPETITION AND CONSUMERPROTECTION OFTEN RESPONSIBILITYOF THE SAME AGENCY
CONSUMER ORGANIZATIONS HAVEAN IMPORTANT ROLE TO PLAY INCREATING A COMPETITION CULTURE
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COMPETITION LAW AND POLICY
AIM AT CONSUMER WELFARE
The objective of modern competition law is
the promotion of competition to increase
efficiency and benefit consumers Eg. Consumer interests are specific
concern of EU Law
The UN Set of Principles and Rules on
Competition has Consumer Welfare
among its Objectives
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THE OBJECTIVES OF MODERN COMPETITION
LAW
Static Efficiency:
Lower prices
Better quality
More choice
Dynamic Efficiency:
Efficient allocation of resources
Management, processing and technological
improvements Product innovation
ALL TO THE BENEFIT OF CONSUMERS
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COMPETITION AND CONSUMER PROTECTION
OFTEN PLACED UNDER THE SAME AGENCY
Many Competition Laws cover both competition
and consumer protection issues;
When separate laws exist, both are oftenadministered by the same agency;
Consumer welfare is the ultimate objective of
competition law, but it needs to be
complemented by specific consumer protectionlaws dealing with issues outside the scope of
Competition Policy and Law.
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COMPETITION LAWS OFTEN COVER BOTH
COMPETITION AND CONSUMER PROTECTION
Apart from indirect consumer benefitsdiscussed above, some competition lawsrefer to consumer issues, such as:
Obligation to indicate prices;
Prohibition of resale price maintenance
Prohibition of bait-selling ;
Prohibition of pyramid-schemes ; Provisions on misleading and false
advertising, etc.
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WHEN TWO LAWS EXIST, THEY ARE OFTEN
THE RESPONSIBILITY OF THE SAME AGENCY
Some agencies cover both competition and
consumer protection: eg the USFTC and the
OFT in the UK;
In some countries, such as Peru, the authority
(INDECOPI) is in charge of many issues,
including IPRs; and
In other countries, the competition authority hasexclusive competition responsibility, eg the
German Bundeskartellamt.
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IDEALLY, COMPETITION LAW SHOULD BE
ACCOMPANIED BY A CONSUMER LAW
Consumer protection involves numerousissues that are not directly related tocompetition, such as:
Health and safety of consumers;
Copyright infringement and falseadvertising;
Cheating on weights and measures; Over-indebtedness of consumers;
Small-claims damage actions.
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CONSUMER ORGANIZATIONS HAVE AN
IMPORTANT ROLE TO PLAY INCREATING A COMPETITION CULTURE
The Benefits of Competition Policy are not easily
understood by consumers at large;
Consumer Organizations need to be convincedof the benefits of competition policy and law to
create a competition culture within the public;
The role of Consumer organizations is essential
in creating a bottom-up approach towardscompetition policy beneficial to consumers.
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THE BENEFITS OF COMPETITION POLICY ARE
NOT ALWAYS OBVIOUS FOR CONSUMERS AT
LARGEConsumers feel threatened by globalization
and open markets:
Low-quality dumping or excessive prices;
International competition may challengestatus-quo and restructure entire sectors;
Before having a chance to benefit as
consumers, employees fear for their jobs; It is hard to trade-off promissed long-term
benefits for short-term hardship.
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CONSUMER ORGANIZATIONS NEED FIRST TO
BE CONVINCED OF THE BENEFITS OF
COMPETITIONTo create a competition culture within the public,
consumer organizations need first to clarifyessential issues:
They need to be trained and to be convinced that
competition is not going to kill jobs without creatingmore employment opportunities;
That it is not going to downgrade work conditionsand salaries accross the board, but rather improveincome per capita;
That open markets with competition law are notgoing to wipe-out entire local industries, but developmuch more profitable new ones.
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CONSUMER ORGANIZATIONS ARE
ESSENTIAL TO CREATE A BOTTOM-UP
APPROACH IN FAVOR OF COMPETITION
Much has been said about Competition
advocacy by competition authorities, including
transparency of decisions, capacity building and
technical assistance for Government and
business alike, as well as Judges and the media;
This needs to be supported by a broad based
effort to train consumer organizations to traintrainers and create a sound pro-competition
opinion within public opinion.
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THANK YOU FOR YOUR ATTENTION
www.prbrusick.org