Competition and Consumer Protection

8/8/2019 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

[email protected]

www.prbrusick.org

Competition and Consumer Protection

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