How Competition Enforcement Can Boost Economic Recovery

0

UNCTAD brings together competition authorities to discuss lessons learned from the COVID-19 pandemic and how to support the recovery of small businesses.

© wavebreakmedia/Shutterstock

Experts discussed how competition law enforcement should evolve to help post-pandemic recovery at the twentieth meeting of UNCTAD’s intergovernmental expert group on competition law and policy, which took place is held from July 20 to 22.

The pandemic called for a rethink of how authorities administered and enforced competition laws, the exemptions they granted, and the activities they permitted.

“Disrupted markets have forced competition authorities around the world to react quickly and show flexibility in the new context. Lessons learned can lead to more effective competition law and enforcement,” said Teresa Moreira, Competition and Consumer Policy Officer at UNCTAD.

An UNCTAD survey of competition authorities in 2021 revealed concerns about the dominance of large digital platforms, particularly measures that restricted participating firms’ freedom to deal with competitors or unreasonable fees and conditions imposed .

“The increased use of digital platforms during the pandemic has placed competition authorities in a regulatory dilemma, which raises the need to balance efficiencies and market concentration,” said Francis Kariuki, Managing Director of the Kenya Competition Authority.

New initiatives and priorities

The pandemic has also led competition authorities to implement new initiatives, such as procurement rules in Mexico.

“Public procurement through competitive processes, such as tenders, can be a turnaround mechanism for businesses,” said Ana Maria Redendiz Mora, commissioner at the country’s Federal Economic Competition Commission.

Another priority area is sustainability. Experts have said that if sustainability is a quality parameter of a product, companies will compete fiercely to produce more sustainable products through disruptive innovation, and consumers will have more choices.

But there can be tensions between competitive considerations and sustainability goals in some circumstances.

Experts said this area needs more analysis and examination of soft law initiatives to establish the do’s and don’ts when competition officials consider sustainability attributes.

Greater awareness is also needed in both developing and developed countries given the global challenge of climate change.

Support small businesses

During the meeting, Jihane Benyoussef, vice-president of the Moroccan Competition Council, said the council encourages preventive action by distributing a guide on compliance programs aimed at all economic operators, including micro, small and medium-sized enterprises (MSMEs).

She highlighted the need for policy-based solutions to address the challenges, special needs and demands of MSMEs.

Julian Palacin, President of the Competition Authority of Peru, also said that competition authorities have a key role to play in the economic recovery of MSMEs.

To support the recovery of MSMEs, UNCTAD provided technical assistance on competition policy under a joint United Nations project titled “Global Initiative for the Post-COVID-19 Resurgence of the Micro Sector, small and medium-sized enterprises” since 2020.

The project raised awareness among Member States and partners through regional and global dialogues around the world to encourage improved MSME-focused policy solutions, including market access and digital markets.

UNCTAD has also made recommendations to facilitate MSMEs’ access to open, fairer and more transparent digital markets.

It has also developed an online course to improve knowledge on the interaction between MSMEs and competition policies. The course explores the digitization of MSMEs, access to finance, and inter-agency cooperation, among other topics.

“Education and training are important in bringing to the fore competition policy enforcement interventions that promote MSME entry, growth and sustainable development,” said Carolyne Ariokot, Head of Financial Sector Deepening Uganda, a not-for-profit corporation.

Share.

Comments are closed.