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Tools for Addressing Competitive Neutrality – Spain – June 2019 OECD presentation

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This presentation by Spain (CNMC), was made during the presentations on “Tools for Addressing Competitive Neutrality” held at the 67th meeting of the OECD Working Party No.2 of the Competition Committee on 3 June 2019. More information on the topic can be found at ww.oecd.org/competition/competitive-neutrality.htm.

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Tools for Addressing Competitive Neutrality – Spain – June 2019 OECD presentation

  1. 1. Competition advocacy beyond advice – challenging restrictions to competition in regulation Joaquín López Vallés Director, Advocacy Department OECD Competition Committee - Working Party 2 3 June 2019
  2. 2. Competition advocacy… refers to… the promotion of a competitive environment by means of non-enforcement mechanisms, mainly through its relationships with other governmental entities and by increasing public awareness in regard to the benefits of competition. www.internationalcompetitionnetwork.org/advocacy 2
  3. 3. Why should competition agencies have a focus on the public sector? Proposition 1: Public intervention can be as harmful for competition as anti- competitive behaviour - Legal barriers to entry/expansion/competition - Public/State aid - Public procurement Proposition 2: Competition authorities are well placed to advocate pro- competitive regulation - Independence from Government/private interest - Economic and legal specialization
  4. 4. Addressing competitive neutrality – traditional tools Ex ante intervention Ex post intervention Binding instruments Quasi-binding instruments Non-binding instruments Regulatory reports Market studies
  5. 5. Addressing competitive neutrality – additional tools Ex ante intervention Ex post intervention Binding instruments Regulatory reports (if mandatory) Market studies (if mandatory) Quasi-binding instruments Court challenges (active capacity) Non-binding instruments Regulatory reports Market studies
  6. 6. Active capacity by the CNMC – legal basis 2005 White Paper on the Reform of the Spanish Competition System 2007 Competition Law – grants the CNMC legal active capacity to challenge before courts administrative acts and regulatory provisions of a rank lower than a law that raise obstacles to effective competition 2013 reform of the Competition Law – maintains active capacity 2013 Law on Market Unity – additional legal active capacity for the CNMC to challenge before courts administrative activity and regulatory provisions that raise obstacles to the freedom of movement or of establishment of goods and services
  7. 7. Active capacity by the CNMC – main features - Ex officio capacity - All sorts of regulatory provisions and administrative activity Of a rank lower than a law - All Government levels i.e. central, regional and local
  8. 8. Active capacity by the CNMC – legal test - Restrictions to competition …but not elimination of competition - Lack of necessity i.e. the restriction is necessary to protect a legitimate general interest - or Lack of proportionality i.e. there may be less restrictive means to achieve the intended public interest goals
  9. 9. Active capacity by the CNMC – stats 0 0 0 2 0 1 0 1 4 1 2 6 1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 By year of challenge 7 6 2 1 1 1 Tourism Transport Retail Agriculture Energy Public procurement By economic sector By Government level Central Regional Local
  10. 10. Results and lessons learned Outcome of challenged cases: - 7 cases with complete victory – i.e. bad regulation repealed - 11 cases pending in courts Big-picture effects: - Disciplinary effect on the public sector - Improvement of advocacy by the CNMC

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