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Competition Law Toolkit : Competition, Privatization, and Regulation
E. Sector-Specific Regulator or Competition Authority?A further question is whether—even if there is a case for moving away from ex ante regulation to the application of normal competition rules—the sector-specific regulator, with its knowledge of the industry, should exclusively retain the jurisdiction to apply the competition rules, or it should give this task to the competition authority. An alternative to this would be to allow the sector-specific regulator and the competition authority to share these functions on a concurrent basis.
The sector-specific regulator will have spent years working with the industry in question, and have detailed knowledge and understanding of the products and technology, the economics of the sector, and the stakeholders. The competition authority may have almost no knowledge of these matters at all. On the other hand, the competition authority will (hopefully) possess an overarching sense of competition policy, a knowledge of the case-law as it has been generally applied across the economy, and will be in a position to understand how a particular complaint (e.g., in telecommunications) compares with similar complaints elsewhere. A sector-specific regulator with exclusive jurisdiction in competition law matters within its sector may continue, in effect, to apply the ex ante rules with which it is familiar, albeit within the framework of competition law. A competition authority may fail to understand the economics of a particular sector and therefore apply general competition law in an inappropriate way. These dangers argue against exclusivity. So too does the difficulty of deciding, when exclusive jurisdiction is appropriate, just how to define the exclusivity: in a converging, multi-media world, for example, where does one decide what should be within the exclusive competence of the regulator for electronic communications? The problems outlined in the previous section suggest that concurrent rather than exclusive jurisdiction has much to commend it, if this means that the sector-specific regulator and the competition authority can find ways of harnessing their respective talents. However, concurrency can cause confusion and uncertainty, not only for the authorities themselves but also for other relevant stakeholders. For this reason, there is much to be said for devising institutional arrangements that ensure that unnecessary jurisdictional problems are avoided. An interesting feature of the Competition Act 1998 in the UK is that concurrent powers are given to the OFT and the sectoral regulators to enforce the Chapter I and Chapter II prohibitions that deal with anti-competitive agreements and the abuse of dominance, respectively. In their respective spheres of influence, the regulators enjoy concurrent powers. For the regulators, the availability of the Competition Act powers raises the interesting dilemma of whether to use the Act against anti-competitive behavior, or whether to enforce the specific provisions of the regulated company's license. As far as the Competition Act itself is concerned, provisions have been put in place to ensure that concurrency operates in a satisfactory manner. The Act deals with this issue in Section 54 and Schedule 10. The OFT, in conjunction with the regulators, has published a guideline on Concurrent Application to Regulated Industries [ PDF ]. Following a DTI consultation document, the secretary of state has adopted the Competition Act (Concurrency) Regulation 2000, and an amended guideline has been published in consequence. The revised guideline provides the best picture of the operation of the concurrency provisions. It explains that the regulators have the same powers as the OFT, save that only the latter can issue guidance on penalties and make amendments to the OFT's rules. It describes the purpose of the Concurrency Regulation and explains the role of the Concurrency Working Party (CWP), which is chaired by a representative of the OFT and brings together officials from all the regulators. The CWP discusses, among other things, general principles and information sharing, the guidelines, and disagreements over who should exercise jurisdiction in a particular case. The proceedings of the CWP are confidential, and no minute of its meetings is made publicly available. The guideline considers how cases will be allocated: in the event of a dispute on jurisdiction, the matter will be referred to the secretary of state. It can reasonably be assumed that this will happen only in exceptional cases. A further example of cooperation between a competition authority and a sectoral regulator is the protocol [ PDF ] in the Netherlands between the Dutch Competition Authority and the Commission of the Independent Post and Telecommunications Authority. Section 87 of the Singaporean Competition Act of 2004 makes specific provision for cooperation between the Competition Commission and other regulatory authorities on competition matters.
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