This presentation by Sean Ennis, Director of the Centre for Competition Policy and Professor of Competition Policy at Norwich Business School, was made during the discussion “Independent sector regulators and competition” held at the 68th meeting of the OECD Working Party No. 2 on Competition and Regulation on 2 December 2019. More papers and presentations on the topic can be found at oe.cd/isrc.

1. Independent sector regulators
& their relationship with
competition authorities
Professor Sean F. Ennis
Director of CCP and Professor of Competition Policy, NBS
University of East Anglia
www.competitionpolicy.ac.uk
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2. Overlapping objectives, potential
inconsistencies
• Regulator and competition authority have overlapping
objectives
• Competition often furthers consumer welfare objective of regulator
• Stimulate more effective competition through better regulation,
such as through
• interventions to tackle asymmetric information
• limits on the exploitation of behavioural biases
• reducing barriers to entry and
• setting standards for access, portability or interoperability where
appropriate.
• Potential inconsistencies or externalities
• Protect against expropriation, ensure stability, diversity of voice
• Public interest is broader than consumer welfare
• Conflicting decisions
• Anti-competitive regulatory measures
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3. Principle-based laws for
regulators
• When regulation is difficult to change, adapting regulation
to new market circumstances is particularly difficult
• In sectors with high technological change and uncertainty,
sector regulators may be more effective with “principle-
based” laws that allow regulators the flexibility to adjust
their precise rules in light of evolving circumstances
• Regulators can then issue secondary legislation that clarifies
application of law and creates business certainty
• Regulators can adapt secondary legislation more easily than
updating their governing law
• Competition authorities already benefit from this flexibility
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4. Independent regulation rationale
applies to “untraditional” sectors
• The sectors subject to independent regulation may usefully
include other sectors beyond those most traditionally associated
with independent regulation
• Self-regulation exists in many sectors
• Cost-benefit judgment needed when deciding on independent versus
government- or self-regulation
• Targeted
• Lower costs
• Subject matter expertise
• May create or sustain market power
• Sectors to consider include
• Ports
• Education
• Finance (fund transfer, jointly owned mortgage guarantors, alternative payment
system)
• Professions
• Competition authorities can advocate for more independent
forms of regulation
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5. Routes for ensuring consistency
between independent regulators and
competition authorities
• Ensuring consistency and convergence between sector regulator and
competition authority objectives and actions is important
• Difference in objectives between a regulator and competition authority
• Difference in substantive rules
• Difference in procedural rules and information collecting abilities
• Difference in evaluation
• Irony: independence can make ensuring such consistency through direct
co-operation a challenge
• Multiple mechanisms exist for achieving or encouraging such
consistency
• Organisational structures for co-operation
• Integration
• Concurrency
• Common appeal mechanism
• Co-operation instruments
• Some combination of these merits consideration by designers of
competition policy regimes
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