Competition Advocacy

The Importance of Competition Advocacy 

Observance of Competition law, can considerably improve a country’s economy. However, the existence of a dedicated legislation for Competition law and a Regulator, is insufficient to drive Competition law compliance, particularly in developing countries. Practice of Competition law by a government, should be cultural. As such, Competition law and its Regulator must be innovative with competition advocacy strategies that ensure Competition law weaves into the fabric of economic considerations, particularly in countries transitioning from government-led economies to market-led ones. For example, efforts to transition the Nigerian economy to a market-led one are evident with the recent transition of NNPC from a national corporation to a private organisation, and the efforts to commercialise the proposed Nigerian Air.

The International Competition Network considers competition advocacy, as those activities conducted by the competition authority related to promoting a competitive environment for economic activities through non-enforcement mechanisms, mainly through its relationships with other governmental entities, and by increasing public awareness of the benefits of competition (International Competition Network (ICN), Advocacy and Competition Policy 25 (2002).

A strong competition culture helps to enhance the effectiveness of competition enforcement, and people imbibe a competition culture through competition advocacy. Competition advocacy must include educating other government agencies, the Judiciary, economic agents, and the general public about the benefits of competition to society and the role of competition law and policy in promoting societal welfare (Fels, Allan and Ng, Wendy, Rethinking Competition Advocacy in Developing Countries (2013). Competition Law and Development (D Daniel Sokol, Thomas K Cheng, and Ioannis Lianos, eds, Stanford University Press), 2013, Available at SSRN: https://ssrn.com/abstract=2674421).

In fact, competition advocacy is so important that, in Hong Kong, there is a docudrama series which airs on TV weekly, dedicated to competition advocacy. Without effective competition advocacy, businesses will not call out other businesses for harmful anti-competitive behaviour, because of their limited understanding of what is a Competition law violation.

Currently, competition advocacy in Nigeria is reactive, whereby the relevant agency, institution, or government consults the competition authority for their input on matters that require a Competition law cherry on top of a massive policy or regulatory cake. These will include the Competition law Regulators providing opinions and recommendations, making submissions on draft legislation and regulations, meeting stakeholders and workshops. However, these types of competition advocacy methods could be more effective in developing countries with strong political influence over the country’s national laws, or against governmental institutions and agencies that prioritise the success of their objective over the overriding economic objective of the country. These type of competition advocacy strategies, for example, a recommendation or an opinion, are only good until it is countered by an existing anti-competitive legislation or a competing policy objective backed up by a solid political influence, such as government involvement in the economy through a State-backed public enterprise that has monopoly over a sector. Nigeria, for example, has traditionally based its economic policies on direct government control. This is changing slowly, however, which presents good timing for strong and speedy competition advocacy efforts.

An Additional Approach 

Rather than general actions that competition agencies might take to influence competition divisions within the government through reactionary consultations, competition advocacy could be a comprehensive program targeting underlying anti-competitive laws (Fels, Allan and Ng, Wendy, (Supra) Page 193).

Competition agencies could be proactive in championing projects for the reform of laws and policies that directly impact the ability of businesses to compete equally in areas such as international and inter-State trade, intellectual property, foreign ownership and investment, tax, small businesses, public and private ownership, public procurement, and bidding for monopoly franchises (Fels, Allan and Ng, Wendy, (Supra) Page 193). The Competition Regulator could structure such underlying competition review across the various levels of government, the Federal and State Government, and several sectors, against a competition checklist such as competition neutrality whereby governments ensured that their publicly owned businesses would not enjoy any net competitive advantage because of being publicly owned.

Also, the Nigerian Competition Regulator could make these reforms in light of the Federal Competition and Consumer Protection Act objectives, which include promoting and maintaining competitive markets in the Nigerian economy, promoting economic efficiency, protecting and promoting the interests and welfare of consumers, by providing consumers with wider variety of quality products at competitive prices; prohibit restrictive or unfair business practices which prevent, restrict or distort competition or constitute an abuse of a dominant position of market power in Nigeria; and contribute to the sustainable development of the Nigerian economy.

An aspect of competition advocacy could also champion the introduction of Competition law across Nigerian Universities as a course of study in the Law and Social Science Faculties. Many countries with active competition regimes have Competition law courses, at various levels of studies. This type of strategic advocacy will significantly increase the number of competition advocates in the country, facilitating a more robust enforcement environment.

Also, quite important is structuring the court system to deal with competition infringement actions. Because competition infringements are usually on a broad scale, harming many consumers, in the US, there is a robust competition class action regime dedicated to dealing with competition infringements on a large scale. In the UK, an emerging competition class action regime, allows many people to seek redress against anti-competitive behaviour. These types of class actions support competition regulatory efforts, through private enforcement. With the increasing growth of the litigation funding industry, this is a route to building significant traction in creating a competition-conscious environment. For example, in the UK, several class actions are challenging big tech, financial, transport, and environment companies for abuse of dominance practices causing consumers to pay excessive and unfair prices for goods and services. These actions act as a check on antitrust violators, due to the likelihood of heavy fines imposed for competition violations.

Competition advocacy has many dimensions, that could create good results. Competition advocacy strategies, will not immediately correct every anti-competitive wrong. However, it is a route through which every step taken in the right direction, will lead to the desired destination of an active competition-conscious environment with ripple effects on the economy.