COMPETITION AND CONSUMER PROTECTION by Philippe Brusick

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COMPETITION AND CONSUMER
PROTECTION
by
Philippe Brusick
Former Head, Competition and
Consumer Policies Branch, UNCTAD
COMPETITION AND CONSUMER
PROTECTION
CONTENTS:
• COMPETITION LAW AND POLICY AIM
AT CONSUMER WELFARE
• COMPETITION AND CONSUMER
PROTECTION OFTEN RESPONSIBILITY
OF THE SAME AGENCY
• CONSUMER ORGANIZATIONS HAVE AN
IMPORTANT ROLE TO PLAY IN
CREATING A COMPETITION CULTURE
COMPETITION LAW AND POLICY
AIM AT CONSUMER WELFARE
• The objective of modern competition law is
the promotion of competition to increase
efficiency and benefit consumers
• Eg. Consumer interests are specific
concern of EU Law
• The UN Set of Principles and Rules on
Competition has Consumer Welfare
among its Objectives
THE OBJECTIVES OF MODERN COMPETITION
LAW
• Static Efficiency:
– Lower prices
– Better quality
– More choice
• Dynamic Efficiency:
– Efficient allocation of resources
– Management, processing and technological
improvements
– Product innovation
ALL TO THE BENEFIT OF CONSUMERS
COMPETITION AND CONSUMER PROTECTION
OFTEN PLACED UNDER THE SAME AGENCY
• Many Competition Laws cover both competition
and consumer protection issues;
• When separate laws exist, both are often
administered by the same agency;
• Consumer welfare is the ultimate objective of
competition law, but it needs to be
complemented by specific consumer protection
laws dealing with issues outside the scope of
Competition Policy and Law.
COMPETITION LAWS OFTEN COVER BOTH
COMPETITION AND CONSUMER PROTECTION
• Apart from indirect consumer benefits
discussed above, some competition laws
refer to consumer issues, such as:
– Obligation to indicate prices;
– Prohibition of resale price maintenance
– Prohibition of « bait-selling »;
– Prohibition of « pyramid-schemes »;
– Provisions on misleading and false
advertising, etc.
WHEN TWO LAWS EXIST, THEY ARE OFTEN
THE RESPONSIBILITY OF THE SAME AGENCY
• Some agencies cover both competition and
consumer protection: eg the USFTC and the
OFT in the UK;
• In some countries, such as Peru, the authority
(INDECOPI) is in charge of many issues,
including IPRs; and
• In other countries, the competition authority has
exclusive competition responsibility, eg the
German Bundeskartellamt.
IDEALLY, COMPETITION LAW SHOULD BE
ACCOMPANIED BY A CONSUMER LAW
Consumer protection involves numerous
issues that are not directly related to
competition, such as:
• Health and safety of consumers;
• Copyright infringement and false
advertising;
• Cheating on weights and measures;
• Over-indebtedness of consumers;
• Small-claims damage actions.
CONSUMER ORGANIZATIONS HAVE AN
IMPORTANT ROLE TO PLAY IN
CREATING A COMPETITION CULTURE
• The Benefits of Competition Policy are not easily
understood by consumers at large;
• Consumer Organizations need to be convinced
of the benefits of competition policy and law to
create a competition culture within the public;
• The role of Consumer organizations is essential
in creating a bottom-up approach towards
competition policy beneficial to consumers.
THE BENEFITS OF COMPETITION POLICY ARE
NOT ALWAYS OBVIOUS FOR CONSUMERS AT
LARGE
Consumers feel threatened by globalization
and open markets:
• Low-quality dumping or excessive prices;
• International competition may challenge
status-quo and restructure entire sectors;
• Before having a chance to benefit as
consumers, employees fear for their jobs;
• It is hard to trade-off promissed long-term
benefits for short-term hardship.
CONSUMER ORGANIZATIONS NEED FIRST TO
BE CONVINCED OF THE BENEFITS OF
COMPETITION
To create a competition culture within the public,
consumer organizations need first to clarify
essential issues:
• They need to be trained and to be convinced that
competition is not going to kill jobs without creating
more employment opportunities;
• That it is not going to downgrade work conditions
and salaries accross the board, but rather improve
income per capita;
• That open markets with competition law are not
going to wipe-out entire local industries, but develop
much more profitable new ones.
CONSUMER ORGANIZATIONS ARE
ESSENTIAL TO CREATE A BOTTOM-UP
APPROACH IN FAVOR OF COMPETITION
• Much has been said about « Competition
advocacy » by competition authorities, including
transparency of decisions, capacity building and
technical assistance for Government and
business alike, as well as Judges and the media;
• This needs to be supported by a broad based
effort to train consumer organizations to train
trainers and create a sound pro-competition
opinion within public opinion.
THANK YOU FOR YOUR ATTENTION
[email protected]
www.prbrusick.org
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