BRICS leaders call for joint anti-cartel enforcement

Global Competition Review, November 21, 2013

Top officials from the BRICS competition authorities today called for the creation of formal coordination mechanisms between the agencies. Katy Oglethorpe in New Delhi

Speaking at the 3rd BRICS International Competition Conference in New Delhi today, Tembinkosi Bonakele, the acting commissioner of South Africa’s Competition Commission, said the BRICS countries (Brazil, Russia, India, China and South Africa) have a “responsibility” to cooperate in both antitrust enforcement and merger control.

He said the BRICS enforcers should develop a programme in between conferences to improve coordination. The programme should include training, staff exchanges, and joint protocol on certain behaviour, he said.

Fellow panellist Igor Artemiev, head of Russia’s Federal Antimonopoly Service, said the global interests of all countries, in terms of cartel enforcement, were identical. He called for the creation of a global anti-cartel agency, beginning with coordination between the BRICS countries. The enforcers could draw up both a white paper dealing with best practices and a red paper dealing with worst practices, he said.

“We should all become more transparent and open,” he said.

The panellists discussed the issues and challenges of enforcing competition law in growing economies.

Chairing the panel was Geeta Gouri, member of the Competition Commission of India (CCI). She said the BRICS members were combating both the global recession and the “heady winds of gated globalisation”, where governments were showing a greater tendency towards protectionism.

Bonakele, in one of his first public appearances since replacing Shan Ramburuth as head of the commission, said in South Africa the issue of industrial policy versus competition policy is “back on the table”.

In a country which suffers from 35 per cent unemployment, there are increasingly calls for the authority to consider job creation and the development of local industries in its investigation and merger reviews. “This is not an unreasonable call,” said Bonakele.

While competition authorities should not be beholden to the government, said Bonakele, neither can they be “loose cannons who claim independence without accountability”.

Competition policy cannot exist in isolation, he said, and each BRICS enforcer faces the need to balance competition law with its government’s political and economic policies. Competition authorities, he said, “cannot afford to shy away from the debate”.

Ashok Chawla, CCI chairman, spoke of the difficulties of educating businesses and consumers about the new competition law landscape.

Competition law in India, said Chawla, “suffers from a perception that it is not business friendly”. Businesses view the law as an “albatross round their neck”, and their first reaction to enforcement is “‘Why me? Pick on someone else’,” he said. Meanwhile, while consumers broadly welcome competition law, they have an unrealistic expectation that the Competition Act can deal with all consumer issues, said Chawla.

Chawla said the authority also faced delays from lawyers, who act out of a wish to convert the CCI from an administrative body into a “hugely litigious, court-like environment”. Cases, he said, dragged on as lawyers use every method possible to resist potentially adverse decisions.

It will take a while for the CCI to gain credibility, said Chawla, and for the education system to meet the needs of staffing the new authority. The authority needs to constantly adapt quickly to deal with new markets.

“You start by getting used to the brick-and-mortar cases and then there are dynamic markets to deal with – it’s a constant race,” said Chawla.

The conference concludes tomorrow.

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