Competition principles under threat : Record of the proceedings IDRC Pre-ICN Forum on competition and development

Record of proceedings - On 2 June 2009, academic experts and practitioners from competition authorities from all over the world gathered at the IDRC pre-ICN forum to share experiences and discuss ways of reinstating competition principles in current circumstances. The three Sessions were structured as follows: (i) competition policy in a crisis, (ii) competition issues in food markets, and (iii) competition enforcement beyond the national level. In the First Session, the speakers agreed that the crisis will be made more costly, the greater the laxity that is shown towards competition principles. Nevertheless, the historical record shows that
competition principles are usually set aside in times of war and crisis. The charge that the current crisis, originating in the financial sector, was attributable to excessive competition was rejected. Even so, the banking sector and the real economy have to be treated differently in terms of competition policy in times of crisis, because a banking collapse has dramatic consequences both within and beyond the financial sector, with extremely high social costs The Second Session showed that competition in the food sector matters because the nature of competition both horizontally and vertically determines the transmissions of shocks between consumers and upstream producers. The key importance for policy making is how to weigh the interests of farmers and consumers. The extent to which the buying power of downstream firms in the food sector negatively affects farmers in poor countries is unresolved and warrants more discussion. The Third Session emphasized the importance of innovative ways of cooperation among competition authorities; the powers that the national competition authorities need to have in order to be able to implement decisions taken; and finally, the importance of sharing information and building up capacity in new agencies. The meeting ended with a plea from the final discussant for attention to be paid to the level of preparedness of the community of competition authorities for non-routine crisis. "Best
practices" for such situations need to be defined, as do recommendations as to how they are to be implemented, particularly in the face of political pressure in developing countries.