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Prioritisation in Antitrust
Enforcement - a Finger
in Many Pies
Hilary Jennings
Competition consultant, London

criteria to help them

have a framework of different
M ost competition agencies
set and guide their enforcement priorities. This is unsurprising given the
broad scope of functions and tasks assigned to competition agencies and their
limited resources. Unlike sectoral regulators, which have a clearly defined scope of
intervention, competition agencies need to assess the behaviour and interactions of
a vast range of economic agents across most sectors of the economy. Consequently,
clear and objective prioritisation of casework (and non-casework) is essential for a
competition agency to operate effectively.
However, the process of prioritisation is not uniform across jurisdictions; it is
dependent upon the competition agency's powers and functions as set out in the
law and the environment in which the agency operates. And broader objectives
usually set out in the legal framework setting up competition regimes, including
wider economic, social and political goals, can influence competition enforcement
priorities. Competition agencies prioritise their activities within the contexts in
which they operate and their prioritisation choices impact not just on their work
at any one particular time but on the future developments of markets and the
general development of their competition regime.
This article focuses on why competition agencies prioritise the way they do and
how wider contexts and goals can impact on prioritisation decisions. It considers
how an agency's priorities evolve in relation to the state of development of a
30 COMPETITION LAW INTERNATIONAL Vol 11 No 1 April 2015

jurisdiction, and its socio-economic challenges, as well as market structures. It

provides some thoughts about what this means more generally for the competition
system as a whole.

Objectives and different forms of prioritisation

The process of prioritisation enables a competition agency to concentrate its limited
resources in specific areas identified as being of greatest importance. Prioritisation
can take into account a wide range of immediate or strategic criteria but should in
the main be determined on the basis of the expected direct and indirect effects of
any action. The process is intended to make it possible to concentrate resources
on high-impact sectors or high-significance cases and projects, usually this means
focusing on the most potentially harmful conducts, precedent-setting cases that
clarify the law, significant market studies, and advocacy projects on critical concerns.
An increasing number of agencies undertake prioritisation transparently and
publish their enforcement priorities. A 2012 OECD survey of 46 competition
agencies in OECD member and non-member countries highlighted that 87 per cent
prioritise their work by identifying activities (such as fighting cartels) and sectors
(for example, the construction industry) on which to concentrate their resources.
Some agencies are under an obligation to do so, while others do it voluntarily. The
choice of these priorities is based on different criteria and sources of information
but the aim is to allow competition agencies to organise their resources so as to focus
on those interventions that are most needed and/or are likely to have the highest
impact.' In 2013, the European Competition Network endorsed a recommendation
on the power to set priorities, which identified a need for further convergence on
the ability of the authorities to set priorities when choosing which cases to pursue.
Prioritisation is encouraged in the ASEAN Regional Guidelines on Competition
and it featured prominently as part of strategic planning in the African Competition
Forum's (ACF) needs assessment and has been the subject of a number of capacity
building sessions for ACF member agencies.
Agencies enjoy different degrees of discretion regarding their ability to prioritise
cases and projects. Most agencies with powers to set priorities use formal or informal
prioritisation criteria as filters to help the agency determine which projects will
allow the agency to achieve their objectives. Publicly defining prioritisation criteria
supports legitimacy by providing an objective framework to decide on an agency's
activities. Clear criteria provide objective grounds for justifying the choice of
particular projects. They also contribute to the legitimacy of the agency's activities
by providing a clear and explicit framework - as opposed to oblique 'rules of
thumb' - for taking decisions on priorities.2

1 OECD, 'Evaluation of Competition Enforcement and Advocacy Activities: the results of an OECD survey'
(OECD 2013) 12-13.
2 ICN, 'Agency Effectiveness Handbook - Chapter 1: Strategy Planning and Prioritisation' (2010) 31
www.internationalcompetitionnetwork.org/uploads/library/doc744.pdf, accessed 13 February 2015.
 PRIORETISATION IN ANTITRUST ENFORCEMENT - A FINGER IN MANY PIES 31

Prioritisation criteria typically focus on: (i) impact on consumer welfare or the
economy; (ii) key sectors of the economy; and (iii) institutional or procedural
considerations, such as likelihood of success or institutional significance.
Criteria linked to the impact on consumer welfare or the economy often focus
on better value for consumers (for example, price and quality-range) or target
particular groups of disadvantaged consumers, as well as covering whether the
agency's actions could be expected to have an additional positive impact on
general economic efficiencies and productivity, given the position of the market
in the economy. Criteria linked to priority sectors of the economy may include
sectors with a history of anti-competitive conduct, concentrated sectors, sectors
displaying market failure, sectors in crisis or development, or infrastructure
sectors. These may also be influenced by public policy considerations or be
sectors with a significant number of consumers. Criteria based on institutional
considerations may include the risks and costs associated with a project, the
institutional significance of a project (for example, establishing legal precedent)
and a project's timeliness.'

Prioritisation in practice
There is no commonly accepted hierarchy of prioritisation criteria. In practice,
agencies usually balance prioritisation criteria for each potential project and make
decisions on the basis of this balancing act.4 But this rarely takes place in isolation
and nor should it. Without active consideration of the objectives of competition
law, general regulatory frameworks, and the context in which these frameworks
operate, priority setting can become formulaic and risks being at odds with the
realities of a market, society or economy at a particular time. An interesting case
in point is the current consideration for full deregulation of taxi markets, where a
robust implementation of competition policy, which might work well in a country
ready for deregulation, could cause more harm than good in a different country
where the regulation of taxi licensing is still necessary to provide safety for taxi
users and confidence in the market. Context and timeliness need to be central to
priority setting.
Real choices of priority are, to an important extent, a function of the competition
law objectives and the country's history, and its legal, political and economic culture.
Therefore, the priorities of young competition agencies in developing or emerging
markets may be very different from those of established agencies.

3 ICN, 'Seminar on Competition Agency Effectiveness - Summary Report' (ICN Seminar, Brussels, January
2009) 19: http://ec.europa.eu/competition/information/icn seminar2009/reportfinal-version.pdf,
accessed 13 February 2015.
4 See n2 above, 33.
32 COMPETITION LAW INTERNATIONAL Vol 11 No 1 April 2015

Priorities for developing and emerging economies

The inclusion of political and social goals in the first stages of competition law is not
unusual. It reflects the fact that developing jurisdictions, with limited governance
capacities, require different approaches to competition policy than developed
jurisdictions. 5 While drawing on the technical experience of mature jurisdictions
should always be beneficial, developing and emerging economies can often be faced
with the fact that non-competition matters might be of overriding significance. For
example, an economy moving from a system of central planning to one where the
government isjust a referee in the competitive process might find that the key factor
in how competition law needs to be designed and implemented is the operation
and structure of the government, rather than the operation or structure of the
markets. Institutional issues can be particularly important given that structural
problems can be compounded by weak competition agencies.
While global markets and similarities in the nature of markets permit a degree of
homogeneity in national competition laws and the approach of enforcers, particular
national circumstances, both historical and contemporary, are hugely influential.
These account for the factors that underpin a government's key policy objectives
as well as whether and to what extent non-competition objectives are factored
into competition legislation and enforcement. They also determine the reach of
competition law and the extent to which there is a more active or lenient approach,
for example in the investigation and prosecution of the conduct of dominant firms.
Competition laws may be rooted in intangible concepts of fairness and equity, in
addition to traditional concepts of economic efficiency.' These concepts might not
provide optimal economic outcomes but they are often highly ingrained and hard
to change. Agencies may therefore need to find a balance and accommodate these
different objectives if competition law and its enforcement is to be effective and
legitimate in these socioeconomic market conditions. Economic rules are therefore
applied in concrete and particular contexts, and a need to fit with different equity
considerations and objectives may well be part of this context.
The overarching policy priority in developing and least developed countries is
development itself. A basic goal is to lift significant proportions of the population
out of absolute poverty and enable more people to have access to basic necessities
such as clean water, education and medical treatment. The political credibility of
and support for competition agencies in these countries depends to a large extent
on how they are seen as contributing to poverty reduction and employment creation.
To deliver on this development agenda, priority setting can target markets in which

5 Eleanor Fox and Abel Mateus (eds), Economic Development: The CriticalRole of Competition Law and Policy
(Edward Elgar 2011).
6 David Lewis (ed), BuildingNew Competition Law Regimes: Selected Essays (Edward Elgar 2013) xiii-ix.
 PRIORITISATION IN ANTITRUST ENFORCEMENT - A FINGER IN MANY PIES 33

the poor spend most of their income (essential goods and services), markets that
facilitate SME success (banking and communications services), and on labour
intensive industries.' However, there is always uncertainty about when economic
and social development has reached a point where such policies are no longer
necessary and potentially result in 'picking winners'; and about how competition
policies treat foreign actors, particularly in relation to any government plans for
national champions.'
In South Africa, the Competition Act reflects the government's high priority of
redressing economic inequality following the transition from apartheid. It includes
the goals of creating a free market and effective competition, as well as promoting
the participation of all citizens in the economy and the fair distribution of ownership
and control of markets among different racial groups.' The former chairman of the
South African Competition Tribunal argues that the balances and trade-offs that
are required to satisfy the range of competition and non-competition objectives
are possible. But this balancing act is better made by a strong and independent
competition authority rather than a public interest decision-maker."
China's competition law aims to implement and formulate rules that are
appropriate for a socialist market economy. The objectives of China's competition
law include: promoting efficiency, encouraging free competition, safeguarding
the healthy development of a socialist market economy and the public interest,
protecting the state-owned economy and small business, encouraging the expansion
of domestic enterprises, and scrutinising foreign takeovers." This means that
in worldwide markets, particular attention is paid to the impact on the Chinese
economy. For example, in its 2011 Uralkali/Silvinitmerger decision, China's Ministry
of Commerce (MOFCOM) imposed continuity of supply obligations on the two
Russian potash producers. This strategic remedy guaranteed the supply of a vital
component to China's agricultural sector.
These broader objectives have also influenced China's competition enforcement
priorities. The enforcement agencies have focused on consumer-facing industries
such as infant formula, luxury products such as luxury liquor and imported
automobiles, and basic commodities such as packaging. This echoes the general
current focus of the Chinese Government on people's livelihoods and the fight
against corruption and extravagance. China's competition investigations also
demonstrate its strategy of targeting well-established businesses at the top of the
industrial supply chain in order to maximise competition impact.
7 See n5 above.
8 Simon J Evenett, 'Competition Law and the Investment Climate in Developing Countries', case study
commissioned by the Department for International Development UK for A Contributionto WDR 2005 on
Investment Climate, Growth and Poverty (2003).
9 South African Competition Act 1998, Preamble and s 2.
10 David Lewis, Thieves at the DinnerTable -Enforcing the Competition Act (Jacana 2012) 137-138.
11 Anti-Monopoly Law 2007 Art 1; Countering Unfair Competition Law 1993 Art 1.
34 COMPETITION LAW INTERNATIONAL Vol 11 No 1 April 2015

In a number of competition regimes in Asia, the concept of fairness and related

goals occupy a role as important as efficiency or consumer welfare. This is reflected
in the names as well as the texts of competition laws in many Asian jurisdictions.12
Economic reforms in many of these and other emerging economies have revolved
around efficiency and fairness, and often a trade-off between the two. If fairness
cannot be appropriately balanced with efficiency considerations, agencies may end
up regulating 'fair' trade when enforcing their competition laws. For example, they
may prioritise investigations into pricing practices by leading, but not yet dominant,
firms so as to redistribute producer surplus as consumer surplus. Other regimes may
consider this inappropriate in their circumstances because government compelled
price reductions by monopolists could forestall rather than promote competition.
In Taiwan, following public and political pressure, alongside the sensitivity around
technology licensing and anti-counterfeiting, the Fair Trade Commission (TFTC)
investigated the pricing, licensing and other practices of Microsoft for its software.
The investigations finally led to an administrative settlement that allowed the
TFTC to monitor and offer comments on Microsoft's pricing and other practices
in Taiwan.' 3 In jurisdictions where there is a lack of strong political commitment
to robust competition law, vague notions of equality or fairness can reduce the
predictability of competition law enforcement.
Different underlying structures and pre-existing market conditions have also
affected the way in which different countries have implemented competition
laws. In Russia, the fact that most undertakings acquired their dominant positions
through privatisation and not through competition on the merits explains the focus
of the Federal Anti-Monopoly Service on the enforcement of abuse of dominance
rules. Likewise monopolisation has been a priority for competition enforcement
in Latin America. In many cases this has been in response to abuses of dominance
by privatised former monopolies following the liberalisation of key sectors, notably
energy, telecommunications and aviation. In other cases, it is a hangover from the
days of price regulation, when many competition authorities were expected to look
at the commercial behaviour of large firms.
In some jurisdictions, agencies have actively chosen to align their work with the
government priorities as a means of demonstrating their contribution to general
development plans. This was the case in South Africa in 2007 when the Competition
Commission aligned its strategic priorities with the Economic Development
Department's National Development Plan and New Growth Path frameworks, and
prioritised key sectors of the economy that raised end costs to consumers (food and
agro-processing) and business (financial services and industrial products) as well as
12 Competition laws in Japan, Korea, China, Thailand, Taiwan and Indonesia have used labels, constructs and
texts like 'fair', 'just' or 'proper'.
13 Laurence S Liu, 'All about Fair Trade? - Competition law in Taiwan and East Asian Economic Development'
(2012) 57(2) The Antitrust Bulletin 259, 293.
 PRIORITISATION IN ANTITRUST ENFORCEMENT - A FINGER IN MANY PIES 35

construction and infrastructure. More cartel and abuse of dominance investigations

were launched after the prioritisation framework was adopted.
In other jurisdictions, priority setting by competition agencies may align with
market conditions and government plans less explicitly, but is evidenced through
their activities. Singapore's position as a regional trading hub, financial centre
and city-state makes efficient transportation of goods and people an important
economic consideration. The transport sector features prominently in the activities
of the Competition Commission of Singapore (CCS), which demonstrates the
priority it has been accorded. Over half of the CCSs' cartel decisions are in the
transport sector and in light of the number of airline alliances it reviews, the CCS
commissioned a market study in 2013 on the aviation sector.14 The market study
will inform its assessments of future aviation agreements to ensure that competition
along routes to and from Singapore is not reduced or distorted, with the expectation
of maintaining Singapore as a key aviation hub in Asia.
Young competition agencies are often advised to prioritise anti-cartel enforcement
because they are prevalent in developing and least-developed markets and are
legally easier to deal with for inexperienced and resource-constrained agencies.
Early successes with cartel enforcement can raise the profile of the competition
agency and assist with the dissemination of businesses rights and obligations under
the competition law as well as improving the public's understanding of the notion
of competition.
Many young agencies, from Malaysia to Botswana, have prioritised bid rigging
cases. When collusion in public procurement is pervasive, it involves a significant cost
to the economy and has a disproportionate impact on the poor. The prioritisation
of big rigging cases therefore provides opportunities for competition agencies
to contribute to significant savings for governments through sound competitive
practices in public procurement. This can also improve the competition agency's
position within the government hierarchy. However, prioritising bid rigging will only
be effective where an active cartel enforcement programme is in place. Otherwise
agencies are likely to be putting the cart before the horse.

Prioritisation by established competition agencies

Mature competition agencies have the advantage that they are established enforcers
with, by and large, successful enforcement programmes. They have tackled the
most blatant infringements of competition law and addressed structural problems
in key sectors and markets to prevent distortions of competition. More established

14 Competition Commission of Singapore and ICF SH&E, Summary Report on Net Economic Benefit ofJoint
Ventures: Market Study on the Airline Industry (2015): www.ccs.gov.sg/-/media/custom/ccs/files/media%20
and%20publications/publications/market%20studies/2014-02-11 %20icf%2o0sh-e%20ccs%20airline%20
study%20summary%20report.ashx, accessed 13 February 2015.
 36 COMPETITION LAW INTERNATIONAL Vol 11 No 1 April 2015

agencies have typically built support and recognition for the benefits of competition
with government, consumers and the business community. Once these fundamental
competition concerns have been dealt with, which are likely to outweigh other
activities at the time, this opens up a wider range of competition-related matters
that agencies can consider.
A flick through the Global Competition Review's annual rating enforcement survey
highlights the breadth of priorities identified by different agencies each year. This
is perhaps to be expected given that tailored interventions in national markets may
better serve consumers' interests for many products and sectors. But it does not
tell the full story and there is a high degree of convergence in cases attracting the
attention of competition enforcers.
Cartel enforcement remains an internationally agreed priority, and more
agencies are increasingly prioritising international cartel activity and targeting
multinational companies for prosecution. Agencies from around the world joined
investigations into the manipulation of global benchmark interest rates and
foreign exchange markets, the auto-parts price-fixing cartel and the LCD cartel.
There is also convergence in other areas, notably pay-for-delay agreements in the
pharmaceutical sector. High-tech industries, especially concerns around patented
technologies, two-sided markets and online search engines continue to attract
significant attention from a range of competition agencies. There have been a
number of actions against e-book publishers and several agencies have brought
actions against resale price maintenance in online markets.
As with developing jurisdictions, priority setting by established competition
agencies does not take place in a vacuum and it is responsive to the wider political
economy. In somejurisdictions, governments still provide a steer on how they see the
competition regime fitting within broader economic priorities, whilst acknowledging
the independence of agencies to determine their operational priorities. However,
governments can also be tempted to use competition agency interventions as a
regulatory stopgap for the short-comings of other regulatory instruments.
Agencies may be under pressure from government to prioritise certain sectors or cases
that are in the spotlight. The US Congress has long had a focus on oil price-gouging
when prices at the pump increase. In the UK, concerns over retail dominance in the
food supply chain and the effect on small producers and the farm industry led to
pressure on the OFT to investigate the sector. And similar pressure for action in the UK
banking and energy sectors have resulted in the Competition and Markets Authority
(CMA) making them a clear priority, perhaps against strict economic considerations.
But politicisation of the process can result in a poor fix for deficiencies in wider
regulatory frameworks or for constraints and structural problems in the economy. It
will also create legal uncertainty and a lack of transparency in the prioritisation process.
These issues are not, of course, only limited to the more established competition
jurisdictions or to developed economies.
 PRIORITISATION IN ANTITRUST ENFORCEMENT - A FINGER IN MANY PIES 37

Evolving priorities
Priorities in different agencies shift over time as markets evolve and the effects
of previous enforcement actions take shape. The business community needs to
engage early on with competition agencies to improve understanding of markets or
practices and to better assess the likely impacts of intervention. This is particularly
relevant for new markets and practices, or concerns over the impact of rapid
technological change on markets or monopoly positions. Agencies need to be
particularly careful in markets that are dynamic and rapidly changing and may
be best considering light interventions rather than applying strict enforcement
prioritisation criteria.
New topics of concern to competition agencies emerge all the time. As more
business moves online, competition agencies are considering how to handle
e-commerce and online content; how to treat the power of emerging networks
and platforms; and what approach to take to companies amassing data. The UK's
CMA has identified online markets as a major priority. 5 The EU Competition
Commissioner noted during her confirmation hearing before the European
Parliament in October 2014 the role of data as the 'new currency of the internet'
and said she wanted to get on top of the issue. The CMA is also looking to build its
knowledge of how consumer data is collected, used and traded by business, through
a call for information from businesses, trade bodies and other stakeholders.'" While
policy-makers and society work out how comfortable they are with such practices
in the digital age, competition agencies arguably need to play a more modest role
in this area."
New areas are also of interest to younger agencies and they too have to weigh
up their interventions in these markets. Many Asian countries, in particular, are
increasing their commitment to R&D at all levels of their local economies to drive
indigenous innovation and improve the international competitiveness of national
industries. In recognition of the importance of access to IPR-protected technologies
to economic development, competition agencies in Asia are taking an interest in
their use. For example, recent high-profile investigations into companies including
Microsoft, InterDigital, Qualcomm and the HDMI patent pool highlight the priority
that China attaches to accessing IPR-protected technologies as a tool of development
for its social market economy.

15 Philip Marsden, CMA Inquiry Chair, 'Exercising Choice: Some Reflections on Competition Enforcement
in Online Markets' (11th Baltic Competition Conference, Vilnius, 10 September 2014) www.gov.uk/
government/speeches/philip-marsden-speaks-about-competition-enforcement-in-online-markets, accessed
13 February 2015.
16 CMA, Callfor Information: The Commercial Use of ConsumerData 2015: www.gov.uk/government/uploads/
system/uploads/attachment-data/file/398283/ConsumerData- CFI.pdf, accessed 13 February 2015.
17 Alex Chisolm, CMA CEO, 'Giants of Digital: Separating the Signal from the Noise and the Sound from the
Fury' (CRA Competition Conference, Brussels, 10 December 2014) www.gov.uk/government/speeches/
alex-chisholm-speaks-about-digital-technology, accessed 13 February 2015.
38 COMPETITION LAW INTERNATIONAL Vol 11 No 1 April 2015

Final thoughts
Prioritisation is a mechanism to deliver the goals of competition law effectively.
This includes economic, social and political objectives, and prioritisation does
not take place in isolation but is a reflection of wider ambitions for a particular
competition regime and is responsive to changing market dynamics. The existence
of different priorities across different regimes can be of concern to business in
terms of predictability and international consistency. In a globalised world it
creates a real risk that entirely local approaches that do not reflect the realities
of global or regional trade practices will significantly reduce the benefits to be
gained from competition. However, convergence on a transparent and consistent
hierarchy of prioritisation criteria is unlikely, and perhaps undesirable. The key is
for competition agencies to ensure they are open about their actions and choices,
they are flexible in how they apply prioritisation in practice, and they are kept in
check by meaningful judicial oversight.

About the author

Hilary Jennings is an independent competition and regulation consultant. She
is the special advisor on competition for the European Commission's projects
to provide capacity building to China's and India's competition authorities.
Hilary also advises international organisations, and undertakes commissions for
academic institutions and the private sector. Hilary was previously Head of Global
Relations for Competition at the OECD, leading the team responsible for capacity-
building activities and policy dialogue with developing economies. Hilary also
worked as EU/International Government Relations Manager at HSBC and was
Head of International at the UK's Office of Fair Trading. Hilary holds an LLM in
International Business Law from King's College London and studied at the Institut
d'Etudes Europeennes in Brussels as part of her LLB (Hons) from the University
of Sussex.