Case Study

Example: United Kingdom

The United Kingdom employs a mix of advocacy instruments that are undertake as part of on-going advocacy efforts. These efforts are primarily concerned with making sure that markets work well for consumers such that productivity and economic growth, and the benefits thereof, are central features of competition advocacy efforts undertaken by the UK’s Office of Fair Trading (OFT). The advocacy instruments used to achieve this goal are;

Market Studies

One of the advocacy instruments frequently employed by the OFT is the regular use of broad and extensive market study instruments. Market studies are undertaken in line with the OFT’s goal of making markets work well for consumers. In many cases, this requires consideration of different policy issues and/or the interaction of market and policy dynamics. The OFT undertakes market studies across all sectors and frequently makes recommendations to government.

For example, the OFT’s 2003 Market Study into pharmacies had some success in opening up the market when reforms were announced in 2005 – these led to benefits including shorter waiting times, greater choice and extended opening hours. But regulations affecting pharmacies is a perennial concern and the OFT continues to address the competition issues in this industry.

The success of market studies in jurisdictions such as the UK has led to other jurisdictions, such as South Africa, for example, to amend legislation so as to empower competition authorities to undertake market studies.

Impact Assessments

One of the ways the OFT seeks to influence government policy is through competition scrutiny of Impact Assessments (IAs). The OFT’s advocacy team oversees the competition impact test within Impact Assessments conducted by other government departments.

Anyone completing an Impact Assessment is required to carry out a competition assessment. Impact Assessments require policymakers to consider the costs and benefits of proposed policies.

The OFT provides advice and training, on request, to policymakers who are involved in completing the competition assessment part of the Impact Assessment.

Reports

The OFT advocacy team has published a number of reports on specific issues relating to government and markets. The OFT recently published a report on Government in Markets, which provides advice on the impacts that government policy can have on markets, and how interventions might be designed to minimize any distortions of competition.