Competitive Neutrality – Discussion Paper.docx

Competitive Neutrality – Discussion Paper8th Seoul Competition ForumMark Pearson(The views expressed are those of the author and do not necessarily represent those of the ACCC)IntroductionCompetitive neutrality policy aims to address the implications of government business enterprises operating in commercial environments in competition with private operators. It is a response to one of the challenges facing policy makers in developing broad-based competition policy and laws that cover all market participants in their economies.It is not uncommon now in developed and developing economies to find, if not specific policies, at least extensive discussion and debate around the role of competitive neutrality as an explicit plank of a country’s competition policy.Bodies such as the United Nations Committee on Trade and Development (UNCTAD) and the Organisation for Economic Co-operation and Development (OECD) have undertaken in-depth assessments of the costs, benefits, challenges and individual country approaches to this issue. In Australia, competitive neutrality was an important arm of the National Competition Policy (NCP) implemented following the Hilmer Review into competition policy. Amongst the specific concerns that the report identified as needing to be addressed was that of competitive neutrality in circumstances where private firms are competing with government businesses.As recently as April 2014, the International Competition Network (ICN) released a report on State Owned Enterprises and Competition in which some 36 jurisdictionsreported on arrangements in their respective countries. That report specifically noted the challenge for emerging economies in trying to find the appropriate balance between their public sector actors and the rapid emergence over the previous twenty years of competition laws and policies. The ICN for example has grown from 14 jurisdictions in 2001 to over 125, reflecting the spreadin competition law across the globe and underpinning