​Press Release 07/2018 

June 26, 2018

 

 

The Portuguese Competition Authority (AdC) has drawn up Guidelines for Competition Impact Assessment of Public Policies in order to assist public decision-makers in preventing the impact on competition of public policy measures.

 

When public entities adopt legislative or regulatory measures, they may influence the function of the markets, affecting the competitive conditions, benefiting or undermining their dynamics, albeit unintentionally.

 

Public intervention can affect the competitive environment of a market, typically in four major dimensions: conditioning the number and type of companies in the market; conditioning the ability of companies to compete with each other; reducing the incentive of companies to compete; limiting the choices and information available to consumers.

Any of these effects will give rise to a reduction of the competitive pressure on the market and the willingness or ability of firms to compete vigorously. Such reduction in the level of competition on the market is liable to harm consumers by allowing prices to rise, and towards a reduction in the quantity, variety and quality available.

 

Those impacts on competition of public policy measures should be identified as early as possible. The inclusion of a competitive impact assessment in the political decision-making processes can therefore bring economic benefits for the national economy, by identifying areas/sectors where there is an unjustified restriction.

 

The Guidelines focus, in particular, on the application of a Competitive Impact Assessment procedure, in light of a prior evaluation of legislative or regulatory proposals that are being drawn up by the Portuguese National Parliament, the Government or other bodies of the Public Administration.

These Guidelines are also applicable to an assessment of existing legislation and regulations, i.e., post-evaluation of legal provisions applied at a national, local or sectoral level.

 

As a first stage, the public body will be able to identify potential impacts on competition using a Competitive Impact Assessment Checklist that the AdC has adopted using the OECD Checklist as a model available on the AdC website. If there are potential competitive impacts, the public body should refer to the AdC for further analysis.

At this second stage, the AdC identifies, where possible, alternatives that reduce or eliminate the competitive impact, safeguarding the policy objective, presenting an opinion to be considered by the political decision-making body.

In the last stage, the public body takes a decision considering the identified impacts with possible collaboration of the AdC in the discussion of alternative measures.

 

In the context of this collaboration, between the AdC and the public body, it will be essential to identify the reasons of public interest which may justify the impact on competition and to assess the potential restrictions to competition, taking into consideration their necessity and proportionality. If this analysis demonstrate that the restrictions do not appear to be necessary for the pursuit of the public policy objective or if the impact on competition is disproportionate, the measure should be reviewed and amended in accordance with those conclusions.

 

The Guidelines are in public consultation, which ends on June 28. All stakeholders can submit their contributions.