Speaking Notes For Sheridan Scott Commissioner of Competition

Chair of the International Competition Network Steering Group

Competition Bureau
Government of Canada

International Conference on India's New Merger Notification Regime

Hyatt Regency, New Delhi
Saturday, March 15, 2008

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Thank you for inviting me to join you today. I am pleased and honoured to be here with you in New Delhi in my capacity as Chair of the International Competition Network Steering Group.

The fact that we are all here today is a clear signal that India's competition law has engendered great interest and enthusiasm amongst practitioners, governments and businesses. But then that should not be at all surprising.

India is a major economic growth centre not just in the region but globally. It is both a significant participant in the international trading system and a growing destination for, and source of, investment.

Put simply: India matters, and matters a lot.

The economic reforms launched in the early 1990s have placed India on a path of economic transformation. India has recognized that sound competition law and enforcement promote economic productivity and innovation. Competition also plays an indispensable role in assuring that Indian consumers enjoy the benefits of liberalized economic policies. Consumers benefit from more competitive prices, quality and choice of products and services.

It is also not surprising that this gathering has attracted the attention of representatives from both business and government. Getting merger review right in the global market place is critical for all of us: indeed pursuing this goal was one of the driving forces behind the creation of the ICN in 2001. At its launch, Konrad von Finckenstein, first Chair of the ICN Steering Group and my predecessor at the Competition Bureau of Canada stated:

"The ICN will focus on substantive and procedural issues including the problems that have arisen with the proliferation of merger review procedures around the world. Everyone will benefit from simplified and predictable reviews."

I would like to spend my few minutes with you today elaborating on just how we have focused on these procedural and substantive issues at the ICN, particularly with reference to merger review, and always with a view to simplicity and predictability.

In an increasingly interconnected global economic system, there is a growing international dimension to antitrust enforcement. This is evidenced, in part, by a rise in the number of mergers requiring multi-jurisdictional review.

The growth of the ICN itself is a clear illustration of the meteoric rise in importance of competition law and policy due, in large part I believe, to the growing number of market-based economies in nations around the world. The ICN was founded in the fall of 2001, with just 16 member agencies. It now engages the voluntary efforts of 102 competition authorities and many more private sector representatives (or non-governmental advisors) from 91 jurisdictions around the world. The trajectory mirrors closely the rapid introduction of competition laws globally: whereas before 1990 there were only a handful, we now see close to 100.

Where merger transactions are reviewed by many competition authorities, the risk of substantive conflict increases dramatically. Divergence in both substantive standards and procedures among national and regional competition authorities can lead to significant delays and increased costs as businesses try to comply with various jurisdictional requirements. This can act as a strong disincentive to investment and to the pursuit of more efficient operations, to the detriment of both government and business.

ICN members commit significant time and energy to studying and identifying opportunities to collectively improve competition law enforcement. The ICN is a results-oriented, project-driven organisation that has accomplished much in its short history. One of its key vehicles for working towards procedural and substantive convergence is the development of Recommended Practices. These represent the consensus of our membership. When you have over 100 members, reaching a consensus is no easy task, but where there is consensus it sends a clear message.

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When jurisdictions incorporate the ICN's Recommended Practices into their own competition law merger review practice and procedure the result is greater consistency, efficiency and effectiveness in the merger review process of both domestic and cross-border mergers, benefiting competition agencies, merging parties and consumers across the globe.

Today we have had the opportunity to discuss Recommended Practices in the design and operation of merger review and notification procedures, areas where seeking convergence is particularly important in the global market place. Mind you, these are not the only issues of concern and I urge you to visit the ICN web site, where you will be amazed, I am certain, by the ICN's ability to get things done. In just 7 years or so, we have managed to produce an impressive number of documents to facilitate the move to greater international convergence of antitrust practice and more effective co-operation and co-ordination of competition agencies= work around the world.

We all recognize, of course, that it can be difficult for some countries to perfectly incorporate all of the ICN's Recommended Practices into their existing laws. Recommended Practices are a standard against which countries can measure themselves and their progress. We in Canada regularly review and assess our own competition law against ICN Recommended Practices and other international benchmarks as we strive to improve our own processes.

That said, the ICN encourages all governments to continually self-assess and critically reflect on their competition laws and to consider, in light of ICN Recommended Practices, ways in which their competition law and procedure can be improved.

The ICN also calls upon all competition authorities to keep a close eye on their own procedures, with a view to ensuring constant alignment with ICN Recommended Practices. For example, there may be actions that we, as member agencies, can take within our existing legislative framework to pursue soft convergence.

The development of Recommended Practices aims to encourage simplicity and predictability. However, the ICN's approach also demonstrates flexibility. In many cases, for example, Recommended Practices are accompanied by illustrations of country specific solutions.

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In particular, the Mergers and Procedures Implementation Handbook provides specific examples of how countries have met the recommended practices using alternative approaches. This is a clear recognition that one size cannot possibly fit all and that some differences may remain as a result of our own national experiences, the unique aspects of our individual economies and legal institutions and even the availability of resources, both financial and human.

The ICN intends to continue to actively promote convergence and implementation of ICN Recommended Practices. In the spring of last year we appointed two members of the ICN Steering Group to lead our work on implementation of ICN work products. Chairman Takeshima of the Japan Fair Trade Commission and Philip Collins, Chairman of the OFT, have taken on that challenge.

Another of our key vehicles for promoting convergence is our series of workshops. The ICN organizes interactive workshops designed to promote understanding and further implementation of ICN Recommended Practices.

The power of ICN Workshops is the forum they provide for practical sharing of experiences and expertise, for increasing contacts, and for promoting cooperation. In the case of newer agencies, ICN Workshops help to build capacity to detect, investigate, and remedy anti-competitive conduct. Newer competition authorities benefit from the collective experiences of other member agencies.

In just a few days, the Merger Working Group is holding a workshop in the Czech Republic involving some 120 participants. The level of attendance is clear evidence of the value agencies attach to these gatherings.

These working level contacts are invaluable in promoting international co-operation and co-ordination. The exchange of experiences within the ICN at the head of agency level and amongst our non-governmental advisors on a wide range of complex competition issues also helps us, as agencies, to be better advocates for competition and to be more effective and efficient enforcers of competition law.

I look forward to, and welcome the engagement of, India's Competition Commission in the ICN. We will learn from each other.

Before closing let me say a few words about our collective role as advocates of competition. All of us, I believe, can contribute to building a culture of competition around the world to our mutual benefit.

I have spoken about the role of agencies in advocating for greater substantive and procedural convergence, in order to foster simplified and predictable reviews.

The business and legal communities can also play a pivotal role in the effective enforcement of a country's competition laws. You can choose how you wish to interact with the relevant agencies. In my experience, competition laws are most successfully implemented when there is constructive cooperation between the authorities and the business and legal communities. This includes providing all relevant information to the authorities in a timely fashion so that the competition authority can do its work as quickly as possible.

The legal and business communities can also take steps to become engaged with national governments in the implementation and development of competition laws. Governments and competition authorities need information and feedback on their performance and what can be done to ensure more effective and efficient enforcement of competition laws.

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The business and legal communities can act as a catalyst for reform by engaging their own governments and encouraging compliance with ICN Recommended Practices.

The interaction between public and private interests will help to compare, identify, and promote better competition law practices across jurisdictions and will help ensure that the benefits of more effective and efficient competition law enforcement will be realized.

In addition, we both have an interest in challenging competition restricting regulations and anticompetitive behavior.

And we have a shared responsibility to explain and demonstrate the real benefits of open and competitive markets to our fellow citizens.

We are not all at the same stage in our ability to pursue these goals. In Canada, we have had a Competition Act in one form or another for over 100 years. It has been the subject of a number of updates, all with a view to having a modern framework, based on economic principles, which will contribute to the prosperity of our nation.

However, while other jurisdictions may have less experience with competition law enforcement, I am convinced that, with the commitment of their governments to market-based economies and the opportunity to share experiences through organizations such as the ICN, we will move closer to our goal of soft convergence in significantly less time.

I believe that the ICN's practice of encouraging both public and private sector representatives to contribute to the development of its Recommended Practices has strengthened our ability to design regulatory frameworks that are clear, concise and predictable. This in turn encourages businesses to invest and allows agencies to focus their scarce resources on those mergers which are most problematic to the economy.

My message today is a simple one. In today's interconnected world, we all have an interest in each other's successes. In Canada, I know we as an agency have learned and grown from our interactions, through the ICN, with other agencies and private sector colleagues.

I have tried to highlight today the power of the partnerships the ICN represents. Agencies working together in a spirit of collaboration, alongside private-sector experts, can and have made a positive difference in competition policy and enforcement, and so in the lives of our citizens.

Now in India, as with the early days of any new competition legislation, a number of issues will clearly have to be resolved through administrative practice, formal and informal guidance by the agency, and jurisprudence. That will come with time.

We stand ready to offer whatever practical advice we can during this process, and we look forward as well to learning from our Indian colleagues. Our shared goals and practical partnership through the ICN will make us all better at our very important work.

Thank you.