Why is competition important to regulated sectors?

Competition is about increasing choice and efficiency to benefit consumers and make the economy more productive.  This also applies to utilities which in many countries have been liberalised (such as electricity, water, railways and telecoms),  and which are subject to regulation (banking and other financial services) or where the government plays an important role (healthcare, education and local public services).

These sectors can raise complex policy challenges, for example:

• How to make sure that the behaviour of previous monopolist firms does not stifle competition in recently liberalised sectors?
  
  
  
• Is there a conflict between introducing competition and security of supply in the energy sector?
  
  
  
• What is the best way to ensure that consumers receive fair treatment when buying complex financial products – without stifling free competition between providers?
  
  
  
• How should competition enforcers deal with digital markets given that they raise particular challenges as more and more consumers buy products and services online, listen to music and surf the Internet using mobile devices.

‌Links and documents

• Recommendation on Competition Assessment

• Recommendation on Structural Separation in Regulated Industries

• Competition in Ports and Port Services, 2012 (PDF)
  
  
• Competition Issues in the Financial Sector, 2011
  
  
• State-Owned Enterprises and the Principle of Competitive Neutrality, 2009 (PDF)
  
  
• Energy Security and Competition Policy, 2007 (PDF)
  
  
• Generic Pharmaceuticals, 2009 (PDF)
  
  
• Competition in Audit, 2009 (PDF)

See also: Ongoing work on
» Commodities and Price Volatility
» Digital Economy

The Competition Committee’s work in this area focuses on improving economic regulation and proposing the appropriate policies for competition to deliver more benefits for consumers and growth.  The Best Practice Roundtables identify  key issues in each sector and present the latest developments to address those problems.  Many roundtable reports also provide a valuable resource for advocating policy reform in a sector, for example by surveying regulations and policies in different countries. They also cover cross-cutting thematic issues, such as the role of behavioural economics in competition policy and price volatility in the case of commodities. 

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Competition ‌Assessment Toolkit‌
The OECD Competition assessment toolkit was designed to help governments eliminate barriers to competition through a method that identifies unnecessary restraints on market activities and develops alternative, less restrictive measures that still achieve government policy objectives.

Mexico project