Nordic competition authorities: Effective competition policy is a central prerequisite for growth

The joint report A Vision for Competition – Competition Policy towards 2020 by the Nordic competition authorities published today highlights the significance of effective competition policy and competition control for economic growth and welfare. In addition to the content of competition policy and related legislation, particular attention is paid to innovation and the significance of competition in promoting the efficiency, availability and quality of public services.

In order to achieve credible and effective competition control, competition authorities must have sufficient powers and the means to respond to possible violations. In this realm, differences can still be identified between the Nordic countries and between the Nordic countries and the European Commission. In particular, the report refers to the European Commission’s powers to ban mergers and set a fine for violations of competition law.

From the viewpoint of directing the activities of competition authorities and recognising their position in society, it is important that the authorities conduct systematic assessment of the impact of the policies implemented on the economy and society. Despite the difficulty of developing undisputable quantitative assessment methods, also qualitative assessments based on individual cases provide clear indication that the impact of competition policy and competition legislation on welfare is significant. Allocating resources for the activities of competition authorities is thus justified based on common interest.

Innovation and competition policy complement and support one another

The emphasis placed on innovations in assessing the functioning of markets and competition is increasing. At the same time, the relationship between innovations and restrictions of competition is becoming increasingly multifaceted. As a result, the analysis of innovation processes remains one of the central development targets in the activities of competition authorities.

The report also states that modern competition policy and innovation policy aiming at functional competition complement and support one another; the aim of both policy sectors is to encourage businesses to generate competitive advantages based on innovation and to prevent the generation and maintenance of monopoly powers of a permanent nature. Chapter five of the report focuses on innovations and was prepared at the Finnish Competition Authority.

In the area of public services, the report focuses especially on healthcare, as its share of public spending is significant in all Nordic countries. According to the report, competition policy will have a significant impact on public health services, at least in the areas of public procurement (including innovative procurement), increasing opportunities for choice and safeguarding the neutrality of competition between the private and the public sector.

The aim of the joint project, launched in 2011 was to explore, based on recent economic development and development trends, the ways in which competition policy and competition authorities are able to, for their part, ensure growth and welfare in the Nordic countries and to establish the challenges entailed in this.

A Vision for Competition – Competition Policy towards 2020 is the tenth joint report produced by the competition authorities of the Nordic countries. The other nine reports published after 2002 can be read here.