Abstract:

In the latter half of the 1970s, the United States began deregulating its securities and energy industries. With the advent of the 1980s, this deregulation was broadened to include aviation, transport, telecommunications, finance and other industries, and other nations such as the United Kingdom, Japan, and New Zealand jumped aboard the deregulation bandwagon. This wave of deregulation gradually spread to other member nations of the Organization for Economic Cooperation and Development (OECD) during the 1980s, as the major nations of the world began to incorporate competitive concepts as the basic principle of regulatory reform, and also to comprehensively relax various other existing domestic regulations, manifesting a fundamental change in international concepts of regulation. Regulatory reform is not a particular state nor is it a particular phenomenon; it is rather a gradual, ongoing process that, once sufficiently underway, spreads to encompass political, social and economic aspects. In addition to the re-evaluation of nations’ private economic practices, the impeding effect of the exercise of national power on the normal operation of the market mechanism has also become a focus of attention, and market competition policy has been seen to play a pivotal role.

This paper begins with an attempt to analyze the significance of regulatory reform, then takes an in-depth look at the regulatory reform methods of the United States, the United Kingdom, Australia, New Zealand, Japan, and South Korea, examines the interaction between market competition policy and regulatory reform, and proposes the following positionings and roles for the competent authorities in regard to competition law in the context of regulatory reform: as an advocate for building a competition culture, as a participant in regulatory reform movements, as a consultant on market competition policy, and as an enforcer of market competition regulations. Finally, it attempts to determine future courses of action for Chinese Taipei’s market competition authorities with an eye to identifying a regulatory reform course based upon competition principles.

After analyzing and compiling various nations’ experiences of regulatory reform, the paper concludes that a competent authority for market competition should play at least the following roles in regulatory reform:

(1) As an advocate for building a competition culture

The ultimate objective of regulatory reform is to reduce sector regulation to a minimum, leaving in place only those regulations necessary for safety, sanitation, health, and so forth, and those necessary to correct market malfunctions, while doing the utmost to create a level playing field for all market participants to compete on. Since this principle should be applied across all sectors, sector-specific characteristics are best avoided. This is precisely the characteristic of market competition regulations—they can serve as competitiveness criteria for all industries. Another means of minimizing the discrepancies in regulatory standards for various industries is the establishment of a pervasive competition culture throughout society, which can be accomplished through the joint three-way efforts of policymakers, the business community, and consumers.

(2) As a participant in regulatory reform movements

In addition to enforcing market competition law and advocating competition culture, competent authorities for market competition can be direct participants in regulatory reform efforts. Are there direct channels of communication between the competition authorities and regulatory authorities? Is market competition policy consistent with regulatory reform or are they in conflict? The answers to these questions lie in the possible interactions between competition policy and regulatory reform. According to an OECD report, possible interactions between competition policy and regulatory reform include: 1. regulation can contradict market competition policy; 2. regulation can replace market competition policy; 3. regulation can reproduce market competition policy; and 4. regulation can use market competition policy.

The experience of OECD member nations shows that the scope for the competent authorities for market competition to participate in regulatory reform is vast, encompassing nearly all regulated industries or sectors. With particular regard to active participation in regulatory reform, the competent authorities for market competition in some 20 member nations have drafted proactive plans for participation in regulatory reform efforts in the telecommunications, financial, electrical power generation and agricultural sectors, and the professions. Statistical data indicate that the active participation of the competent authorities for market competition promotes the efficacy of sectoral regulatory reform.

(3) As a consultant on market competition policy

Through enforcement, a competent authority for market competition not only corrects the unlawful competitive practices of enterprises but also conveys its stance regarding the preservation of market competition to the regulatory authority. Consequently, the regulatory authority, when drafting and amending regulations, will gradually become accustomed to the existence of the competent authority for market competition, will come to better understand the essence of market competition policy, will begin giving greater consideration to reconciling industrial policy and market competition policy, and will even seek the opinions of the competent authority for market competition. In fact, the “Recommendation of the Council on Competition Policy and Exempted or Regulated Sectors” presented at the September 1979 OECD board of directors meeting recommended that the governments of member nations examine, with the participation of their competent authorities for market competition, their regulatory systems and antitrust exemption provisions at an appropriate time and vest in the competent authority for market competition appropriate powers for handling instances of abuse of market position by monopolies or cartels that it has authorized.

(4) As an enforcer of market competition regulations

The chief responsibility of a competent authority for market competition is the enforcement of market competition regulations. It is charged with duly handling practices that restrict market competition, and consequently plays the role of maintainer of trading order and enforcer in competition disputes. As deregulation takes place in various market sectors, the role of the competent authority as enforcer becomes increasingly important.

First, the scope of regulation and protection that enterprises are subject to within a given sector are lighter than they were previously and enterprises must observe competitive principles in carrying out organizational and operational adjustments. Additionally, with enterprises facing stiffer competition and as disputes concerning competitive practices become difficult to avoid, it becomes the inherent responsibility of the competent authority for market competition to strengthen its role as enforcer.

Second, with the explosion of technological developments in recent years, the threshold for market entry has been dramatically lowered. In addition, the gradual blurring of distinctions between various goods and services has opened up possibilities for cross-sector participation. Consequently, individual enterprises might no longer belong exclusively to one industry, so that the regulatory scope for individual industries becomes increasingly complex. This is when the application to all industries of general market competition policies or rules becomes more practical than specific regulatory standards for individual industries. For example, following regulatory reform in the United States, when enterprises have entered, pulled out, or merged in given industries, regardless of whether the total number of enterprises in such industries has increased or decreased, the overall degree of market competition has by and large grown stronger, although in some industries a trend has also been seen toward natural monopolies. Regardless of whether it is following the rise of new competitive practices or of new natural monopolies, various kinds of competition disputes inevitably crop up, requiring the competent authority for market competition to ubiquitously play the role of enforcer.

Written by:
Ming-Yen Tseng, Tzu-Shung Hu, June-Shoang Hsu（Planning Department）