January 15, 2013
Over the past years several EU Member States decided to integrate their competition authorities with their consumer protection agencies. The Danish Competition Authority and the Danish Consumer Agency merged into the Danish Competition and Consumer Authority in 2010, the new Finnish Competition and Consumer Authority has begun operating on 1st January 2013, the Netherlands Authority for Consumers and Markets (ACM) will merge the Netherlands Competition Authority (NMa) with the Dutch Consumer Authority (CA) and the Netherlands Independent Post and Telecommunications Authority (OPTA) from February 2013. In Ireland the government has also announced that the Competition Authority will be amalgamated with the National Consumer Agency.
By Kati Cseres
In 2011 the Dutch Minister of Economic Affairs has decided to merge the Netherlands Competition Authority (NMa) with the Dutch Consumer Authority (CA) and the Netherlands Independent Post and Telecommunications Authority (OPTA) into a new administrative authority named the Netherlands Authority for Consumers and Markets (ACM). The ACM’s three departments which focus on consumers, regulation and competition will be complemented by a central legal department, an office of the chief economist, and the corporate affairs department which will be responsible for (inter)national strategy and communication and support staff. The new authority will be run by a collegial board, consisting of three members. It will focus on three main themes: consumer protection, industry-specific regulation, and competition oversight. With a collegial board, the coherence between these three themes will be safeguarded.
The Dutch Minister of Economic Affairs stated that this institutional change will increase efficiency and effectiveness of competition oversight and market regulation, as a consolidated authority is able to anticipate market developments in a flexible and integrated manner, and make better use of its consolidated knowledge and expertise. Another anticipated benefit of the merger is cost savings. The Minister also emphasized that in the new authority the consumer and her interests will be given central position and the authority’s improved effectiveness will guarantee better protection of consumers.
This was a remarkable development in the light of the fact that in 2007 when the Dutch Consumer Authority was established the Dutch government has opted for a separate new agency. As of 1st January 2007 the Dutch Consumer Authority was established with the task of promoting fair trade between businesses and consumers focusing on the economic interests of consumers. One of the reasons for the new authority was the implementation of EC Regulation 2006/2004 on consumer protection cooperation. The Proposal for this Regulation recommended to combine competences in the supervision and enforcement of competition law and consumer protection in those Member States that already have a public Competition Authority but lack a consumer authority. The Proposal argued that there are positive synergies between the consumer protection and competition dimensions of market surveillance and enforcement (COM(2003) 443 final note 36).
According to the Explanatory Notes to the Act establishing the Netherlands Consumer Authority in 2007, the Dutch government has chosen to create a new authority because on the one hand, most of the then existing supervisory agencies focused on sectoral legislation, whereas consumer protection required a more general supervisor. On the other hand, even though the Netherlands Competition Authority is a general supervisory authority, it was considered to be unfit for consumer protection. It was argued that the Netherlands Competition Authority pursued a different perspective, namely to maintain well-functioning markets which makes workable competition possible and which guarantees an optimal allocation of resources (Memorie van Toelichting, 2005).
Similarly to the Netherlands, the above mentioned Danish, Finnish or Irish institutional mergers were also the results of political decisions, based mainly on budgetary concerns. Besides costs savings, national governments justified these institutional mergers by arguing that a consolidated agency can increase effectiveness of law enforcement and market regulation, enhance the importance of consumer and competition affairs in society, ensure corporate responsibility with regard to consumer interests and streamline administration.
Looking at other EU Member States and beyond the EU we find a wide diversity of institutional designs for the enforcement of competition law and consumer law. These are based on country-specific institutional traditions and legacies. While the European and global harmonisation and convergence of substantive competition and consumer laws are well advanced, similar convergence and harmonisation of institutions has not taken place.
Political scientists have long underlined the significance of institutional design on government performance. Politicians and lawyers well recognize that institutions are a critical and underappreciated driver of public policy that interacts in many subtle ways with substantive rules and decisions. The allocation of regulatory powers into different administrative agency models is today a major issue for national governments and supra-national organizations as they see that the practices and procedures of different institutions influence norm application. It has been argued that the institutional embeddedness of legal rules involves important procedural and institutional complexities and irregularities that influence law enforcement. This is because substantive rules and policies are mediated through the institutions that investigate enforce and adjudicate legal issues and the decision-making processes that these institutions employ. Accordingly, institutional and procedural differences are likely to generate widely different substantive outcomes, even with a similar legislative mandate. The respective institutional contexts will each shape decisions in their own ways and may lead to differing functions of the legal rules and thus potentially very different outcomes. The actions of a regulatory agency, for instance, are strongly shaped by the distribution of resources, powers, and responsibilities between that body and other organizations, including those that oversee it.
Institutional design also challenges the multi-level governance system of EU law enforcement where similar substantive rules have to be implemented through diverging procedural rules and institutional arrangements. In EU competition law, for example, it has been questioned whether consistent policy enforcement and the effective functioning of the European Competition Network requires a certain degree of harmonization of procedures, resources, experiences and independence of the NCAs.
The legal, political and economic community faces the fundamental question of how to decide the allocation of regulatory powers and what are the effects of alternative institutional arrangements on law enforcement. The need to establish normative criteria for evaluating administrative authorities enforcing competition law and other fields of economic regulation has been reflected in every major international organization such as the OECD, UNCTAD, and the EU. Competition law and other regulatory agencies are assessed against a set of administrative law norms relating to institutional design and decision-making processes and trade-offs between the various criteria. These criteria include institutional structure, mandate, rights of defense, institutional performance criteria such as administrative efficiency-due process, independence-accountability, expertise-detachment, transparency-confidentiality public credibility, and predictability-flexibility.
On the basis of these normative criteria the complementarities and tensions between the ways in which competition law and consumer law are enforced has been praised and criticized equally. The synergies and the conflicts of allocating enforcement powers in one or two agencies has been advocated by jurisdictions with integrated authorities and opposed by jurisdictions with separate authorities. In a recent working paper, I discuss the advantages and disadvantages of this institutional integration and come to the conclusion that integration of policymaking and enforcement can take place through separate agencies and separation can exist within an integrated agency. What is critical is how the respective institutional arrangements comply with the emerging set of procedural and institutional norms guaranteeing basic values of a national administrative law system such as due process, public accountability or stakeholder participation. Among these values accountability to the public, consumer-citizen participation through consultation and representation are fundamental, however, not yet commonly defined norms. The democratization of regulatory processes and the role of stakeholders, especially consumers’ participation and consultation during decision making has been significantly strengthened in the liberalization process, which involved provision of services of general economic interest, access to which is considered a fundamental human right. Accountability to the national public and the strengthening of consumer-citizens’ involvement and active participation in policy and decision-making processes should be a necessary component of regulatory governance. The engagement of consumers and consumer groups, which are embedded within regulatory structures can guarantee a form of accountability which is situated between formal processes of consultation prior to decisions, and ex post reviews of performance.
Dr. Kati Cseres is Associate Professor of law at Amsterdam Centre for European Law and Governance. Her personal page can be accessed here.
 The consolidation of these three existing authorities will be realized through two separate bills: the ‘bill on ACM Establishment Act was submitted to the Dutch Parliament and the Second Chamber has accepted it by 2 October, the First Chamber will make a decision by 30 October 2012. The substantive bill planned to be passed before 2014.
Kamerstukken II, 2011-2012, 31 490, nr. 69. Kamerstukken 2011-2012, 33 186 nr. 2 Regels omtrent de instelling van de Autoriteit Consument en Markt (Instellingswet Autoriteit Consument en Markt); Wetsvoorstel stroomlijning markttoezicht ACM, juni 2012
 Regels omtrent de instelling van de Autoriteit Consument en Markt (Instellingswet Autoriteit Consument en Markt) Nota naar aanleiding van het verslag, Tweede Kamer der Staten-Generaal, 2011–2012, 33 186, nr.6 1 mei 201
 OECD, Global Forum on Competition, The interface between competition and consumer policies, DAF/COMP/GF(2008)s4
 United Nations Conference on Trade and Development Effectiveness of capacity–building and technical assistance extended to young competition agencies, June 2011