Welcome to the 17th edition of Rating Enforcement, the annual Global Competition Review survey of the world's leading competition authorities.
As we have done every year since 2001, GCR has analysed antitrust enforcement programmes around the world, both by the numbers and by other metrics, to determine exactly how well they applied their laws and resources to prevent and penalise anticompetitive activity in 2016. We gather quantitative data, such as the amount, in euros, the agency can spend and staffers it can deploy; the number of mergers reviewed and investigations opened and closed; and more. We also look at qualitative aspects of an authority's record, including success in bringing precedential cases, advocating for procompetitive laws and regulations, and increasing public awareness of antitrust enforcement. We strive to ensure our analysis of that data paints an accurate picture of an authority's work and effectiveness.
To some extent, an agency's ability correlates with some obvious numbers: size of budget and number of staff. Given the complexity of competition law and modern economies, the best enforcement requires the resources needed to keep up with the defence bar, and more to spare for cutting-edge inquiries.
But those resources need not strain a government's budget to fund elite antitrust enforcement. France's Competition Authority, for example, has ranked among the world's best enforcers despite a budget more typical of three-star agencies. Germany's Federal Cartel Office also makes a modest budget (relative to the size of the country's economy) go a long way. Of course, both France and Germany benefit from being European Union member states and thus having cross-border mergers and cartels largely handled by the European Commission's Directorate-General for Competition, whose budget is twice that of France and Germany combined.
However, money is not a guarantee of success. Though improving, the Competition Commission of India remains at a two-star rating for now. With a budget of €13.3 million, the agency spends like a three- or four-star enforcer. But it is hobbled by the demands imposed by a legal regime that forces it to review a massive number of complaints, with much of its resources devoted to churning out explanations of why the alleged misconduct does not violate antitrust law.
Each year, GCR sends a detailed questionnaire to the competition authorities canvassing all aspects of enforcement. The data ranges from the size of the authority to the average age and tenure of the staff; from the methodology for setting priorities to the agency's record when defendants appeal its decisions. We also ask for information about the number of merger filings an agency has received and how it has handled those deals, as well as obtaining a detailed breakdown of cartel and abuse of dominance work. These statistics help to paint a picture of the authority as we begin to assess the results of its work, and we appreciate the time and care that the participating agencies put into their submissions so that the global antitrust community can better understand their work. We also ask the head of each agency to submit his or her own assessment of the agency's performance.
Next, we seek confidential feedback from the people who know the authority best: antitrust lawyers and economists, in-house counsel, scholars and local journalists who routinely cover the agency's work. Interviews with leading international competition practitioners allow GCR's reporters to gain insight on the authorities' performance, as well as their professionalism and independence.
During the course of the year, GCR's daily task is to learn and write about enforcers' work, with more than 1,500 news stories published annually. Our briefings highlight antitrust news around the world, from the end of India's Competition Appellate Tribunal to the competition implications of the UK's withdrawal from the EU. The breadth and depth of our news coverage provides an unparalleled resource for determining the strengths and weaknesses of the agencies we review.
GCR also conducts monthly surveys of the competition landscape in different jurisdictions, meeting with prominent figures in the local antitrust bar and interviewing the head of the national competition agency. Since the last edition of Rating Enforcement, we have surveyed Austria, China, Denmark, France, Korea, Mexico, New Zealand, Poland, Spain, Switzerland, Texas and Washington, DC.
We attend every major competition conference, including the International Competition Network's annual gathering and the American Bar Association's antitrust spring meeting; we also host more than a dozen of our own events each year in Europe, the US and Asia.
Reading the results
Authorities appear in Rating Enforcement only if they engage in a significant amount of enforcement activity. Merely signing off on mergers that affect the local economy, for example, does not suffice to qualify as one of the world's leading enforcers. Regardless of its rating, every agency in these pages does important work that merits close attention and attracts the interest of GCR's readership.
Our analysis rates each authority on a scale of one to five, showing how each authority compares to its international counterparts. While no authority is perfect, we believe those that earned five stars are at the forefront of antitrust enforcement worldwide. A lower ranking doesn't indicate that an authority is failing, or ineffectual. Quite the opposite: appearing in the survey at all is an indication that the authority is a meaningful enforcer.
But comparing all authorities on an absolute scale is impossible, given their differing responsibilities and resources. Although the questionnaire filled out by the agencies is a one-size-fits-all template, we understand that the performance of each enforcer depends heavily on available resources and the legal regime and competition culture in each jurisdiction.
This point was made in March 2017 by European commissioner for competition Margrethe Vestager, while explaining proposed new rules to ensure that national competition authorities have the tools needed to be more effective enforcers. Within the EU, she said, member states would need to look at different aspects of their competition programmes. "The European map when it comes to these issues is quite colourful, which is also why it to me doesn't make any sense to give out grades," Vestager said. "How will you weigh up against each other, whether it's looking into the leniency programme, or the ability to give out fines, or to collect the fines? Each and every one will have an issue to consider."
As such, each agency's chapter also includes a performance indicator in addition to the star rating. If an agency is improving upon its previous accomplishments, this is indicated with an "up" arrow. A horizontal arrow shows that an authority performed as expected, while a "down" arrow reflects a disappointing year. Because the star rating is a blunt tool that comes only in whole and half stars, the arrow also shows which agencies are trending up or down.
Rating Enforcement begins with an overview of the quantitative data collected. This includes comparative analysis tables, which show how the authorities measure up in terms of size, budget, staff retention, mergers challenged, fines imposed and the length of investigations. All monetary statistics are presented in euros for comparative purposes.
The remainder of the report consists of individual analyses of each country's performance in 2016, supplemented by a commentary and the agency's own statement.
Where we present staffing statistics, we refer only to the number of non-administrative, competition-focused employees, unless otherwise stated. Also, where we break down the number of staff departures into those who retired and who remained in the civil service, our percentages are a proportion of staff departure figures, rather than the entire organisation.
Furthermore, where we provide figures for dawn raids and for cartel decisions, we are referring to the number of separate matters, not the number of companies involved.