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Impact of Competition Advocacy and Market Unity Reforms in Spain

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ABSTRACT

The Spanish National Markets and Competition Commission (CNMC) conducts a wide range of advocacy activities, from market studies and opinions on draft laws and regulations to court challenges against regulations and administrative activities that hinder competition. The CNMC has traditionally found it difficult to monitor the effectiveness of its advocacy activities, and to ascertain compliance with its large set of recommendations. Moreover, some recommendations need to be well backed by impact data to ensure support. However, these analyses are resource and time consuming and cannot be performed for every advocacy act. To address these shortcomings, the CNMC submitted a project to the European Commission’s 2017-2020 Structural Reform Support Program. This has resulted in a project funded by the European Union and implemented between September 2020 and March 2022 by KPMG and VVA, under supervision of the CNMC and the European Commission.

Results of the Study

The project was structured around two milestones. First, the construction of a database measuring compliance of public authorities with CNMC’s recommendations. The analysis shows that more than 60% of CNMC’s recommendations over the period 2013-2019 have been followed. Second, the design of a methodology to assess the impact of CNMC’s recommendations. This methodology was applied to 12 specific advocacy actions. The project estimated that compliance with CNMC’s recommendations would trigger a direct monetary impact of between 2,000 and 2,300 EUR million, by way of lower prices, shorter waiting times, savings for public administrations and higher turnover for firms.

Lessons learned

The project highlights the significant degree of compliance of CNMC´s recommendations and the positive impact that efficient economic regulation can have on economic outcomes and consumer welfare. It is an exercise of transparency, impact assessment and accountability that will build in the credibility of the CNMC. The Study has helped to build a stronger case for pro-competitive reforms in Spain, as it shows direct and potential impact of its recommendations. The Study will also have a future impact. First, it will enable the CNMC to keep track of compliance with its proposals, by continuing the project’s database. Second, it will improve the effectiveness of its work, by identifying lagging sectors and promising areas for intervention. Finally, the project has served to establish an impact assessment methodology that the CNMC will use in the future to measure the effectiveness of its actions, incorporate good practice, and increase the degree of compliance with future recommendations.

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