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Neelie Kroes

European Commissioner for Competition Policy

Why we need competitive markets

Figures and graphics available in PDF and WORD PROCESSED

Conference on "Competition, Public Policy and Common Man"

Delhi, 16 th November 2009

Ladies and gentlemen,

I am honoured by your invitation to join you today.

Coming just days after the India-EU business summit, today's conference is yet another sign of the expanded co-operation the EU and other leading economies have with India. It is indeed also a sign of the very helpful international dialogue emerging alongside new bodies like the G-20. I also hope it is a sign of how seriously the European Commission takes its goal of policy convergence amongst the world's competition authorities

To the extent we in Europe can share lessons from our recent competition experience; you have our full support and co-operation.

I should also congratulate you on the theme of this conference. A competition regime's long-term survival depends on the common man – and common woman! – understanding why we need competitive markets. Communicating the benefits of competition and the need for enforcement policy to make sure it can flourish are vital.

In my mind there are two key ideas to deal with. One is easy and the other very difficult.

  • The simple one is that competition helps people to stretch their rupees further. It is a very inclusive form of economy policy. It means more food and consumer goods for families. It means a small business has a better chance to expand, through new opportunities and a cheaper supply chain.

  • The hard fact to deal with is that more competition brings more change and uncertainty. This fact makes communication more important; because the change and uncertainty will happen anyway. If you don't communicate the benefits of competition, you are left only with fear and dislike of competition.

So, communications really is a top priority – each and every day! From cartoons aimed at students to briefing papers for MPs; from speeches to the civil service to press conferences for journalists. Everything helps.

And I encourage you to see beyond criticism that might arise from bold competition enforcement. Any reform or big decision will produce a range of reactions, they will not always be positive. You can of course help to build trust in your work by maximising transparency. Transparency about how and why a decision was made will help to create a strong competition culture, and reduce the ways your opponent can undermine you.

If you will allow me just one moment to reflect on other lessons from my five years as the referee of Europe's Single Market. I think, in particular, we have set a good example on how to undermine cartelists and how to keep abreast of competition issues in fast-changing technology industries. Together, success on these priorities has sent a clear message that no company is above the law.

In terms of our processes, I am very pleased with the progress we have made on two fronts:

  • a stronger focus on the cases they affect consumers the most and

  • greater use of economic analysis in our decisions.

Our decisions now more sophisticated and have greater positive impacts on the European economy.

Of course the crisis overshadows everything these days, but this has helped us make an important related point. Yes you have to be flexible in a crisis, but in such times competition policy is more important than ever. Through communicating this point to experts and the common man alike, and in making efficient decisions, we have proven that competition is part of the solution to our economic problems.

Speaking of banks, if we had not applied the competition rules to banks in Europe, we would be starting to see consumer harm as banks took advantage of the 'free ride.' Instead we decided to work hard to retain our level playing field. I think there is now a consensus in Europe that one can take into account the special circumstances of banks without fundamentally altering the normal competition regime.

Having said that, every country has its own unique economic and political context to consider. And I fully respect that India will decide on issues that affect India; just as Europe decides on the issues that affect Europe.

So I wish you the greatest luck in discussing the many aspects of competition policy and how they can be used to enable prosperity for India in the coming years.

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