Working Paper No. 07-07:
The U.S. Federal Trade Commission and Competition Advocacy: Lessons for Latin American Competition Policy

Author(s):

Todd Zywicki, James L. Cooper

Date Posted: 2007

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Abstract:

Competition authorities have several tools at their disposal in crafting a competition policy.  Most prominent are litigation and merger review.  A less-recognized but often effective tool, however, is "competition advocacy."  Broadly, competition advocacy is using persuasion, rather than coercion, to convince government actors to pursue policies that further competition and consumer choice.  Competition advocacy can be especially useful in attacking government-created regulatory barriers to competition and in cultivating a "culture of competition" to educate the public on the economic benefits of competition as the organizing principle of the economy.  From a cost-benefit analysis, competition advocacy can often generate substantial pro-consumer outcomes at low marginal cost.

Fostering a vigorous competition advocacy program can be especially valuable in Latin American countries that historically have had heavily-regulated economies and a weak culture of competition.  This article draws on the experience of the Competition Advocacy Program of the United States Federal Trade Commission during the past 30 years to provide lessons for Latin American competition authorities seeking to build competition advocacy programs.  This article is a chapter in a book on Latin American antitrust law and explains how competition advocacy can be an important and fruitful element of a vigorous competition policy in these developing economies.