Case prioritisation and prosecutorial discretion by competition authorities

Competition authorities must make strategic choices about where to focus their limited resources.1 Case prioritisation and prosecutorial discretion are therefore central to effective competition policy, relating to the cases chosen, discarded or continued. While administrative and prosecutorial competition regimes differ in key respects, both rely on case prioritisation and prosecutorial discretion to deploy resources effectively at the individual project level. Although case prioritisation may most naturally focus on competition enforcement cases, a holistic approach should also encompass other actions, such as mergers, market studies and advocacy, to maximise impact.

To illustrate current practices with case prioritisation, the OECD conducted a short survey and received responses from thirty competition authorities. The survey results provide several insights into how competition authorities make case prioritisation decisions in practice. For example, the results show that authorities employ a range of different approaches to case prioritisation, although there are areas of similarity, such as many authorities having high degrees of discretion in how they select cases and several also publishing guidelines on how they prioritise cases.

Effective case prioritisation should be guided by an authority’s overarching strategy and high-level priorities. To achieve this, competition authorities benefit from having discretion to select which cases to pursue and which to discard. Checks and balances may be appropriate. For example, providing appropriate transparency on the reasons for case prioritisation decisions can be an effective measure to reduce risks of excessive discretion. While providing detailed information on individual cases may be challenging, publishing general guidance on the approach can be useful and many authorities are already doing so. Efforts to promote transparency by explaining how cases are selected can be enhanced if the authority has a dedicated unit for such tasks. Transparency can also help the private sector better understand how cases will be selected, providing more certainty and making it easier to align with the future work of the authority.

Case prioritisation is, in essence, a cost-benefit analysis. Several factors combine to determine these assessments, for example the likelihood and magnitude of potential competition issues and the prospects of success, including at appeal. Other relevant variables include the chances of remedying harm, the economic and social importance of the markets concerned, deterrence effects, the expected costs and complexity of the action, as well as its likely risks. Importantly, cases will be assessed relative to existing activities of the authority and likely alternatives, with the true cost of taking a case being the opportunity cost not to take others. Beyond these considerations, many factors could legitimately drive case prioritisation decisions, including those relating to public interest or highly specific strategic issues. Ensuring these factors are understood across an authority can be useful in ensuring the correct information is collected to assess prospective cases effectively. Competition authorities should also consider how to ensure their case prioritisation decisions reflect the best interests of the organisation, and are not unduly influenced by the incentives of individuals or their biases.

The OECD’s survey shows that authorities use a range of practices regarding case prioritisation decisions. Competition authorities should focus on creating manageable processes that leverage available information and staff experience to steer decisions. Understanding the cost of past actions could help authorities assess future options, as can having detailed knowledge of their current case portfolios. Templates for complainants could also assist in providing better quality information. Balancing relevant factors in practice requires careful assessment, but quantitative approaches can support qualitative judgements to improve case prioritisation decisions.

Case prioritisation is a necessary, but not sufficient, condition for an effective competition authority. Absent a strong pipeline of potential cases, whether competition enforcement, market studies, mergers or advocacy, even great prioritisation decisions will not boost impact. Further, case prioritisation has limited value if authorities are not able to deliver the cases successfully. Alongside ensuring cases are successfully carried out, competition authorities must therefore also invest in generating future cases of potentially high impacts. Strengthening intelligence functions is likely to be an important step on this journey, as is occasionally conducting ex-post assessments. Such assessments not only allow an authority to learn lessons to improve, they also provide a better understanding of the impact of cases, providing the potential to continually select better cases over time.