Case prioritisation and prosecutorial discretion by competition authorities

Prioritisation can take place at multiple levels within a competition authority. Case prioritisation, which is the focus of this note, concerns decisions on which projects to pursue, as well as which not to. In addition, at the organisational level, competition authorities may signal their high-level priorities. This section explores the definitions of these two levels of priority setting, as well as their differences and interactions.

Case prioritisation is important as it allows competition authorities to maximise their impact with limited resources and also effectively guide their work (ICN, 2021[7]). As competition authorities do not have a defined scope of activity like sector regulators, this prioritisation becomes even more important (Jennings, 2015[11]).

Case prioritisation decisions take place at an individual case or action level. This can also include when, and when not, to exercise prosecutorial discretion not to pursue a matter. These decisions revolve around what cases are worth pursuing, continuing, as well as the manner in which they are conducted. Case prioritisation is not an end in itself, but is the process by which an authority ensures it is taking the right cases, in the right way, at the right time.

There are both positive and negative dimensions to case prioritisation. On the positive side, this can involve deciding to launch a case, an ex-officio investigation, for example. On the negative, it could relate to deciding against pursuing one, such as when a complaint is received. As noted above, decisions are also needed beyond enforcement, such as for advocacy, market studies and perhaps to a lesser extent, mergers.

Case prioritisation is not just a one-off decision of whether to pursue a case or not. As cases evolve, a series of explicit or implicit decisions are made, such as it continuing to be worth pursuing. Decisions can also cover how to end cases, for example whether to seek particular remedies or to agree to a proposed settlement. Likewise, not taking up a potential project also reflects a decision. Seen this way, case prioritisation is a dynamic and constant process. As discussed in more detail further below however, for practical reasons decision making often occurs at discrete moments in a case lifecycle rather than constantly.

While case prioritisation decisions typically consider a holistic range of factors, as explored in more detail in Section ‎4, they are likely to also be subject to several constraints. For example, the amount of resources at team level, such as cartels, may already be set. There may also be political or other factors driving individual case decisions.

In contrast to case prioritisation, organisational high-level priority setting considers what the organisation will focus its resources on going forward. This is usually part of the overall strategy of the authority. High-level priorities are made periodically rather than in relation to specific cases. Some authorities set them annually, whilst others define them for longer periods. These priorities can determine how resources are allocated across an authority, for example the size and structure of tool focussed teams, like mergers or cartels. It can also affect where intelligence resources are directed.

Setting high-level priorities is common amongst competition authorities, and some authorities are under an obligation to do so.1 For example, an OECD survey conducted in 2012 found that only three of the 46 authorities surveyed did not set priorities of some description (OECD, 2013[5]). While such high-level priorities can take various forms, it is common for them to focus on two areas:

• Sectors or industries where there is a particular desire to improve competition, for example markets relating to food or healthcare.

• Competition tools or types of conduct, for example cartels or exclusionary abuse.

Launching high-level priorities often communicates to government and the public the objectives of the authority, boosting transparency and accountability. Some authorities consult on their high-level priorities in order to obtain input from external stakeholders. 2 Such an exercise can broaden acceptance and legitimacy of the priorities that are adopted. Box 1 provides examples of the high-level priorities published by competition authorities.

High-level priorities can also reflect factors external to a competition authority. For example, they can form part of the dialogue with government on how the agency will seek to align with their priorities. 3 The nature of these discussions will depend on the institutional set-up of the authority. It may also link to a broader question of how governments prioritise their actions across policy areas, which is not the focus of this paper.

The two types of priority setting are undertaken for different purposes. Case prioritisation helps ensure the right mix of cases for an authority, while high-level priorities provide direction and transparency on their future intentions as part of implementing the overall goals of the organisation. At the same time, they also share similarities. Both reflect a need for competition authorities to operate efficiently and effectively given their objectives and constraints. Both must interact with authorities’ institutional context.

They are also inter-dependent. Many of the considerations that determine priorities at one level of the organisation will also influence them at others. High-level priorities provide a framework within which case prioritisation decisions are made, both theoretically and operationally. Put simply, to achieve strategic objectives, the cases that authorities take should be consistent with the overarching goals of the organisation (Kovacic, 2018[18]). Ultimately, high-level strategies must be implemented through the choice of activities if they are to have any meaning. High-level priorities can also be influenced by individual case prioritisation decisions, for example if a series of decisions to initiate cases in a sector highlights a need to make it a broader priority.

To support this, the OECD survey conducted alongside this paper reveals that competition authorities believe that their high-level priorities have a significant influence on their case prioritisation decisions. Of the 30 respondents to the survey, 25 indicated that it was at least somewhat likely that a case prioritisation decision would be influenced by the authority’s high-level priorities, with seven stating that this was very likely to be the case. Only one respondent indicated that it was somewhat unlikely that a case prioritisation decision would be influenced by the high-level priorities, and no respondents replied that it would be very unlikely.

The structure of an authority will to some extent reflect its high-level priorities, which will predetermine some parameters of case decisions. For example, if high-level priorities suggest that an organisational focus on a particular area of enforcement, there may be constraints on the ability to pursue cases falling in other areas if staff are committed elsewhere. However, these constraints may not be set in stone, and competition authorities may wish to have some flexibility to alter budgets between teams based on the cases they want to prioritise (ICN, 2021[7]).

In summary, the different prioritises operate at different levels, with high-level priorities being decided first at a macro level, but providing a framework to guide micro level decision making. As explored in Section ‎4 below, case prioritisation is then likely to be guided and impacted by organisational priorities, alongside other factors. Case prioritisation can also be a method for operationalising the priorities that the organisation sets itself.