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27.07.2016 Analysis: Part 1 GCR Global Competition Review

http://globalcompetitionreview.com/surveys/article/41402/analysispart1 1/21

RATING ENFORCEMENT 2016

ANALYSIS: PART 1Wednesday, 6 July 2016 (2 weeks ago)

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Rating Enforcement: Analysis Part 1

It remained the case, throughout 2015, that the authorities with thebiggest staff are among the best in the world; however, there aresome notable outliers in that simple analysis. Year after year, thebiggest authority is always Russia’s Federal Antimonopoly Service,which covers enormous territory and delves into even small mergers.Other agencies that have responsibility for more than antitrust showhigh total staff numbers. For example, Colombia, which is new to RatingEnforcement, tasks its Superintendence of Industry and Commerce withprotecting consumers and intellectual property as well ascompetition. The US Federal Trade Commission, Japan’s Fair TradeCommission, and the Australian Competition and ConsumerCommission also look after consumer protection in addition to theirantitrust mandate. Meanwhile some authorities, notably in Germanyand France, perform excellently despite not having a huge staff. Butin general, the large workforces being at the top of the table makessense, as they are policing some of the world’s biggest economies.

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For new entrant Romania, a sizeable staff has not necessarilytranslated to effectiveness, even though it sits in the top half of thetable. Singapore, another new entrant, debuts as one of the betterauthorities in the world, despite having just 62 total staff. Chile’sauthority is still an example of an agency that punches above itsweight, remaining one of the best enforcers in Latin America despitehaving only 120 staff.

Table 1: Size by number of staff

Authority No. of staff

Russia 3,260

Colombia 1,200

US (FTC) 1,162

Japan 838

Australia 780

DG Comp 752

US (DOJ) 697

UK 599

Netherlands 54

Korea 535

Spain 515

Poland 464

Canada 394

Mexico 384

Brazil 349

Germany 347

Turkey 340

Romania 313

Italy 287

Denmark 254

Czech Republic 226

New Zealand 209

France 194

Sweden 177

Pakistan 145

Finland 123



Israel 121

Chile 120

Norway 101

Greece 94

Ireland 86

Portugal 82

Switzerland 76

Lithuania 66

Singapore 62

Latvia 46

Belgium 41

Austria 34

(Click for larger image)

Table 2: Proportion of competition staff

Authority No. of staff

Chile 100

DG Comp 100

India 100

Latvia 100

Norway 100

Switzerland 100

US (DOJ) 100

Belgium 95

Japan 93

Korea 89

Israel 88

France 87

Austria 79

http://www.globalcompetitionreview.com/cdn/images/gcr/surveys/re_extras/analsyis-graph1-re2016.jpg



Austria 79

Russia 78

Portugal 77

Sweden 73

Germany 71

Greece 68

Lithuania 68

Canada 67

Singapore 66

Mexico 65

Romania 63

Brazil 45

Finland 45

New Zealand 44

UK 44

Italy 42

Australia 41

Turkey 36

Denmark 34

Netherlands 32

Spain 32

Poland 31

US (FTC) 30

Czech Republic 26

Ireland 26

Pakistan 21

Colombia 8

There is little correlation between the percentage of total stafffocusing on competition and the performance of the agencies, atleast for the top enforcers. Three of the weaker competition enforcersin our rankings – Ireland, the Czech Republic and Pakistan – havesome of the lowest percentages of total staff working on competition,as many instead are devoted to consumer protection. The mainoutliers are India and Belgium: countries that struggle withcompetition enforcement despite having 100% and 95% respectivelyof their staff focused on it.



Regarding the best enforcers in the world, there is much lesscorrelation – while the DoJ’s antitrust division has 100% of its stafffocus on competition, the FTC only has 30%, with France andGermany falling in between. Any attempt to determine whether apurely competitionoriented versus a mixed mission that includesconsumer protection is better has to contend with the two USantitrust agencies representing both models and performing well yearafter year.

Table 3: Net employee gain/loss

Authority Competition Staff 2014 Competition Staff 2013 No. gained

Russia 705 514 191

US (DOJ) 130 66 64

Mexico 87 36 51

US (FTC) 81 54 27

DG Comp 83 62 21

India 36 20 16

UK 37 22 15

Australia 41 28 13

Colombia 19 7 12

Denmark 20 8 12

Netherlands 12 4 8

Pakistan 12 4 8

Canada 29 25 4

Singapore 6 2 4

Israel 17 14 3

New Zealand 21 18 3

Norway 9 6 3

Poland 13 10 3

Latvia 9 7 2

Romania 9 7 2

Austria 3 2 1

Brazil 33 32 1

Switzerland 3 2 1

Germany 4 4 0

Spain 8 8 0



Belgium 1 2 1

Chile 16 17 1

Lithuania 7 8 1

Czech Republic 1 3 2

France 17 19 2

Italy 0 2 2

Sweden 12 14 2

Finland 4 9 5

Greece 0 5 5

Ireland 0 6 6

Portugal 1 7 6

Korea 21 36 15

Turkey 0 15 15

Japan 63 84 21

Last year demonstrated again that massive fluctuations in staff sizeare rare at competition authorities. In general, 2015 was a good yearfor the authorities’ hiring, with most staffs growing in size. Sixantitrust agencies had new employees represent doubledigitpercentages of their staff – most notably Pakistan, which grew 27%to 30 competition enforcers, and Mexico, which added 51 workers toan already robust agency for a 20% growth. But it was not a goodyear for everyone. The Turkish Competition Authority lost about 10%of its staff, and some of the smaller authorities also lost close to thatamount. In those agencies, the effects of gaining or losing even a fewpeople are felt much more than somewhere like the Russianauthority, which constantly has a competition staff of at least 2,000workers.

Notably, the US Department of Justice and Federal TradeCommission continue to grow – each of the agencies’ competitionenforcement staffs grew by almost 10% in fiscal year 2015, as theycontinued to rebound from the budget cuts and hiring freezes of whatantitrust division chief Bill Baer called the “inexplicable” government



shutdown in 2013. Obviously there is a glaring hole in the FTC’supper echelon, with only three of the five commissioners present. Nosigns indicate that Joshua Wright’s and Julie Brill’s seats will be filledin the midst of a presidential election and Democrat Barack Obama’sfinal year facing a majorityRepublican Senate.

The numbers continue to defy logic in terms of keeping agencies leanand employing a small percentage of administrative staff in acompetition authority (see table 4). At the top of the list – where insome cases the agency has no administrative competition staff – areIndia, Ireland and Turkey, three authorities that have had a toughtime with competition enforcement. At the other end of the list – theagencies that have the highest percentage of administrative staff –are some worldclass enforcers, including the DoJ and DG Comp, aswell as Germany and Spain. As was the case in last year’s RatingEnforcement, Japan remains the outlier in this analysis, with 96% of its777 competition employees working in a nonadministrative role. Ofparticular note, however, is the FTC’s effort to become leaner. In2014 a whopping 42% of the competition staff was administrative; in2015 that number fell to 10%.

Table 4: Percentage of nonadministrative staff

AuthorityPer cent ofcompetition

staff

Per cent of total staff whoare NAC staff (enforcers)

India 100 100

Japan 93 89

Israel 88 83

Latvia 100 83

Chile 100 82

Belgium 95 80

Switzerland 100 80

US (DOJ) 100 78

Norway 100 75



Austria 79 74

France 87 69

Korea 89 68

Sweden 73 67

Russia 78 65

Lithuania 68 64

Portugal 77 64

Singapore 66 64

DG Comp 100 63

Greece 68 61

Romania 63 61

Canada 67 55

Mexico 65 54

Germany 71 43

Finland 45 41

New Zealand 44 40

Australia 41 38

UK 44 38

Turkey 36 36

Brazil 45 35

Italy 42 34

Denmark 34 32

Netherlands 32 28

Poland 31 28

US (FTC) 30 27

Ireland 26 26

Czech Republic 26 24

Spain 32 21

Pakistan 21 16

Colombia 8 7

Statistics show that very often, less established authorities have ahigher percentage of women working on competition enforcementmatters than those authorities that top our table. For the second yearin a row, Greece, Lithuania and Latvia have the highest percentagesof women enforcers compared to other enforcers. Additionally, theLithuanian Competition Council’s proportion of women to men



increased by 7% from 2014 to 2015, moving it to the top of the list.It’s important to note that Lithuania and Latvia are two of the smallestagencies in our survey; both have fewer than 50 total competitionenforcement staff. Meanwhile, Korea and Japan appear at the bottomof our list; each boast staff of more than 400 and 700 people,respectively.

Table 5: Proportion of female staff

Authority Per cent female staff Per cent male staff

Lithuania 19 81

Latvia 22 78

Greece 25 75

Russia 38 62

Italy 39 61

Portugal 39 61

Canada 41 59

Colombia 41 59

UK 41 59

Australia 42 58

Spain 42 58

US (FTC) 42 58

Denmark 43 57

Romania 43 57

France 48 52

Poland 48 52

Chile 49 51

Czech Republic 49 51

Norway 49 51

Sweden 49 51

DG Comp 51 49

Finland 51 49

Belgium 52 48

Singapore 52 48

US (DOJ) 55 45

Brazil 56 44

Germany 56 44

Mexico 56 44



Mexico 56 44

Turkey 56 44

Netherlands 57 43

New Zealand 57 43

Pakistan 57 43

Israel 60 40

Austria 64 36

India 64 36

Switzerland 65 35

Korea 68 32

Japan 80 20

Table 6: Average age of competition enforcers

Authority Average age of nonadmin staff

Korea 45

Belgium 44

Portugal 44

Romania 44

Germany 44

Italy 43.6

Spain 43

Canada 42

Japan 42

Netherlands 42

New Zealand 42

US (FTC) 42

Greece 41

Sweden 41

UK 41

DG Comp 40.5

Finland 40

France 39.4

Austria 39

Poland 39

Switzerland 37.5

Australia 37

Denmark 37

Norway 37



Norway 37

Chile 36

Colombia 36

Lithuania 36

Russia 36

Czech Republic 35

Israel 35

Latvia 35

Turkey 33.4

Singapore 33

Mexico 32

Pakistan 32

Brazil 31

Practitioners interviewed by GCR frequently commented on theprofessionalism of staff that conduct merger reviews, cartel casesand abuse of dominance investigations. Lawyers tended to givehigher praise to authorities’ units with more experienced enforcers,as they tend to handle cases more efficiently. There also appears tobe a clear correlation between the average age of competitionenforcers and the average tenure of enforcers’ staff; authorities withthe highest average age of employees also tend to have the longestaverage tenures.

For the second year in a row, Korea’s Fair Trade Commission (KFTC)came in first in both categories. Japan, Germany and Italy have alsoconsistently placed high on the two tables, although the Koreanauthority significantly outpaces its peers with an average tenure of 25years. Meanwhile, Mexico and Brazil once again remained at thebottom of the pair of lists. Spain, however, seems to not follow thepattern – the average age of the authority’s staff was 43, while theaverage tenure is relatively low at fourandahalf years, laggingbehind several peer agencies. The majority of authorities reported anaverage staff member age of less than 40, and more than twothirds



of the countries surveyed had employees with an average tenure offewer than 10 years.

Overall, the average tenure of staff at authorities remained relativelyconsistent from 2014 to 2015, with only minor changes. The meansat agencies including Switzerland, Italy and the European Uniondecreased by a year or less, while Sweden’s and Australia’saverages held steady at six and seven years, respectively. Belgium,Germany and Poland saw modest increases of only a year.

Table 7: Average tenure of enforcers’ staff

Authority Average tenure of nonadmin staff (years)

Korea 25

Japan 16.8

Germany 12

Belgium 11

US (FTC) 11

Canada 10

Italy 10

Poland 10

Romania 10

Finland 9.5

Netherlands 8.5

Turkey 8.4

Portugal 7.9

Australia 7

DG Comp 7

Lithuania 7

New Zealand 7

Greece 6.5

Latvia 6.5

Switzerland 6.5

Sweden 6

Denmark 5.8

Norway 5.5

Chile 5.2



Chile 5.2

France 5.1

Pakistan 5

Czech Republic 5

Russia 4.5

Spain 4.5

Israel 4

Singapore 3.6

Brazil 3

Colombia 3

UK 1.25

Mexico 1

Table 8: Proportion of enforcers’ staff with more than five years’ experience in the private sector

AuthorityNo. of staff with

more than 5 years inprivate sector

No. ofnon

adminstaff

Per cent nonadmin staff withmore than 5 years' private

sector experience

Portugal 28 63 44

Italy 38 121 31

Latvia 14 46 30

Sweden 35 130 27

France 35 168 21

Greece 12 64 19

Netherlands 33 176 19

Belgium 7 39 18

Russia 423 2553 17

India 16 103 16

Norway 14 101 14

Singapore 5 41 12

Austria 3 27 11

Denmark 8 87 9

Finland 5 55 9

Israel 6 106 6

UK 12 264 5

Lithuania 2 45 4

Chile 5 120 4

Korea 15 475 3

Spain 4 163 2



Japan 18 777 2

Poland 3 142 2

Germany 5 247 2


Pakistan 0 30 0

Romania 0 197 0

Turkey 0 122 0

Similar to staff experience at an authority, the number of attorneyswith exposure to the private sector can also improve the competencyand effectiveness of a competition enforcer. Attorneys who haveworked on both sides of the aisle are often better at communicatingwith opposing counsel, particularly when it comes to merger reviews.

Several authorities surveyed by GCR declined to report their number ofstaff with more than five years of private practice experience. Butmany countries did, and those that sit atop the table – Portugal, Italyand Latvia – all saw significant declines in their percentages of nonadministrative staff with more than five years’ private sectorexperience. Portugal’s Competition Authority dropped from 51% lastyear, but remains at the top. Meanwhile, the Latvian and Italianagencies declined from 48% and 40%, respectively. Several otherauthorities – France, Greece, Belgium and Russia, for example –also reported decreases in their numbers.

Meanwhile, India, Israel and Sweden saw noteworthy growth in staffwith fiveplus years of private sector experience. While only havingone such staff member last year, Israel now has six employees with ameaningful amount of private bar experience.

It is important to note that although there are benefits for authoritiesto employ attorneys that have worked in private practice, many wellestablished agencies do not have large numbers of privatesectorsavvy staff. Both Korea and Japan have consistently had the highest



amount of tenured competition staff over the past few years, but onlythree percent or less of their attorneys have worked in the privatesector for a notable period of time. Overall, a majority of the enforcersreporting to GCR said less than onetenth of their staff has significantprivate practice experience.

Table 9: Highest levels of attrition

Authority No. of staff wholeft

Per cent of NAC staff wholeft

Russia 514 29

Brazil 32 27

Ireland 6 27

Pakistan 4 27

Chile 17 23

New Zealand 18 22

India 20 19

Lithuania 8 19

Finland 9 18

Latvia 7 18

US (FTC) 54 17

Mexico 36 16

France 19 14.1

Israel 14 14

DG Comp 62 13

Portugal 7 13

US (DOJ) 66 12.2

Canada 25 12

Japan 84 11.3

Sweden 14 11

Turkey 15 10

UK 22 10

Australia 28 9

Denmark 8 9

Greece 5 9

Korea 36 9

Norway 6 8

Poland 10 8



Colombia 7 7.2

Spain 8 7

Austria 2 6

Belgium 2 6

Czech Republic 3 5

Singapore 2 5

Romania 7 4

Germany 4 3

Switzerland 2 3

Italy 2 2.1

Netherlands 4 0.7

Due partly to the sheer size of the staff, Russia always has thehighest rate of attrition in our survey. This year it also topped thetable for the proportion of nonadministrative competition staff todepart, relative to total staff. The move from second to first came notbecause attrition at Russia’s Federal Antimonopoly Service hasworsened – it actually fell by 1% – but because the authority that hadthe highest percentage of leavers in 2014 improved significantly.After a year in which nearly a third of competition enforcers quitChile’s National Economic Prosecutor’s Office, the agency in 2015reduced its level of attrition to 23%. Admittedly, at a smaller authoritysuch as the FNE, a few people can make a big difference: thenumber of staff departing the agency dropped from 23 in 2014 to 17in 2015, but it brought Chile from first to fifth.

Given that relatively minor changes in staff can appear to make anoutsized difference at smaller agencies, one should be cautiousabout reading too much into the 27% attrition rates at Pakistan’s andIreland’s competition authorities – they lost four and six staffersrespectively in 2015. On the other hand, these also are agencies thathave suffered destabilisation recently: Ireland, through the merger ofits Competition Authority into a dualrole Competition and ConsumerProtection Commission; and Pakistan through a year and a half spent



without a chairperson.

Mexico’s Federal Economic Competition Commission continues toshow ever more success in retaining its wellrespected staff. Aziz &Kaye partner Luis Alberto Aziz says the authority offers “really highwages compared to private practice.” The workload at COFECE islighter than at the telecommunications regulator, he adds. Aftercutting attrition from 40% in 2013 to 24% in 2014, COFECE broughtthe rate in 2015 all the way down to 16% – a figure historically moretypical of its fivestar neighbours to the north.

Speaking of the US antitrust agencies, the Federal TradeCommission coincidentally had exactly the same number ofdepartures (54) and percentage (17) in 2015 that it did the yearbefore, but the Department of Justice’s antitrust division’s attrition fellfrom 18% in 2014 to 12% in 2015. This disparity between the USFTC and US DoJ appears to be part of a multiyear trend: during2013, the former reported only 22 members of the nonadministrativecompetition staff, or 7%, had left.

Table 10: Proportion of enforcers retiring

Authority No.retiring

No. of staff wholeft

Per cent of NAC who left whoretired

Belgium 1 2 50

Germany 2 4 50

Italy 1 2 50

Romania 3 7 42.9

Canada 7 25 28

Spain 2 8 25

Finland 2 9 22.2

Norway 1 6 16.7

Sweden 2 14 14.3

US (DOJ) 9 66 13.7

US (FTC) 7 54 13

Denmark 1 8 12.5



Denmark 1 8 12.5

Lithuania 1 8 12.5

Russia 44 514 8.6

Japan 7 84 8.3

Korea 3 36 8.3

France 1 19 5.3

India 1 20 5

Australia 1 28 3.6

DG Comp 1 62 1.6

Austria 0 2 0

Brazil 0 32 0

Chile 0 17 0

Colombia 0 7 0


Greece 0 5 0

Ireland 0 6 0

Israel 0 14 0

Latvia 0 7 0

Mexico 0 36 0

Netherlands 0 4 0

New Zealand 0 18 0

Pakistan 0 4 0

Poland 0 10 0

Portugal 0 7 0

Singapore 0 2 0

Switzerland 0 2 0

Turkey 0 15 0

UK 0 22 0

Korea’s Fair Trade Commission has seen some of the biggest swingsin the direction of those who departed the competition authority. In2013, 21 of the 36 leavers – 58% – retired, while seven of thoseleaving remained in the civil service. That meant fewer than a quarterwere going into the private sector after their experience at thecommission. The next year, fully twothirds of the departures wereput down to retirement. But last year, half of the agency’s 36departures could potentially go into the private sector with the KFTC



on their résumé. The shift has come even as the average age of nonadministrative competition staff has crept up, from 41 in 2013 to 45 in2015.

Jae Hwan Lee, a partner at Shin & Kim, notes that an ethics law barssenior civil servants for three years from working in the private sectorin a field related to their government service; junior officials arebarred for only one year. “Therefore, some want to go private beforebeing promoted to senior positions, and that may contribute toexodus of junior or middlelevel civil servants from the government,”Lee says. “This trend seems to be remarkable as it is relatively easierfor the government employees in the KFTC to find appropriate privatepositions.” He and Bae Kim & Lee partner Seong Un Yun both notethat the commission’s January 2013 relocation from Seoul to SeJong City may have led to an exodus from the agency that year. Yunadds that private sector demand for the KFTC experts from theprivate sectors “has grown continuously” at both law firms and largecompanies.

The DirectorateGeneral for Competition at the EuropeanCommission remains an agency through which civil servants rotate,as 95% of staff leaving DG Comp in 2015 remained in civil service –nearly the same rate as 2014. The “revolving door” still has notbecome much of a phenomenon on that side of the Atlantic. Thenagain, civil service also appears to have become more attractiveeven in the US, where between 2014 and 2015, the FTC went from9% to 14% of leavers staying in government, and the DoJ from 17 tonearly 23%. At the latter agency, one could say the example is set atthe top: assistant attorney general Bill Baer left the antitrust divisionin April 2016 to become acting associate attorney general, the thirdhighestranking official at the department.



Table 11: Proportion of enforcers remaining in civil service

Authority No. remain incivil service

No. of staffwho left

Per cent of leavers remainingin civil service

DG Comp 59 62 95.2

Japan 70 84 83.3

Spain 6 8 75

Ireland 4 6 66

Greece 3 5 60

Austria 1 2 50

Belgium 1 2 50

Italy 1 2 50

Singapore 1 2 50

Sweden 7 14 50

Finland 4 9 44.4

France 8 19 42.1

Korea 14 36 38.9

Czech Republic 1 3 33.3

Norway 2 6 33.3

Netherlands 1 4 25

US (DOJ) 15 66 22.7

Australia 6 28 21.4

Brazil 6 32 18.8

Portugal 1 7 14.3

US (FTC) 7 54 13

Lithuania 1 8 12.5

Poland 1 10 10

Israel 1 14 7.1

Russia 29 514 5.6

UK 1 22 4.6

Chile 0 17 0

Denmark 0 8 0

Germany 0 4 0

India 0 20 0

Latvia 0 7 0

Romania 0 7 0

Switzerland 0 2 0



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