The Role of Guidelines in Fostering Competition Policy in Tunisia

8. Recommendations

Abstract

This section presents recommendations for Tunisia to improve its competition policy framework in line with well-established international best practices, particularly related to merger control, fining methodology, leniency programme and compliance programme. In addition, relevant recommendations made in the Peer Review are reiterated.

Tunisia started an ambitious programme to implement an effective competition law and policy. As highlighted in the 2022 Peer Review, the conditions for the competition entities to thrive and to make a significant contribution to achieving competitive markets in the country to the benefit of the country’s consumers and businesses, and leading to increased productivity, innovation, growth and employment are partly in place.

To further improve the legal and policy framework in line with well-established international best practices, this report suggests a number of improvements to the competition enforcement and advocacy frameworks, particularly by the development of competition guidelines in four areas: merger control, fining methodology, leniency programme and compliance programme. A draft document of merger guidelines was already produced by the Tunisian competition authorities, which suggests that this should continue to be their focus in the short-term. Guidelines on fining methodology should be prioritised in a second stage, followed by guidelines on leniency and compliance programmes.

As discussed in this report, competition guidelines should follow a process that includes stakeholder consultation. Specifying the legally non-binding nature of guidelines on courts – despite their legal effects, especially on competition authorities – may also be relevant in Tunisia, where the issuance of such documents is not a common practice.

While competition guidelines can play an important role in fostering competition policy in Tunisia, this should go hand in hand with addressing specific shortcomings in the enforcement and advocacy frameworks. In this context, this report reiterates the relevant recommendations made in the Peer Review.

Based on the analysis provided in chapters 4 to 7, the following recommendations can be summarised:

8.1. Merger control

Tunisia is currently seeking to implement merger guidelines to enhance transparency, legal certainty and predictability of action by competition authorities, in line with international best practices. The current draft should consider addressing the following elements before being submitted to stakeholder consultation:

• In the absence of the implementation of the Peer Review recommendation to transfer responsibility for merger control to the Competition Council, ensure a more co-ordinated approach on the assessment of mergers between the Competition Council and the DGCEE.

• Specify how the competition assessment varies according to the nature of the transaction (i.e. horizontal or non-horizontal mergers).

• Provide further elements regarding market definition, which is particularly relevant since one of the notification thresholds is based on a market share test.

• Elaborate on the nature of the relevant economic test used for assessing mergers, in order to ensure a consistent and transparent review of transactions.

• Further detail how remedies should be set, including with more descriptive examples.

• Establish “safe harbours” to specify the cases that are not likely to raise competition concerns, possibly subject to a simplified procedure.

• Include additional examples and reference to relevant caselaw, providing more details on the substantive analysis and procedures of these cases.

• Introduce a glossary with explanations of relevant terminology.

While issuing merger guidelines can play an important role in fostering merger control in Tunisia, it should be accompanied by reforms in this area (including possible legislative changes) to address specific shortcomings, in particular:

• Implement a two-phase approach, as well as a simplified merger regime to ensure that mergers that do not raise material competitive concerns are subject to expedited review and clearance.

• Introduce merger notification forms, spelling out the required information and documents that the merging parties must submit within the merger notification.

• Review the turnover-based notification threshold and consider reducing the current numerical level, in order to ensure an efficient setting of threshold levels that reflect the reality of the Tunisian economy and guarantee a well-functioning and efficient merger control regime.

• Ensure that gun-jumping infringements are sanctioned, which is necessary to guarantee the efficiency of its merger control regime.

• Consider implementing merger filing fees, in addition to other resources already in place, in order to increase competition authorities’ budget. The filing fees should be reasonable and based on one of the criteria usually adopted by other jurisdictions.

8.2. Fining methodology

The Tunisian competition law framework regarding fines is overall in line with international standards, but there is no established fining methodology. Developing such a methodology can help Tunisian competition authorities ensure a consistent fining policy. This may reduce discretion of administrative authorities when setting fines, which can be useful in judicial review, as courts can rely on an objective procedure previously established. Moreover, this would enhance transparency, legal certainty and general deterrence by allowing companies to understand how heavy the sanctions to which they may be subject are. When developing fining guidelines, the following elements should be taken into account:

• Clearly indicate the objectives of fines.

• Spell out the methodology for setting fines, including the determination of the basic amount, its adjustment according to aggravating and mitigating circumstances and statutory limits of fines.

• Consider the gravity and duration of the infringement when setting fines.

• Whether the firm’s inability to pay can be taken into account and, if so, how.

While issuing fining methodology guidelines can play an important role in fostering competition enforcement and advocacy in Tunisia, it should be accompanied by reforms in this area (including possible legislative changes) to address specific shortcomings, in particular:

• Enable the imposition of adequate fines, especially in cartel cases, in order to increase deterrence of wrongdoings.

• Improve the framework conditions for the enforcement of competition law sanctions by:

  • Removing the automatic suspensive effect when an appeal is made to the Administrative Court against a Competition Council decision.

  • Granting full representation powers to the Competition Council before other public bodies, including the Administrative Court.

  • Providing the Council with the powers to oversee the implementation of its own decisions.

8.3. Leniency programme

Tunisia has adopted a leniency programme for more than two decades, but to date no applications have ever been submitted. The issuance of guidelines can be useful in further promoting the Tunisian leniency programme. In this context, the following elements should be considered in future leniency guidelines:

• Indicate the violations covered by the leniency programme.

• Establish the eligibility criteria and the conditions to apply for leniency.

• Clearly state the benefits from the leniency programme.

• Spell out the procedural aspects of a leniency application, including who is the point of contact in the competition authority that interested parties should approach to submit an application, the possibility to request a marker and the information and evidence that should be presented.

• Explain how and to what extent confidentiality of leniency applications is ensured.

• State the consequences of leniency for civil liability.

• Provide a checklist regarding the elements that must be fulfilled to ensure a complete application, as well as template documents.

In parallel with issuing guidelines, the following actions should be implemented to improve the Tunisian leniency programme:

• Ensure that wrongdoers have adequate incentives to apply for leniency, for instance by:

  • Further engaging in pro-active detection methods, including the use of economics (e.g. collusion factors, industry studies and market screening), use of information from past cases (also from other jurisdictions), industry monitoring (e.g. press and internet, career tracking of industry managers and regular contact with industry representatives), co-operation between agencies (national or foreign competition authorities or other agencies) and technology-led screens (e.g. structural screens and behavioural screens).

  • Guaranteeing that sanctions imposed on anti-competitive behaviour are sufficiently deterrent.

• Abolish the obligation for the Competition Council to consult the government Commissioner prior to enforcing the leniency programme.

8.4. Compliance programme

The development of guidelines can help encourage the adoption of competition compliance programmes in Tunisia. The following elements should be considered when developing compliance programme guidelines:

• Indicate the benefits of compliance programmes, including whether they are considered a mitigating or aggravating circumstance for the purpose of setting fines.

• Recognise that there is no one-size-fits-all approach to compliance programmes, and therefore each firm should implement its own programme taking into account its size, sector of activity and the risks it faces in its day-to-day operations.

• Highlight the importance of management commitment, risk assessment, transparency and documentation, training, reporting mechanisms, as well as regular evaluation and update.

• Provide businesses with template documents that can serve as a starting point for developing compliance programmes.

• Reach out to companies to explain their obligations under competition law and to promote the adoption of compliance programmes in all economic sectors.

The incentives for firms to develop competition compliance programmes are closely linked to the effectiveness of the competition law regime and strength of the competition authority/ies in the country. A well-functioning and robust competition authority can influence how companies perceive the importance of compliance programmes and their willingness to invest in them. In addition to guidelines on compliance programmes, the Tunisian authorities should therefore consider the following recommendations:

• Strengthen the institutional competition law framework, notably by strengthening the mandate and powers of the Competition Council and ensure its independence.

• Strengthen competition enforcement by ensuring that the competition authorities are adequately resourced to effectively and efficiently investigate and prosecute cases. This includes opening investigations and conducting dawn raids where needed, with the aim to ensure a credible deterrent effect.