The Role of Guidelines in Fostering Competition Policy in Tunisia

Executive summary

This report analyses the competition guidelines practice in Tunisia. It aims at analysing the current framework conditions for the adoption of guidelines as well as setting out recommendations to support the country’s efforts to improve its enforcement and advocacy framework and align more closely with international best practices.

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

To further improve the legal and policy framework in line with well-established international best practices, this review suggests a number of improvements to the competition enforcement and advocacy frameworks, particularly by developing competition guidelines in four areas: merger control, fining methodology, leniency programme and compliance programme.

The report reviews Tunisia’s draft guidelines on merger control and provides insights for the Tunisian authorities to consider when developing guidelines on fining methodology, leniency programme and compliance programme. This report applies an analysis and benchmarking of the competition guidelines framework and practice across the four areas, comparing the situation in Tunisia with observed practice in selected jurisdictions and best practice policies, as established by OECD instruments and work by the Competition Committee.

Key findings

The OECD’s review has identified a number of shortcomings in Tunisia’s competition law and policy, not the least of which the absence of competition guidelines. The publication of guidelines by administrative authorities is indeed not a common practice under Tunisian law.

The Tunisian competition law framework regarding merger review has a series of limitations, including a very high turnover-based notification threshold and the absence of two-phase and simplified merger control regime, as well as the lack of merger notification forms. If companies implement the transaction prior to notification and approval when it fulfils the conditions listed in the law (so-called gun jumping), they may be fined up to 10% of their turnover in Tunisia. While Tunisian rules related to gun jumping seem to be in line with international best practices, the absence of enforcement deviates from the international practices. Tunisian competition authorities have never sanctioned companies for gun jumping, even though non-notified transactions that fulfilled notification thresholds were identified.

The Tunisian competition law framework regarding fines for anti-competitive practices is overall in line with international standards. However, there is no established fining methodology. In many infringement decisions no pecuniary sanctions are applied. While this used to be more common in the past, there are still some cases where no fines have been imposed. This significantly reduces deterrence effects, also contributing for low incentives for infringers to use leniency applications.

The Tunisian competition law follows international standards regarding leniency programmes, but despite being in place for over 20 years, no application has ever been submitted to date. For leniency programmes to work, there must be a high risk of detection and significant sanctions, which does not seem the case in Tunisia. Anti-cartel enforcement in Tunisia is still low, and some cartel decisions were handed without a fine being imposed, significantly reducing their deterrent effect.

Competition compliance programmes are not common in Tunisia, regardless of the size of the firm. The limited enforcement, the absence of guidelines and the lack of clear roles and tasks allocation between the DGCEE and the Competition Council when it comes to competition advocacy do not facilitate the promotion and adoption of compliance programmes by Tunisian firms.

Key recommendations

To further improve the competition policy framework in line with well-established international best practices, this review suggests a number of improvements to the competition guidelines practice.

A draft document of merger guidelines was already prepared 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.

Merger control

The current draft merger control guidelines 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.

Fining methodology

Developing fining methodology can help Tunisian competition authorities ensure a consistent fining policy. 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.

Leniency programme

The issuance of guidelines can be useful in further promoting 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.

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.

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, providing additional elements to be taken into account by the Tunisian government.