Competition Impact Assessment

Government agencies are strongly encouraged to assess the impact of their initiatives on competition in the affected markets during the early part of their internal process and consider alternative options to reduce any adverse impact on market competition. To assist government agencies to understand the competition impact of their initiatives, CCCS has published the "Government and Competition: A Toolkit for Government Agencies" ("Toolkit") and the Competition Impact Assessment Checklist ("CIA Checklist").

As a first step, government agencies are encouraged to undertake a quick self-assessment using the CIA Checklist set out below. If the answer is ‘yes’ to any of the questions, government agencies should proceed to perform a thorough competition impact assessment using the principles in the Toolkit. Government agencies can also seek CCCS's advice with regard to the competition impact of their initiatives.

Competition Impact Assessment Checklist

In affected markets identified, does the proposed initiative:

1) Limit the number or range of sellers?

For example, does the proposed initiative:

Grant exclusive rights to a seller for the provision of a product (for example, divestment of government-owned assets)?
Involve procurement from a single or restricted group of sellers?
Create a form of licensing scheme for sellers?
Significantly raise the cost of entry or exit for a seller?

2) Limit the ability of sellers to compete?

For example, does the proposed initiative:

Control or substantially influence product price, quality or choice, for example,
- Issuing a schedule to standardise product price, quality or choice across sellers?
- Set product or quality standards that (i) advantage some sellers over others or (ii) are unnecessarily high relative to consumers’ needs?
- Limit ability of sellers to introduce new products or supply existing products in new ways?
- Limit the geographic area in which a seller can operate or types of customers it can serve?
Limit the freedom to advertise or market products?
Raise the costs of some sellers relative to others?

3) Reduce the incentive of sellers to compete vigorously?

For example, does the proposed initiative:

Facilitate market players to set rules or engage in practices that reduce the need for them to compete under the pretext of self-regulation?
Require or encourage the exchange of commercially sensitive information between sellers (for example, prices, output, sales or cost) which may facilitate collusion?
Facilitate the sharing of resources between sellers that constitute a key cost component of their businesses?
Restrict the ability of sellers to grow the size of their business?

4) Limit the choices and information available to consumers?

For example, does the proposed initiative:

Limit the ability of consumers to decide which seller to purchase from?
Increase the cost (or inconvenience) of switching sellers for consumers?
Reduce or limit information important for consumers to make purchase decisions effectively?