Relaxing whilst doing Competition Law is not an Oxymoron

Archive for July 29th, 2020

On disclosure and conflicts of interests: three years later, we are in a better place

with 2 comments

A Better Place (@ABPMovie) | Twitter

With so much at stake in competition law disputes, one is hardly surprised by news about corporate funding and/or an academic failing to disclose potential conflicts of interests. These stories are bound to make the headlines every now and then. Two were featured last week (see here and here).

News about potential bad practice (and/or companies fighting by other means) are always concerning. This time around, however, I like to see the glass half full. I am reminded of the situation three years ago, when similar news broke in sensational fashion.

I wrote about disclosures and conflicts of interest at the time (see here) and I invited Cyril Ritter to do the same (see here).

My main concern then (other than the use of academics as fodder in a proxy war) was the absence of guidance: without clear rules on disclosure, any views could be potentially discredited as suspicious (the infamous ‘if you say that, it must be because someone is paying you’).

In that regard, enormous progress has been made. The ASCOLA declaration of ethics, an effort led by Ioannis Lianos, set the tone and defined the gold standard to be followed. Journals – including JECLAP – take the issue much more seriously than in the past (even referees are asked to disclose potential conflicts of interests these days).

A first consequence of the adoption of these guidelines – inspired by the long-standing rules of the American Economic Association – make it easier to identify bad practice.

We have now learned to become suspicious of disclosures that do not tell the whole story. When someone just mentions that they ‘have not received funding for THIS article’ or that they ‘are not involved in THIS matter’, it is typically the case that there is a potential conflict of interest that is being concealed.

A second consequence (and the most important one, in my view) is that clear and meaningful rules protect people that play by them. It is incredibly helpful to be able to clarify from the outset (in a paper or at a conference) that one has nothing to disclose.

Against this background, I am inclined to believe that last week’s news will be, on the whole, a positive development for the competition community. The need to disclose will be taken even more seriously, and I anticipate that key people will be more proactive from now on.

Taking the initiative and directly asking whether there are potential conflicts of interest to disclose will be seen, even more than at present, as the right thing to do (if only because it is fair to those who play by the rules).

The main challenge ahead: consensus and peer review as a safeguard against capture by special interests

The main challenge I see ahead is the risk of capture by special interests. Corporations advance ideas that conform to their agenda and worldview.

These ideas may seek to show that their practices are pro-competitive and/or that someone else’s are anticompetitive. They may also seek to persuade us that the sweeping changes that happen to be in the firm’s interest are also beneficial for society as a whole.

I am not concerned with the dissemination of these theories. It is natural for firms to advance their interests. And it is the case that some of these ideas survive the peer review process because they genuinely advance our understanding of some phenomena.

My fear is that these ideas drive policy before they are subject to proper scrutiny. Peer review and consensus are essential to prevent capture by special interests (something I also mentioned in my feedback on the New Competition Tool). They are the best allies of sound policy in the general interest. It is probably the case that, at this juncture, with so much at stake, peer review and consensus are needed more than ever.

Rushing to make decisions based on ideas that have not undergone proper expert scrutiny is the very opposite of progressive policy: it weakens competition authorities and favours corporate actors with disproportionate access to power and dissemination outlets.

It is true that peer review and the emergence of a consensus take time. Some people who genuinely want to advance the general interest feel that time is of the essence: they believe action is needed as soon as possible.

I understand the frustration some may feel. However, experience teaches us to be cautious: a policy that, on its surface, seems to be in the interest of society as a whole may only serve a small, well-organised pressure group. What is more, the opposite can also be true.

Rules on disclosure will help. Making sure that unscrutinised ideas are treated with the appropriate degree of scepticism, even more so. I am hopeful disclosure will strengthen the latter.

Written by Pablo Ibanez Colomo

29 July 2020 at 5:39 pm

Posted in Uncategorized