(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
- In line with the dismissal of Norges Bank, LO economist Stein Reegård told Ny Tid last week, about the incoming government's desire for a dismissal of the Norwegian Competition Authority. He characterizes the plans as a "purely liberal system". Ny Tid's final reading of the government declaration reveals that increased competition, also for public services, is one of the new government's flagship issues.
Competition Authority
One of the most dramatic formulations in an otherwise woolly government platform is found in competition policy: "Strengthen competition policy, among other things by giving the Norwegian Competition Authority a freer and more independent position in relation to the administration," it says in a dash.
The new government's line could have dramatic consequences in a number of areas. In plain language, this means that the Government is reluctant to intervene in the Norwegian Competition Authority's assessments. This means, for example, that politicians should preferably not review the Authority's assessments in merger cases. One example could be the SAS-Braathens merger. Here, the Norwegian Competition Authority has worked actively to ensure that other interests – not least Trygve Hegnar – can take over Braathens so that competition is secured. Another example can be found in the field of culture:
When the Norwegian publisher association and the Norwegian bookstore association negotiated the book industry agreement last, in 1998, the Competition Authority set foot. Minister of Labor and Administration Laila Dåvøy (KrF), for its part, reviewed the Authority's assessments and allowed the anti-competitive agreement. At that time, however, the majority of the government parties were positive about the agreement. Now, KrF is immediately in government with two parties who believe the deal is unlucky: Left and Right.
With free competition and greater power to the Competition Authority as declared martial law, it is highly uncertain whether the new government, if it stays so long, will review the audit next time the agreement is up for review, in 2004.
The book industry
The book industry agreement is about regulating the sale of fiction and professional literature in Norway. The short version is as follows: On the one hand, the agreement prevents the publishers from selling school books through channels other than the bookstores. This ensures the survival of a number of small district bookstores, who receive important income from school book sales. On the other hand, the bookstores undertake to take in a wider range of literature than is actually the market for. This is how the publishers also come out in the market with books they would otherwise have had trouble selling. The agreement also ensures a fixed price for books in Norway.
The critics have objected that the agreement contributes to higher prices for school books, and that it is therefore the students who pay the bill. If the publishers could sell the school books freely over the internet, directly to the schools or otherwise bypassed the bookstore link and the fixed price, the prices could be lower. This was also the view of the Competition Authority. The central government's position, however, was that the book industry agreement was important both to secure the district bookstore and to ensure a wide range of literature to the public.
In 1998, when the previous agreement was up for negotiation, the industry itself signaled that they wanted a "lasting protection" of the industry agreement. KrF's Ola T. Lånke was positive, while the Conservatives, among others, opposed.
- The industry must adapt to reality in a competitive world. I see no reason why we should erode the competition law any more than we have already done. As we know the case today, the Conservatives would vote against a proposal for a more permanent protection of the industry agreement, Conservative Trond Helleland told Aftenposten in December 1998. During its national meeting in May this year, the third government party, the Liberal Party, agreed to repeal the book industry agreement.
However, the state is not a party to the agreement – which has been entered into directly between the publishers and the booksellers. They can thus to a small extent dictate the content. But the Norwegian Competition Authority has the power to stop an agreement, unless it is reviewed by the Ministry of Labor and Administration.
Not worried
Director Randi Øgrey of the Norwegian Bookstore Association says she is not yet concerned about the future of the book industry agreement, despite the signals from two of the government parties and the wording in the government statement. She points out that the current agreement is valid until the end of 2004, and she assumes that the agreement will be respected until then.
- The agreement does not expire until 2004, and it is a relatively long time. We in the industry ourselves must have a discussion all the time about the agreement. Are we happy with the agreement we have now? Are there other options? she says, and points out that the industry itself must put itself in a situation that makes them come out positive from the next round in three years. She also emphasizes that the book industry agreement balances the rights and obligations of the two parties, and that changes in one area could have consequences for other areas.
- The government declaration also contains elements that we believe are positive, such as the scholarship scheme for textbooks, Øgrey emphasizes.
Nor does acting director of the Norwegian Publishers' Association, Paul M. Røthe, tremble in his trousers over the new government's line. He points out that very different governments have approved book industry agreements over the years. – We have renewed the agreement under various regimes, he says.
Røthe also points out that it is long until 2004, and says that the Publishing Association has no preparedness so far ahead of time. Like Øgrey, he also points out that the incumbent government's proposal for a school book grant is moving in a positive direction.
Scholarship versus lending scheme for school books has been a contentious issue between, for example, the Right and the Labor Party. While the AP government has set aside money for a school books lending scheme, the new government wants to give the students a scholarship to buy books themselves. The book industry expects greater revenue from the Bondevik Government's plan.
Public services
In other areas, too, the new government emphasizes free competition as an important driving force. The government declaration states that it will work for the greatest possible freedom of establishment in the media industry. At the same time, it is said that the monitoring of competition within the industry will be left to the Norwegian Competition Authority – which will thus have a freer and more independent position vis-à-vis the administration.
The free competition will also affect other service areas. The government declaration states that it will expand the use of competitive tendering in the public sector and equate the purchase of services from private companies with public in-house production of services. Exposure to competition will also be one of the measures to free up labor, and the population will be given "greater opportunity to choose who will perform services that the public sector pays for".
Not least in the area of transport, the Government will allow private individuals through tender competitions. The government will have "consistent use of tenders when the public sector buys goods and services in the transport sector, whether it concerns infrastructure or transport services." They will also have full competitive exposure of Veivesenet's, Jernbaneverket's and Kystverket's production departments.
