This presentation by the Norwegian Competition Authority was made during a workshop on “Regulation and competition in light of digitalisation” held by the OECD in Paris on 31 January 2018. More papers and presentations on the topic can be found out at oe.cd/wrcd.
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Regulation and competition in light of digitalisation – Norwegian Competition Authority – January 2018 OECD Workshop
1. Study on sharing economy - Norway
OECD Workshop - Regulation and competition in light of digitalisation
31 January 2018 - Paris
The Norwegian Competition Authority
Sven Heidar Larsen
2. Overview
1. Study on sharing economy
The study, mandate etc.
Official Norwegian report (NOU) 2017:4
2. Regulation(s) in question
3. The approach used in the analysis
4. Should we adopt a different
approach in the digital economy?
3. 1. The Study
• The Committee, mandate etc.
– Appointed by the Norwegian Government in 2016
– Investigate opportunities and challenges concerning the sharing economy.
– Identify and assess regulatory provisions challenged by the sharing economy
– Labour-market consequences
– Consumer protection rules and the objective of consumer safety
• Focus
– new taxi services
– accommodation market
– tax issues
• Final report in February 2017 - Official Norwegian report (NOU)
2017:4
4. 1. The Study - conclusion
• Opportunities – sharing economy
– Boosting competition, innovation and
consumer choice
– Companies can potentially improve
economic efficiency
– Positive environmental effects
5. 1. The Study - conclusion
• Challenges – sharing economy
– Uncertainty about which regulatory provisions apply
and interpretation
– Regulations do not reflect the increased direct trading
between private individuals (i.e. consumer protection)
– Market participants may receive small-scale incomes
(tax rules)
– Non-traditional business models – i.e. private
individuals acting as independent contractors (labour
market regulation)
– Private individuals competition alongside traditional
commercial market participants – competition concerns
6. 2. Regulation(s) – Transport services
(i.e. Uber and Haxi)
• Regulation - the Professional Transport Act
– License to operate
– Needs asessment in respective district
– Requiremets for license holders;
• Duty to operate
• Driving must be primary occupation
• Professionally competent
• Member of an approved taxi dispatch centre
etc.
– Maximum price regulation
7. • Competitive challenges
– Limited number of licences entry barriers
– Maximum price regulation less price
competition
– Asymmetry on price information between
the companies and the consumers.
– Tax law competitive disadvantage to
persons who intend to use a private car for
taxi-like services.
2. Regulation(s) – Transport services
8. 2. Regulation(s) – Transport services
• Proposed changes
– Repeal of the duty
• to hold a licence (taxi services)
• for licence holders to have taxi transportation as their primary
occupation.
• to be a member of a taxi dispatch centre
– Repeal of maximum price regulation
– Introduce rules to ensure that information on services and prices
are registered and stored
– Require that information on prices is made available to the
consumers prior to booking a service
9. 2. Regulation(s) - Accommodation (i.e. Airbnb)
• Regulatory/competitive challenges
– Uncertainty about which rules and
regulations that apply
– Competition on unequal terms
10. 2. Regulation(s) - Accommodation
• Regulatory challenges - tax regulation
• Income from renting out a private house
is taxable - exemptions apply
• Tax-free-limit
– If less than 50 % of a home is rented out, the
rental income is not taxable
– Enables the development of new
accommodation services
– Different competition terms apply (private
individuals /commercial businesses)
11. 2. Regulation(s) - Accommodation
• Proposals from the Committee
– Income from short-term rental of private homes
is made taxable (also in cases where the owner
only rents out parts of their homes.)
• Amendments - tax regulation (January 2018)
– Short term rentals of private homes are made
taxable as capital income (23%), if it exceeds
10.000 NOK (equals to approx. 1000 Euro)
– Simplified tax treatment of small incomes from
accommodation services are introduced
12. 3. The approach used in the analysis
• Analysed sectors where the digital economy was
found to be most prominent
• Principles
– regulation should promote competition by providing
i.e.:
• a level playing field (legal entities/private individuals and
traditional/technology-driven industries)
• technology neutrality
– and should not hamper competition by i.e.;
• limit the number or range of suppliers
• limit the ability of suppliers to compete,
• reduce the incentive of suppliers to compete,
• limit the choices and information available to customers
13. 4. Should we adopt a different approach in the
digital economy?
• Digital platforms - enable or facilitate the exploitation of unutilised
capacity
• Regulatory challenges with sharing activity between private individuals
• Trading between businesses and competition policy aspects
– the current regulatory competition law framework appears able to
deal with the challenges
• Trading between individuals and the regulatory framework
– Traditional analyses with regard to regulation in the digital
economy is still appropriate
14. 4. Should we adopt a different approach in the
digital economy?
• Basic principles - as stated in the OECD toolkit - still useful.
• Regulation should not ;
– impose restriction on entry or the flow of goods and services across regions
– facilitate coordination of prices and production among competitors
– impose higher costs on entrants/ small businesses as opposed to incumbents/ larger
firms
– shelter firms from (national) competition laws
• Some special features - how digital (and traditional) markets should be regulated:
– (Legal) barriers to entry should be avoided (unless strictly necessary)
– Avoid capture (i.e. companies obtaining special favours in the form of taxation and other
regulatory advantages).
– Unnecessary regulations restricting competition should be avoided (i.e. increased access
to information may reduce the need for regulation)
– Neutral with respect to technologies and company types
– Harmonisation of national legislation
• Appropriate to examine how the sharing economy is developing before major measures are
implemented to direct developments