CPI TV Exclusive With HCC President Ioannis Lianos

Below, we have provided the full transcript of the interview with Ioannis Lianos, president of the Hellenic Competition Commission (HCC), recorded on July 22, 2021.

This is part of a series of videos that CPI is producing where we will interview the heads of various NCAs all around the world.

Thank you, President Lianos, for sharing your time for this interview with CPI.

A video of the complete interview is available HERE.

Elisa RAMUNDO:

Hi, everyone, and thank you for tuning in for one of our exclusive talks with the heads of competition authorities from around the world. Today we have the pleasure to have with us Mr. Ioannis Lianos, professor of Global Competition Law and Public Policy at UCL and since 2019, president of the Hellenic Competition Commission. Good morning, Professor Lianos, and thank you for accepting our invitation and being with us today.

Ioannis LIANOS:

Good morning, Elisa. Very nice to meet you again.

RAMUNDO:

Thank you. I’d like to kick off by asking how the Hellenic Competition Commission has dealt with the pandemic crisis, and are there any learning experiences that you would like to share with us today?

LIANOS:

Well, thank you very much. Definitely, the pandemic has been a quite important challenge. Actually, it came almost six months after I took office, so I only had, during my time as president of the authority, six months of normality. I would say even a little bit less than that. Most of the time, we had to deal with a situation in crisis, obviously, the pandemic. So, the first important issue that we had to consider was to maintain the functioning of the competition authority during this difficult period.

The competition authority of Greece, unfortunately at the time I joined, did not really have IT capabilities. We had to very quickly make the necessary investments to ensure that we could move to teleworking. I think we managed to do that very quickly, and we have been among the first authorities, public authorities in Greece, to put in place teleworking for almost all of our staff. That also included the meetings of the board of the Hellenic Competition Commission, and obviously we had to put in place the necessary changes in our legislation and internal regulations so as to be able to have these meetings of the board, in particular for merger cases, but also for antitrust cases, through teleconferencing.

Also, we had to deal as main authorities with the situation of the market which was drastically changing with this supply and demand shock occurring. So, we had to devise mechanisms to somehow limit the competition law problems that this could have. We have been, I think, the first authority that issued a recommendation with regards to maximum resale price maintenance, basically somehow inspiring the rest of the ICN and the other commissions to issue a joint statement that mentioned this as a possibility.

We also created a website; a specific website on our authority’s website that provided information to companies and citizens about the different competition law issues that emerged. It was sort of a list of all the various initiatives that competition authorities around the world were taking to deal with the crisis, as well as what companies around the world were doing to deal with the crisis. We actually put in place a help desk in order to provide information to anyone who wanted to see if they could cooperate, if the specific type of actions that we were envisioning were compatible with competition law.

And to a certain extent, this event, the pandemic, provided us with the opportunity to somehow move to a more digital HCC, Hellenic Competition Commission. We started and we put in place a system of digital services for consumers and citizens, so they could place a complaint through electronic means or follow a little bit the way their complaints and their different cases were dealt with by the authority. We created a platform, an in house platform – the HCC economic intelligence and data analytics platform – that is actually a quite unique system which collects and harvests information from all major supermarkets about the thousands of products every day, as well as other types of data that is available publicly.

For instance, the data from the local markets in terms of fresh products, data coming out of the e-fuels database, which includes the price of fuels across the country. So all this data is now collected to the central platform of the Hellenic Competition Commission, and this platform actually will have various dashboards that enable us to very quickly analyze this data and see market tendencies. Also, we placed, in cooperation with a number of economists, screening tools in order to help us identify situations where we might need to have more information from the specific companies and where are somehow red flags about possible anti-competitive behavior.

This system has been put in place for a few months, and it operates right now very well. It provides us with a very good understanding of the market tendencies, and we are expanding the system to also include public procurements so as to be able to do a sort of a bid rigging type of cartel screening, as well as adding new products to take advantage of our interactions with price comparison websites, et cetera. You can harvest more information that could provide this platform to help make this platform much more effective for us.

This also gave us the opportunity to put in place a whistleblower system which is also through our platform, and we have seen quite considerable advantages to this system. The leniency policy in Greece hasn’t really functioned very well, although it has been there for some time. Because the market is pretty small, everyone knows everyone so it’s pretty difficult in this context for a leniency policy to work. The fact that we had the pandemic and the fact that we have been thinking more digitally enabled us to put in place this anonymous whistleblower information platform, and that has been in place for a few months now.

That has led us to some interesting cases that could open through information that was actually provided to us through this whistleblower platform. So, in a way, the crisis has been a major challenge for us, but also an opportunity to change. I think it created a culture of change with the staff at the authority, so some things that would have required more time for people to get acquainted to and organize had to be done very, very quickly. And we can now reap the benefits of this digitalization as our processes have been streamlined.

There’s more transparency in the way the authority works, and we have a good basis to increase this reliance on digital means, in particular, in the context of the IT forensic type of work that authorities need to develop a bit further.

So with regards to that, I have to say that we put in place a new unit: an IT forensic unit. We are now proceeding to the recruitment of a Chief Technology Officer and a team of data scientists that will help us use artificial intelligence tools, deep learning, and machine learning in our cases, and we have also procured software that we use.

It’s a quite advance software that we use to augment the capacity of our staff to analyze big data, and quite important sources of information we collect in downgrades, for instance. Let me also add that the Greek authority has been one of the few that proceeded to downgrade during the periods of the crisis. Also, I mean, the last couple of months we have proceeded with a number of downgrades, and I think that’s very important. I mean, always respecting having specific protocols and respecting actually the public health requirements that are needed for protection for both of our staff, but also of a company’s staff that we are investigating.

I think this was extremely important for us to continue to pursue, because it’s very important to keep a little bit of the deterrent effects of a competition authority during the period of crisis. It was part of the strategy that we developed for whenever we had a window of opportunity because we’re not in lockdown. For instance, we already have organized a down rate that could help us progress an investigation, and also provide a message to the market that we’re still here and we’re taking our role very seriously. These were a summary of some of the challenges and opportunities that we had to deal with during the time of the pandemic and we’re still dealing with them actually.

RAMUNDO:

I like the combination of combining the word challenges together with opportunities, and it’s very obvious that your competition commission managed to carry it out and tackle the pandemic crisis, and somehow take it as an opportunity to grow and improve. You mentioned several things: downgrades and whistleblowers rules. Is there any particular achievement, a key achievement, that you would like to mention in particular?

LIANOS:

I will say one of the major achievements we had, that is very important, is that when I joined the authority, we had actually quite a lot of old cases that were not really in the process of being done for many, many year. Actually, the average age of cases when I joined was around eight years, so we had cases also that had been at the authority for almost 20 years. There was a huge backlog of cases, and of course as you can imagine, this was a major problem for me to deal with because you cannot plan anything unless you basically finish all the backlog.

Very quickly, we put in place a new organization with a specific task force or staff that we somehow abandon everything else and focused on dealing with this backlog of cases. Now, the average age of our case is less than two years, so we managed to go from eight years to two years in basically 12 months. We finished more than 130 cases, some of which actually moved to a second stage and were investigated after by the board. They were put forward by the director general to the board.

I think we managed very quickly in a year to become relevant again in terms of the timeliness of our enforcement, and I’m very happy that this year. We started and we’re in the process of finalizing in terms of settlements or possible remedies and not fines. Obviously, this will be decided by the board, in cases that started basically a few months ago. This is really, I think, an achievement we’re only able to have because of the work that has been done by the staff of the authority; the huge work that the staff of the authority with an important commitment to finalize old cases.

But, of course, there are not just old cases, but also new ones. I think we started a strategy of enforcing competition much more systematically and with a specific priority program. The authority, since 2020, every year there’s a discussion based on information about the economics of the various sectors and the priorities of the authority, so we immediately prioritize some sectors of the economy and act by bringing cases.

We had a very important investigation that started with regards to banks. Almost a couple of months after I joined, we did the biggest downgrade ever of the authority to all the systemic banks. This investigation is still in process, so we are continuing, and obviously it will be finalized, I hope, soon. We invested hugely in staff as well as IT and software, specific software, to enable us to assess all the data that we’re collecting in the context of that investigation.

We also finalized a sector inquiry for supermarkets. This sector inquiry started many years ago, I think it was in 2012. In 2019, we arrived and it wasn’t complete and actually not much had been done.

We moved very quickly to finalize this sector inquiry by structure, and also by the model of sector inquiries. A little bit like in the UK, we have the market investigation reference, by having an interim report and having a process of public consultation. This is very important for the authority to interact and to get this public consultation, and the final report was published and also included some proposals and remedies.

We then started a sector inquiry on e-commerce, and the interim report will be out actually next week. This is the first time that the e-commerce, or just digital commerce, was investigated by the competition authority, and the first time there’s been such a quite broad analysis of e-commerce, particular for products, by a public authority in Greece.

We also started to regulatory interventions, one in the context of the press distribution monopoly that we have, which raises quite interesting issues of obviously polycentric competition law. And secondly, in the context of the construction industry, which are to my knowledge, the first sector investigations which the market investigation references, rely a lot on the common ownership issue, and that deal with the common ownership issue.

In that context, we also organized a conference on common ownership in cooperation with a journal in the competition law and economics. We adopted, most recently, a fine of 1.1 million euro for an abuse of dominance case in the gas appliances market. We have already dealt with some interesting practices, probably the first time these practices have been dealt with, by the company Diageo in the market for drinks and the consumption of drinks in bars and in restaurants et cetera.

We also commissioned a report in the context of our e-commerce market investigation. Preliminarily, it was in our investigation, a report on the situation of mobile data prices in Greece. It was the first time an authority had commissioned a report about this issue, because obviously there are problems in this market. Greece has quite high prices compared to other European countries, or also other OECD countries.

Most recently, we started a market investigation reference inquiry in the context of the healthcare sector and health insurance. Part of that inquiry is to analyze the changes that occur in this industry. Of course, there are local aspects in terms of concentration, but there are also very interestingly technological aspects. For instance, the use of data. The fact that we see now insurance and healthcare becoming part of the same value chain through this use of data and the development of personalized medicine. Aspects which, to my knowledge, haven’t been investigated by another competition authority so far. We would like to somehow to develop this in the next few months in the context of a major structural change that we are seeing is happening in the Greek market.

Finally, I can announce that the authority will initiate another sector inquiry; a market investigation reference that has been decided by the board and it will be out next week. It is on waste management and recycling. We think this forms part of our major initiative on sustainable development and competition law. This has been a major issue that we have been investigating in cooperation also with other competition authorities like the Dutch competition authority. We published a discussion paper in September 2020, we organized a major international conference on this topic with participation of high officials from the European Commission and other national competition authorities. We commissioned, with the Dutch competition authority, a joint technical report to environmental economists and IO economists, so the first time that these two groups have been put together to think about the way sustainable development might be degraded, competition analysis, and the metrics that we can actually use.

Finally, most recently published a few days ago, the Sandbox Proposal for sustainable development that the Hellenic Competition Commission has put in place. This is a proposal that changes the way we conceive the role of competition authorities. We think that in the context of our advocacy efforts, in particular in small markets like Greece where we have a number of small and medium firms that face considerable problems to somehow get funding from banks, the banking system, or out of the investors for their green position.

We think it’s very important to use any possible way to reduce the legal uncertainty that these may have in the context of engaging in a corporate initiative that might face problems from a competition perspective. So we think it’s very important for a competition authorities to clarify the situation, and to accompany somehow these companies, in particular where they develop some innovative model, or project. We also think it’s very important for the competition authority markets where we have established our new platforms not to arrive after the fact where the market has tipped and actually, we cannot really do much, but before the fact so that we can avoid problems that might emerge in the future.

To a certain extent, by helping companies see the possible competition problems that might emerge, and providing them more clarity about our way of thinking, we help them design the project in a way that could be compatible with competition law, but obviously promote sustainable development because it’s obviously something we very much care about. I think these are some of the highlights of our enforcement and more generally actions in the last 21 months. Of course, there are many other things, but for lack of time, I just focused on what I consider as the most essential conclusions.

RAMUNDO:

I mean, it seems a 24/7 work, I mean-

LIANOS:

It has been very tough. Yes, a lot of work.

RAMUNDO:

I can see, and I might say congratulations. I’m pretty sure some agencies around the world would like to know the secrets, how you manage to speed up the process of so many activities.

LIANOS:

It’s not an individual work, it’s a joint work. I think the staff here were fantastic. They were very committed during the pandemic to the authority. Even if they have suffered because of the economic crisis and quite considerable pay cuts in the last two years, despite that fact, they have been very active. And actually, we have been also very lucky to cooperate with a number of experts, economists, lawyers, and technology experts from major universities in Greece, but also from abroad that believed in our efforts and helped us with very minimal cost compared to what we would pay in the market there.

They have been a little altruist in their way of helping us to develop these different projects, but I think, for us, it was very important to change the institutional structure of the authority. This is something I haven’t mentioned. We changed completely the institutional structure of the authority, we moved from a system where we had the separation of lawyers and economists in different directories, to a mixed directory system where we have directories on the basis of sectors of the economy. Mixed directors where there’s a lot of interaction and interdisciplinarity, we want really to focus on that. We put in place a very advanced program for training staff in data science, econometrics, and we brought very wonderful colleagues from the universities. Mostly recently, we had Richard Whish, we had Pablo Ibanez Colomo, and we had Alexandre de Streel who came actually and provided us with training, as well as Greek colleagues. And also, we have been at the same time working on a change of our legislation.

We submitted a new bill. The law proposal which has principally the objective first to transpose directive 2019/1 the ECN directive, but we took this as an opportunity to change more broadly competition in Greece. This is a bill that I hope the government will put to parliament. We have to see when this will be published, but in this bill we have some major changes; quite innovative ones. The first one concerns a new provision on abuse of ecosystem power, and this is really a major future innovation for this bill, as well as among other things. The possibility to adopt no action enforcement letters for the authority in case there are some important public interest objectives that require the authority to somehow clarify the position that they have upfront, and also in order to promote sustainable development. It’s part of our effort to somehow develop more the right incentives for great firms to make this green transition as soon as possible. These are some of the changes that were part of this new law, and we hope that we’ll see that passing in parliament very soon.

RAMUNDO:

Among the changes, you mentioned just at the very beginning of this talk how the Hellenic Competition Commission had to become more technological equipped in a way. This brings me to the following question about the technology sector. This has been obviously a big player throughout the pandemic. What do you think about the challenges posed by the technology sector, and do you think there is a need for reforms?

LIANOS:

This is obviously one of the most important topics of our time, and I will say the competition authority is at the forefront of this debate. The emergence of major digital platforms raises a number of social costs, not only in the context of market regulation, but also more generally. I think this is a very complex problem, and that we need many areas of law and many authorities to somehow overcome differences and disciplinary differences and to somehow design a system, a regulatory system.

The major issue comes out of the fact that for many years, and for probably good reasons at the beginning, there wasn’t any regulatory oversight. So this market has developed, these firms developed without really any regulator coming in. The property rights were not defined. For instance, data; there’s no property rights of data. So who possesses data has the data, and obviously, that led to the development of important network effects, and learning effects, and the difficult markets.

Obviously, this is a major issue. Now, this is a global issue, and of course, this needs to be tackled globally. We see different jurisdictions emerging. Larger jurisdictions sometimes taking different approaches. Probably we will see some consensus, hopefully. In the US, obviously at the beginning and until very recently, there was a more, let’s say wait and see approach. In Europe, I think, the European Commission DIGICOM has taken the lead, and wrote a number of cases.

These, I think, were very successful, and obviously we’ll see what happens in the court at the end, but I think they showed that competition may deal some of the problems. There was also the consideration that sometimes we appear to act until very late, and then the markets have already tipped and there’s not much to be done. One of the reasons for that was that the unit of analysis that we base ourselves on the existence of a relevant market and we have a dominant position in center of a market do not represent really the way competition works in the digital era.

I think there are two major differences here. The first one is that companies do not only compete on product markets, but actually they want constitute ecosystems to orchestrate actually these ecosystems, and through the orchestration of ecosystems, manage to look in both competitors like other businesses, as well as consumers. That provides them a significant competitive advantage to other companies. The second element is financialization. It is the importance that financial markets have now on somehow evaluating the assets.

I think a major way of creating value and capturing value is not the classic way of profits in the product market where you see some or you sell more then you have market power in the product. You’re selling more, covering your costs and having profit, high profit margin, but now there’s also a second way to increase your rents, which is to evaluate reevaluate your assets and this evaluation happens to the financial markets.

The fact of occupying a bottleneck, or being a gatekeeper is something that is very much appreciated by financial markets, that immediately somehow raise your evaluation, market valuation and that obviously is something that provides a lot of wealth. Okay? This is something that the traditional antitrust doesn’t take into account, and of course we have some procedural aspects that lead to occasionally delays in taking decisions.

All this has led some authorities think that the antitrust should be completed by, complemented by, supplemented by regulation. That’s why we have the DMA and additional market cycles, just it’s just sort of a cyclic definition. I think these are very useful tools, and there’s a lot of work to be done still in terms of designing them well, and in particular, have in mind this important interaction that there should exist between regulations with the DMA for instance, and competition law enforcement.

We also need to experiment more, and to develop some spaces of experimentation for member States in the context of antitrust. I think this is definitely something that is compatible with the system of regulation 1/2003. I think we are somehow in a federal setting. Obviously, experimenting is a major advantage of a federal setting so we need to take advantage of that. And I think in terms of national competition authorities, many national laws have tried to experiment, either by using old theories and trying to transpose them in the context of the digital economy.

And I’m thinking here about abuse of economic dependence that has been used in investigations by the French Competition Authority for instance in Apple, or in Belgium for instance with the new legislation that brings back a little bit this concept. In Germany, Article 19(a) which responds to the need to develop a unit of analysis like ecosystems that is absent. And more recently, by the new Greek proposal concerning the abuse of ecosystem power that is also trying to tackle this gap that we have in competition enforcement. It’s very important to develop these experiments.

Also outside the EU, I think it’s very interesting to see what the US is going to do in this context. We have very interesting developments in Australia, in particularly with regards to press and the platforms’ direction. We actually have very interesting developments in the Bricks as well, and in my academic capacity before becoming the head of the Hellenic Competition Commission I contributed to the reports for the British competition authorities with regards to that.

I think it’s a time to discuss and develop more experiments, and to somehow also think more carefully about the economic theories and the legal concepts that we need to include and introduce a competition law enforcement in the next few years to deal with these new challenges of the technology and digital platforms.

RAMUNDO:

I really want to know what you think about the DMA, and somehow you explained that already. You also mentioned before some other sectors that the Hellenic Competition Commission is focusing its attention on. Among others, you mentioned constructions, e-commerce, grocery, gas, healthcare, and waste management. Is there any other sector that you think deserves scrutiny that you didn’t mention before?

LIANOS:

Of course there is, but obviously I cannot disclose that. We have a program that we put in place for certain types, and we have different tools, and I think the Greek RICLO is very good with regards to that. We have already a mock investigation tool that we haven’t use for many years. The last time it was used was 2009. We launched two last year, so we have made use of that tool. We issued an opinion as well in the press distribution area, so obviously we prefer to issue opinions, and obviously we have antitrust enforcement as well as merger control.

I think it’s important to make a program of first the problems and then you know the tools that you have to deal with the problems. Some problems can be dealt with in Article 101 or 102, or a national equivalent investigation. Others needs a different type of sector inquiry, or even regulatory intervention. This is something that needs to be done after you’ve done some form of mapping. I think this is also one of the major changes in our new law because it gives competence to the authority to do the market mapping.

We will proceed, and for this reason, we are recruiting a chief economist and team of economists to start the process of mapping the Greek markets in the model of the UK having a state of competition report, to basically develop some indexes that we can use, some criteria we can use in order to see if the market is competitive or not. What is interesting is that we are trying to link this effort of mapping to the market and look into what is the situation in markets with the development of KPIs for the competition authority.

We are the first public authority in Greece that has somehow issued KPIs. We have the obligation to develop KPIs, and these are not developed by us, but actually by an independent commission of experts, members of which are appointed by the European Commission, as well as the governor of the Bank of Greece. We try to have independence to look at our work. On the basis of our performance in these KPIs, we have the possibility at the authority to gain a bonus in terms of extra resources automatically without that being subject to ministerial discretion.

That gives us an incentive also to improve ourselves, and what I’d like to do, and we have done in the process of organizing this, is to connect these KPIs at the authority level with the KPIs we’re going to have at the staff level, and in particular, the bonus system that we would like to put in place. That’s a little bit of the ambition. We have been working with the OECD Gulf with regards to developing a system that might follow the best practices on how both systems can work in the context of the public administration.

But again, that needs a lot of work in terms of pushing for these reforms. Usually, the politicians are quite tough to convince, and we need always to make the case of the importance of competition in markets, the competition law enforcement. These are not always self-explanatory, and I think there’s a lot of work to be done by our community, meaning the academics and the enforcers of competition law, to develop somehow tools and let’s put it like communication strategies. To convince not just the public and the companies, but also the politicians that are investing in competition and promoting competition is something which very important for welfare, both consumer as well as for general welfare and wellbeing.

RAMUNDO:

And I think this summarizes also what you think could be the future direction of antitrust enforcement, both domestically and internationally. Anything else you want to add?

LIANOS:

I mean, with regards to the last issue you mentioned, it’s quite important to think more carefully about the way technology could be integrated in our proceedings, and in particular AI. This is really the most important challenge we will have, and that’s why we have been very supportive and of the development of this new work, and new research on competition law and economics. We actually drafted the report on the basis of what we have done here at the authority in terms of developing the platform and new tools on the basis of AI to help us in our work for the British Competition and Policy Center.

We drafted what was published on our website a few months ago. We also organized a conference, which is available to see on our web page, bringing in a number of scholars that have been doing a lot of work in this area of competition and competition economics. We are now thinking with our partners to develop a hackathon to somehow participate that could provide some form of incentive for programmers that are usually not thinking about competition law to somehow focus on that, and develop the tools that the competition authorities need.

We think that this is quite important in particular in small markets like ours where we don’t have a number of upper-level specialists. I think it’s very important also for jurisdictions that are proven jurisdictions in terms of staff and technical capacity to have these kind of international efforts. We will be suggesting to have it under the context of an international organization that focuses on competition and policy to somehow augment their capacities and being able to develop tools to better somehow monitor their markets.

I think that’s one of the major issues we’ll develop in the future, this competition analysis and economics. And the second is the challenge of sustainable development and competition law. I think this is something that will occupy us for the foreseeable future, and of course, as competition is very marginal, in what it can do to avoid the climate change or to somehow limit the possible risks of environmental degradation, but I think it can contribute to that. I think that’s really something that you should have in mind.

RAMUNDO:

Thank you. And thank you so much for being with us today.

LIANOS:

Thank you very much. It was very nice to meet you again. Bye.