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competitive advantage
fighting monopolies, you may be certain, is nothing
new for mona yassine, whose appointment as head of the newly formed
egyptian competition authority puts her in the company of a tiny
handful of women at the helm of official government bodies. a 28-year
veteran of the egyptian banking sector, she knew that even after
chipping through the glass ceiling she would have her work cut out
for her. yassine’s new assignment includes creating the structure
of the authority and properly implementing the spirit of egypt’s
new antitrust law, all in a climate of widespread wariness surrounding
the law and the regulatory body it created.
by rehab el-bakry
by her own admission, mona yassine’s appointment as head of
the newly formed egyptian competition authority was an unexpected
opportunity. an economics graduate from the american university
in cairo, she recalls the frustration of her first job at the export
unit of a public sector textile company. “my job was to help
develop the exports,” she says. “but we were only allowed
to import components from eastern europe and export to eastern europe.
i found that my job was simply to push papers, so i decided to quit
a week after i got hired.” yassine says it’s ironic that
three decades later, not only is she working for the government
but heading up an authority. “i believe i have come full circle.
but at least this time around i will be able to make a difference
and ensure that none of my team decides to resign a week after they
join,” she says with a chuckle.
after her short-lived fling with the public sector, yassine got
married and traveled with her husband throughout the middle east
and europe before finding a career in banking. she joined citibank
in 1977 and scaled the corporate ladder over a 26-year tenure with
the multinational bank, eventually becoming senior country risk
manager. later, she joined banque du caire as vice chairwoman, a
position she held until her appointment as chairwoman of the competition
authority in august 2005.
her extensive experience in the banking sector gives her a strong
understanding of the changes that the egyptian economy has undergone
over the past 30 years. she points out that egyptian economic policy
could be summarized in the idea of one step forward, two steps back.
“in 1977, egypt implemented the open door policy. by the early
1980s, there were mistakes that resulted from the policy. instead
of trying to fix the causes of the mistakes, new rules and regulations
were adopted that provided protection to certain sectors, which
contradicts the open door policy. a few years later, it was realized
that these protection policies contradicted what egypt really needed,
which was an open economy. so once again, policies were adopted
that undid the previous set of policies and so on.”
the problem, as yassine sees it, was that every time the policies
were reversed, people who had benefited from the previous policies
lost their edge in the market. “there was an unwillingness
to accept that with changes in economic policies, some people win
and others lose,” she says. “we were unwilling to accept
that. instead, we continued to attempt to adopt policies through
which everyone would win. that’s virtually impossible to do.”
one of the direct outcomes of these amorphous economic policies
was the heavy involvement of the government in economic matters.
yassine says the role of the government is not to interfere in investment
or to give some market players advantages. government should simply
set an environment that will allow business to grow and push the
economy forward, with the role of regulation implementation and
refereeing left up to independent bodies such as the competition
authority. “these are independent government bodies, which
ensures that they will favor no one... these regulatory bodies should
ensure that the market is working properly, that there are no barriers
to entry or competition in the market and that violators are identified
and stopped.”
independent regulatory bodies are a relatively new concept in egypt,
part of the latest attempt at economic liberalization and deregulation.
their existence has come to be seen as a way to instill confidence
in private sector investors while ensuring relative continuity across
the policies of the different sectors. however, yassine insists,
it would have been pointless to have these bodies before egypt embarked
on serious privatization and economic reform.
“at the moment, we are in the process of selling off our public
sector assets,” she says. “if the government controls
60 or 70 percent of the market then they are part of the sector.
in this case, there’s no point to having an impartial regulatory
body. but if you’re going to withdraw from the market, you
will need a competition regulator to facilitate the entry of new
players.”
it took over a decade to draft competition law 3/2005 and pass it
through the people’s assembly. yassine has her own theories
as to why. “i don’t think that the government or the market
was truly ready for a competition law,” she says. “the
government was concerned that having a competition law would hinder
the growth of investments. on the other hand, businesses were worried
that the competition law would amount to nothing more than extra
bureaucracy.” while the law has been passed, many still view
the competition authority that it created with the same degree of
suspicion.
by many accounts, these doubts are well founded. the law places
an inordinate amount of power in the hands of the authority. while
the law sets the definitions of what constitutes monopolistic practice,
unfair competition and market entry barriers, the complaint process,
case investigations and processing of the findings are all left
in the hands of the authority. the body is in charge of developing
all the processes associated with the implementation of the law,
as well as the decision about whether or not to pursue a complaint.
“people are already adopting the wait-and-see philosophy and
we haven’t even finished hiring the staff,” she says.
“the law has set the guidelines for the authority, but it has
also given us a certain degree of freedom in determining the specifics
of the implementation process. while some may see this as too much
freedom, i see it as the degree of flexibility necessary for us
to do our job.”
yassine explains that the key to investigating anti-competitive
behavior is the realization that no two sectors are alike. some
violations could involve price fixing among two or three manufacturers
of a similar product. in other cases, the monopolistic practices
could have a regional focus.
“when it comes to competition, nothing is as it seems,”
she says. “that’s the first lesson i learned. sometimes
it might seem that there are obvious infringements in a certain
sector or market, but when you take a closer look, no laws have
been broken. other times, a certain sector might seem to be working
like clockwork and an investigation will turn up hundreds of violations.
in other situations, we might receive a complaint about a particular
market, such as that of upper egypt, for instance... in a different
case, we might be looking at a particular product’s performance
all over the country. these are all very different cases of infringements.”
rigid regulations, according to yassine, would hamper the authority’s
agility in ensuring a competitive market. “that’s why
the law correctly placed guidelines for us to work within, but allowed
us to set the specifics of the implementation of the spirit of the
law,” she says.
once the authority is ready to begin actively pursuing investigations
in may 2006, yassine says there will be several ways to proceed.
the first will be to act upon a complaint filed either by a member
of the general public or a player in the market. investigations
can also be opened based on the recommendation of a minister or
official who observes an irregularity in a particular sector or
market. the third type of investigation is what the law classifies
as advocacy, where the authority initiates a case to assess the
poor performance of a particular sector in order to identify the
challenges to growth and help address them. “these investigations
could be against several players in a certain market, or a single
player or even the government,” says yassine.
certain products and services, however, will not be subject to the
law. for now at least. “the competition law allows for the
government to exempt certain products and services that it classifies
as strategic from the competition regulations for two years. we
have the ability to recommend that the government remove certain
services from the exemption list if we can illustrate that it will
help boost the performance of the economy,” she explains.
so, how many cases will the authority receive once it commences
operation? difficult to predict, yassine admits. should they be
overwhelmed with complaints, however, they will have to prioritize.
“the law states that... a company has to have at least 25-percent
control over the market to be investigated. in other cases, the
priority will be with those violations that will have the biggest
economic impact on the market,” she says. “that’s
why we have to be efficient and hire case investigators who come
from a variety of business backgrounds because their familiarity
with the sectors will help improve proficiency of the investigations
and will give us insight into the particular market or sector.”
once an investigation starts, the alleged violator will be allowed
the chance to illustrate that no violation took place. as a rule,
none of the companies, sectors or markets under investigation will
be named publicly before the investigation is completed and the
findings approved by the board of directors. only then can the names
of the violators, if any, be made public.
the violator will be given a certain period of time after the offense
is established during which to correct the violation. if they accept
the findings of the authority and the prime minister approves the
recommended reparations, then no harm is done. however, if the violator
refuses then the authority forwards the entire case to the courts,
which could dial up the pressure. “we will have to present
a solid case in order to ensure that the situation is remedied.”
if cases go to court, it could create additional problems, admits
yassine. “once the case is in the judicial system, it takes
a long time for a final ruling to be issued. during this time, the
violation will continue. moreover, money devaluates with time. so
in fact, someone is losing a lot more than just time. she is also
concerned that the legal system is not fully equipped to make rulings
on economics-based legal violations. as such, the authority is currently
lobbying to have specially trained judges in each judicial district
to preside over cases brought forward by the team.
while yassine realizes that the law is less than a year old, she
hopes that once the authority proves its credibility and fairness
in the market, provisions will be put in place to allow more expedient
resolution of cases. “in britain, the authority investigates
the cases and actually has the legal authority to force the violators
to comply with the law,” she says. “but it took almost
50 years for them to get that far. i hope it doesn’t take quite
so long, but that should help us keep our expectations in check.”
although demands are building for yassine and her team to begin
accepting complaints sooner rather than later, she says she’s
unwilling to budge. her team will begin providing services to the
public only once they have completed the necessary training and
all the pieces are in place. “i don’t want to be rushed
into starting work before we are ready and then have to make excuses
as to why we can’t process this complaint or that,” she
says. “the process is taking a bit longer than i hoped, but
i believe that one of the keys to building our credibility is not
responding to pressure and never having to make excuses.”
as if the challenges of the job weren’t enough, yassine also
sees this as an opportunity to prove that women are fully capable
of heading up government bodies. “i would like to see more
women being given the opportunity to head up authorities and government
bodies, and not just to fill a quota,” she says. “i do
believe that when you have more than 50 percent of the work force
of almost every sector made up of women, but then only a handful
at the top executive level, there is something seriously wrong.
it will only change if more women are given the opportunity to prove
that they are just as capable.”
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