Table of Contents

State-Initiated Restraints of Competition

State-Initiated Restraints of Competition

ASCOLA Competition Law series

Edited by Josef Drexl and Vicente Bagnoli

States influence competition in the market in various ways. They often act themselves as market participants through state-owned enterprises. They regulate markets and specific sectors of the economy such as public utilities in particular. In some instances, market regulation explicitly aims to promote competition in the market. In other instances, regulatory schemes and decisions may inadvertently distort competition or openly promote conflicting objectives and even anti-competitive goals. Furthermore, states can distort competition among firms when they act as purchasers of goods and services as well as when they grant subsidies to individual firms. This book assembles contributions by competition law scholars who present new insights on the diversity of problems and challenges arising from state-initiated restraints of competition in jurisdictions from all around the world, not only including the EU and the US, but also Latin American countries, China, India and Australia.

Chapter 7: The competition policy dimension of the regulation of water and sanitation services in Brazil

Gesner Oliveira

Subjects: law - academic, competition and antitrust law


The objective of this chapter is to discuss the competition policy dimension of the water and sanitation services in Brazil. It presents the basic sanitation situation in Brazil, with an emphasis on the sector’s regulation. It estimates the timeline of the universalization of water supply and sanitation in Brazil, explaining the need to increase investment and productivity. It is argued that good regulation could stimulate competition within the sector. This article indicates that the elimination of the enormous infrastructure bottlenecks in the emerging countries depends on a pro-competition regulation and not on the elimination of competition under the pretext of the existence of a natural monopoly. Regulation is essential in the water and sanitation sector due to the natural monopoly characteristics, high unrecoverable costs (sunk costs) and positive externalities on health and the natural environment, among other factors. This does not mean however that there is no competition in the sector. The presence of a pro-competitive regulation is paramount for the quality of the services supplied. This study is organized in six sections. Besides this introduction, Section 2 presents the basic sanitation situation in Brazil. Section 3 contains an estimation of the investment needs for different universalization goals. Section 4 touches upon sanitation regulation aspects in Brazil. Section 5 contextualizes sanitation service regulation, highlighting the competitive dimension that exists in this sector. A final section contains the major conclusions.

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