Transcript PICTURE TITLE SLIDE WRITTEN IN GEORGIA 46PT CAPS 00 …

The ASEAN Competition
Conference
Session 5: Comparisons of Competition Regimes
in ASEAN
Bali, Indonesia
15-16 November 2011
Lim Chong Kin
Director
Head, Competition & Regulatory Law Practice Group (Corporate)
Head, Telecommunications, Media & Technology Practice Group
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
• Looking back. Take stock of significant developments in
competition policy and law in the last 5 years in ASEAN.
– Informs us about where we stand relative to each other, and
to the rest of the world, and how to improve.
• Looking forward. More countries in ASEAN likely to introduce
competition policy and law in the next 5 years (ASEAN AEC
Blueprint 2015).
– Understand differences and impact on businesses (e.g. may
unwittingly raise business compliance costs with more, and
very different, regimes within ASEAN).
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
GENERAL COMPETITION
LAW/NAME OF
LEGISLATION
COMPETITION
AUTHORITY
BRUNEI
No
No
CAMBODIA
No
No
No
No
No
No
Yes
Law of the Republic of
Indonesia Number 5
year 1999 Concerning
Prohibition of
Monopolistic Practices
and Unfair Business
Competition
Yes
The Commission for the
Supervision of Business
Competition
(“KPPU”)
Yes
Chapters III & IV set out
the prohibited
agreements and
activities
Yes
Chapter IV & Chapter V
set out the prohibitions
on monopolies and
abuse of dominance
respectively
Yes
See Article 28/ Mandatory notification for post
merger (i) asset value above 2.5 trillion Rupiah
and/or (ii) sales value above 5 trillion Rupiah. 20
trillion Rupiah combined asset threshold applies
to the banking sector
No
Separate regulation
under the Law on
Consumer
Protection No.8 of
1999
No
No
MALAYSIA
Yes
Competition Act 2010
(Effective January
2012)
Yes
Competition
Commission of
Malaysia (being set up)
Yes
Section 4 prohibits
anticompetitive
agreements
Yes
Section 10 prohibits
abuse of dominance
No
No
Separate regulation
under the Consumer
Protection Act 1999
MYANMAR
No
No
No
No
No
No
PHILIPPINES
No
No
SINGAPORE
Yes
Competition Act (Cap.
50B)
Yes
Competition
Commission of
Singapore
(“CCS”)
Yes
Section 34 prohibits
anticompetitive
agreements
Yes
Section 47 prohibits
abuse of dominance
Yes
See Section 54/Voluntary notification;
notification encouraged where post merger
combined market share is (i) 40% or more; or
(ii) between 20% – 40% and the combined
market share of 3 largest firms is 70% or more
No
Fair trading and
consumer protection
are regulated by
separate statutes
THAILAND
Yes
Trade Competition Act
B.E. 2542 (A.D. 1999)
Yes
Trade Competition
Commission
Yes
Section 27 prohibits
specific types of
anticompetitive
agreements
Yes
Section 25 prohibits
specific behaviours by
dominant operator
Yes
See Section 26/Mandatory notification once
thresholds met (Thresholds to be released)
Yes
Section 29 prohibits
acts against fair and
free competition
VIET NAM
Yes
Law on Competition
No.27/2004/QH11
Yes
Viet Nam Competition
Council & Competition
Administration
Department
Yes
Section 1 of Chapter II
prohibits specific types
of competition
restriction agreements
Yes
Section 2 of Chapter II
prohibits specific acts
by dominant enterprise
or monopoly
Yes
Article 18 prohibits concentrations that result in a
combined market share of 50%, unless
exempted/ Mandatory notification where
combined market share is 30% – 50%
Yes
Chapter III prohibits
acts of unfair
competition
INDONESIA
LAOS
PROHIBITION ON
RESTRICTIVE
AGREEMENTS
PROHIBITION ON ABUSE
OF DOMINANCE
PROHIBITION ON ANTICOMPETITIVE MERGERS/TYPE
OF NOTIFICATION
PROHIBITION ON
UNFAIR PRACTICES
LENIENCY
PROGRAM
PENALTIES
No
---
No
Administrative directions and fines
from 1 billion to 25 billion Rupiah; and
criminal sanctions including fines of
up to 100 billion Rupiah or a
maximum 6-month jail term in lieu of a
fine
Only Brunei's telecommunications sector is subject to competition regulation.
Decree No.15/PMO on competition was issued in 2004 to promote a fair business environment. The Decree has not been implemented to date. However, there are plans to reform the
Decree and adopt a comprehensive law on competition.
Competition issues in the Philippines are addressed through several different laws that are enforced by the respective sector
regulators.
Yes
Administrative directions and fines up
to 10% of the worldwide turnover of
the enterprise for the period of
infringement
No
---
No
Administrative directions, fines and/or
jail terms under the respective
sectoral legislation
Yes
Administrative directions and fines of
up to 10% of the turnover in
Singapore for each year of
infringement, up to a maximum of 3
years
No
Jail term of up to 3 years and/or fine
of up to 6 million Baht; and double
penalty for repeated offences
No
Administrative measures and/or fines
up to 10% of total turnover of
organisation or individual in the
financial year preceding the year of
infringement
IMPORTANT DISCLAIMER: This document covers a wide range of topics and is not intended to be a comprehensive study of the subjects covered,
nor is it intended to provi d e legal advice. It should not be tr eated as a substitute for legal a dvice o n specific situations.
ASEAN
MEMBER
COUNTRY
3
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
Comparisons across ASEAN
• General lack of consistency in competition laws across ASEAN
• Examples:
1. Differing analytical approach: Form v. Effects based
Form-based approach
Effects-based approach
• More certainty in terms of what
is permitted but more rigid in
application.
• More self-assessment required
(less certainty), but more flexible
(more economics-based).
• Examples: Thailand, Indonesia,
Vietnam
• Examples: Singapore, Malaysia
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
2. Differing competition policies
Competition policy driven by each country’s own economic pursuit
and reflective of political and social conditions.
3. Differences in substantive aspects of law
–
Treatment of vertical agreements
•
–
e.g. excluded under restrictive agreements & practices
(Singapore); included under restrictive agreements & practices
(Malaysia).
Threshold for dominance
•
e.g. Indonesia (between 50-75%); Singapore (60%); Thailand
(combination of market shares & turnover); Vietnam (30-75%).
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
–
What constitutes an abuse of dominance
•
–
Subject to a ‘substantial market power’ test (e.g. Singapore,
Malaysia); list of prohibited conduct (e.g. Vietnam, Thailand,
Indonesia).
Exemption criteria
•
Subject to a ‘net economic benefit’ test (Singapore, Malaysia);
specified conduct (Indonesia); hybrid of both (Vietnam).
3. Differing institutional set-up
–
Role of competition authority and courts
•
e.g. some authorities with dual role as investigator and
adjudicator; other institutional set-ups with responsibilities split
between the authority (investigate) and courts (adjudicate).
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
Challenges faced by foreign investors
• Challenges at two levels:
– at individual country level; and
– at regional level.
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
Country level challenges
What do businesses want?
• Access to markets and freedom from anticompetitive behaviour.
• Generally but cautiously welcome adoption of competition law.
But ALSO double-edged sword!
• Regulatory transparency & certainty (at the country and regional
level).
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
Regional level challenges
???
Reality Check
• With disparate competition law regimes, businesses may
find it harder and more costly to operate in ASEAN.
• 10 member countries = 10 disparate sets of laws?
COMPARISONS OF COMPETITION
REGIMES IN ASEAN
New role of advocacy
• Advocacy (narrow role) = competition authorities reaching out to the
business community.
• Advocacy (wider role) = advocating harmonisation of competition
law.
• No need to reinvent the wheel:
–
Start with what is already available.
–
Member countries looking at introducing competition policy and
law should use best practices (e.g. ASEAN Regional
Guidelines).
MODELS OF HARMONISATION
Towards an ASEAN model?
Not advocating that ASEAN adopts the EU model.
– i.e. supra-national competition regulator, harmonised law.
– But about recognising that despite the challenges, some
harmonisation is possible.
Challenge is to ensure a balance between country-specific
features and broad harmony.
– Short term goals: improve transparency; commonality in merger
procedures; strengthening networks.
– Medium term goal: greater consistency in analytical approach (e.g.
a more economics-based application of the law).
HARMONISATION: THE NEXT STEP
FORWARD
Short term goals
• Improving Transparency and Certainty
–
Take practical steps (e.g. publishing decisions, translating
decisions into English).
–
Issue guidelines (with English translations) to help businesses
understand how law will be applied (e.g. how investigations will
be conducted).
–
Implement consultation process to garner regular feedback
from stakeholders (e.g. seek views before issuing guidelines
and policies).
–
Set up a one-stop portal on all cases, guidelines, news updates
and consultation papers from ASEAN authorities. Good to take
stock of resources available and consolidate to maximise
benefits (e.g. ICN templates, APEC database)
HARMONISATION: THE NEXT STEP
FORWARD
Short term goals
• Harmonising Merger Control
–
Design a common filing form that can be used across ASEAN.
• Can still retain individual filing thresholds, but to the extent
that filing is needed, the same form/information is provided.
–
Sync procedures – will provide business certainty given timesensitive nature of mergers.
• e.g. similar filing timelines; and similar phases of review (a
2-phase process).
HARMONISATION: THE NEXT STEP
FORWARD
Medium term goal
• Working towards some consistency in analytical approach
–
Its been done before!
• e.g. EU has gradually moved towards more a economicbased application of the law, and is now more similar in its
analytical approach to the US than before.
–
Set up a working group to identify key areas for harmonisation.
• Identify and get a consensus on what is practical and
achievable in the short and medium term; and
• Set clear timelines and milestones for implementation.
THANK YOU
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