Transcript Lessons from Other Countries

Lessons from Other Countries
Presented by
Dr. Selim Raihan
1
In this session we will discuss…..

Competition policy in different countries.

Some case studies: What are the evidences of
competition policy helping consumers in other
countries?

Lessons that Bangladesh can derive from cross
country experiences
2
Competition Policy in Different Countries






Malaysia
India
Vietnam
South Africa
Chile
Venezuela
3
Competition Policy in Malaysia




No national competition policy law.
Sectoral approach to competition and regulation.
Policies of deregulation and liberalisation of the
economy since the 1980s
Deregulation of trade and investment,
privatisation of power generation, the
distribution sector, telecommunications,
transport and the postal services boosted overall
market competitiveness.
4
Competition Policy in Malaysia (Cont.)



No administrative authority for determining
appropriate business ethics and trade practices.
There are about 30 laws to regulate certain
activities of enterprises and to protect consumer
interests.
Under these laws a consumer or trader may seek
redress through the appropriate Ministry, public
agency or via the Civil Courts.
5
Malaysia (Continued…)
Competition
Policy in Malaysia (cont.)
For details please see

Global Competition Forum Website:
www.globalcompetitionforum.org

Lee, Cassey (2004) : Competition Policy in Malaysia, CRC
Working Paper 68.
6
Competition policy in India

India had a competition law since 1969 by the name
of Monopolies and Restrictive Trade Practices Act.

That law has become redundant for several reasons.
Therefore a new law has been drafted.
7
Competition policy in India (cont.)

India has consumer protection act and corporation working for
securing consumer rights against any anti-competitive practices of
firms.

The Consumer Protection Act is known as COPRA (1986). It
recognizes the followings rights to the consumers:

Safety

Information

Choice

Representation

Redress

Consumer Education
8
Competition policy in India (cont.)
For details, please have a look at:


CUTS Centre For Consumer Action Research And
Training (CART): “Consumer Rights And Its
Expansion Rights And Responsibilities”
CUTS :“Articles on Consumer Policy and Issues”
9
Competition policy in Vietnam

Sector wise policies and regulations.

A competition Law promulgated in 2004
with a competition Authority

The Competition Authority Controls the process of economic
concentration
Investigates unfair competition practices
Sanctions unfair competition practices
1.
2.
3.
10
Competition policy in Vietnam (cont.)
For details:
Comparative Study of Sectoral Regulation in
Developing Countries: Lessons for policy,
Governance and Implementation
-A Case Study of Vietnam.
11
Competition policy in South Africa

The Competition Commission plays a pivotal
role.

The Competition Act (Act. No.89 of 1998) was
passed by Parliament in September 1998.

The enforcement agencies are the Competition
Commission, the Competition Tribunal and the
Competition Appeal Court.
12
Competition policy in South Africa (cont.)
For details:

Global Competition Forum Website:
www.globalcompetitionforum.org

Comparative Study of Sectoral Regulation in Developing
Countries: Lessons for policy, Governance and
Implementation
-A Case Study of South Africa.
13
Competition policy in Latin American Countries

The Chilean system of protection of Competition in
markets is integrated by The Tribunal for the Defence of
Free Competition and The Economic National Prosecutor's
Office. The Decree-Law 211 of 1973 is the legal
framework of this system.

The free competition regime in Venezuela started in 1992
when the government settled a group of new policies in
order to prepare the country to face globalisation process,
including to the Law to Promote and Protect the Exercise
of Free Competition.
14
Case Studies
15
The Indian Case Study

Ghoten Gas Agency, a Kolhapur based gas supplier in India, was forcing
the buyers to buy hot plates at the time of releasing fresh gas connection.

The Competition Authority held such a practice.

The Authority directed that wherever a customer purchased a hot plate
simultaneously with a fresh gas connection, the gas agency should make it
clear on the invoice that the hot plates were purchased voluntarily.

Further a notice board should be prominently displayed in the agency’s
premises that the customers were free to purchase hot plate either from
Ghoten Gas agency or from any other source.
Source: CUTS “Competition Policy and Law Made Easy”
16
The Malaysian Case Study

Prior to 2002, MAS was a monopoly operator in the domestic airline market.

With the entry of AirAsia the domestic airline market became more
competitive.

AirAsia offers no-frills domestic flights at low fares.

MAS responded by offering 50 percent discounts for ten seats in every flight.

AirAsia also responded to MAS’s pricing strategy by offering lower fares.

Despite MAS’s plea for government (Ministry of Transport) intervention to
resolve the perceived ‘price war’, the government has maintained that the
competition between the two firms as healthy competition.
17
The Spanish Case
Casestudy-:South
Study
Africa

Four Sugar producers in Spain were engaged in market allocation agreement
(apart from price fixing, sales quota agreements) that restricted sugar supply
to the level at which maximum monopoly profits could be earned.

As a result. Spanish sugar prices, for many years, were 5 to 9 percent higher
than those in the rest of Europe.

The Spanish Service for the Defence of Competition uncovered the cartel
and slapped 8.7 million euros fine on the four producers.
Source: CUTS “Competition Policy and Law Made Easy”
18
The Kenyan Case
Study
Case
study-: Kenya

South Africa Bottling Company Pty (SABCO) proposed of taking over all the
other bottling companies and consolidating them into one entity.

The Kenyan competition authority decided that such a plan would lead to both
horizontal and vertical concentration of market power and the likely abuse of
dominance, and accordingly stopped the process from going further.

Thus, the Kenyan authority, dealing with a huge global company, applied the
competition law to foreclose likely anticompetitive practices in the market.
See pages 14,15 of UNCTAD, April 2002: Recent Important Competition Cases
in Developing Countries
19
The Argentinean Case Study

Four foreign companies active in Argentina as suppliers of
medical oxygen to public and private hospitals were fined 70.3
million pesos (US$ 24 million) for operating a price cartel for
medical oxygen.
See page 4 of UNCTAD, September,2005 : Recent Important Cases
Involving More Than One Country
20
The Brazilian Case Study

Three chemical or pharmaceutical firms (Roche, BASF and
Aventis Animal Nutrition, the latter formed through the
merger of Rhône-Poulenc and Hoescht) fixed the prices and
allocated market shares of bulk vitamins in Brazil as an
extension of their participation in an international vitamins
cartel which was prosecuted in the United States.
See pages 5,6 of UNCTAD, April 2002: Recent Important
Competition Cases in Developing Countries
21
Lessons for Bangladesh

Competition policy and law and consumer protection policy can take
different forms for different countries.

There are verities of anti-competitive practices and consumer abuses, so
the regulatory authority should be innovative in nature.

For developing countries, resource constraint is one of the major problem
in establishing competition authority.

Consumer welfare should be explicitly mentioned in the legislation. The
role of consumer in CL should also include the right of consumer
organizations to bring complaints to the CA.

It is very important that the reports on anti-competitive practices be
published in the media to raise the awareness of the consumers.
22