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Transcript of COMPETITION ACT 2010 MINISTRY OF DOMESTIC TRADE CO-OPERATIVES & CONSUMERISM Seminar on Competition...
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COMPETITION ACT 2010COMPETITION ACT 2010
MINISTRY OF DOMESTIC MINISTRY OF DOMESTIC TRADE CO-OPERATIVES & TRADE CO-OPERATIVES &
CONSUMERISMCONSUMERISM
Seminar on Competition Law 2010
30 September 2010
PICC, Putrajaya
SHILA DORAI RAJ
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• BACKGROUND
• THE COMPETITION ACT 2010
• INSTITUTIONAL ARRANGEMENTS
• THE WAY FORWARD
OVERVIEW OF OVERVIEW OF PRESENTATIONPRESENTATION
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PART IPART I
HISTORICAL HISTORICAL BACKGROUNDBACKGROUND
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MANDATEMANDATE
Mandate of Mandate of competitiocompetition policy & n policy &
lawlaw- Eighth Eighth Malaysia Malaysia
Plan (2001 Plan (2001 -2005)-2005)
- Ninth - Ninth Malaysia Malaysia
Plan (2006 Plan (2006 -2010)-2010)
Prevent firms from protecting
and expanding other than efficiency means
Prevent anti competitive practices –
collusion/cartel activities and
abuse of market power
• Fair Trade Practices Policy
• Competition Act
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CLEAR MESSAGESCLEAR MESSAGES
Dato’ Seri Najib Tun Razak
•RMK10
•New Economic Model
•Strategic Reform Initiatives (SRIs)
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CLEAR MESSAGESCLEAR MESSAGES 10th Malaysia Plan10th Malaysia Plan
““ Healthy competition is needed to make the economy more efficient and dynamic. Healthy competition is needed to make the economy more efficient and dynamic. For this, the Competition Law will be introduced to provide a regulatory framework For this, the Competition Law will be introduced to provide a regulatory framework against market manipulation and cartel practices that may affect market efficiency," against market manipulation and cartel practices that may affect market efficiency,"
New Economic ModelNew Economic Model
““the new approachthe new approach is private sector led growth – to promote competition across and is private sector led growth – to promote competition across and within sectors to revive private investment and market dynamism.”within sectors to revive private investment and market dynamism.”
““Government Government will not seek to use its regulatory powers to protect GLCs from will not seek to use its regulatory powers to protect GLCs from competitioncompetition by the private sector. Instead it will encourage competition from all by the private sector. Instead it will encourage competition from all quarters, secure in its belief that competition will only encourage firms in both the quarters, secure in its belief that competition will only encourage firms in both the public and private sectors to improve their efficiency and provide new value added public and private sectors to improve their efficiency and provide new value added services”services”
NEM’s 8 Strategies – one of which – “ creating a competitive domestic economy ”NEM’s 8 Strategies – one of which – “ creating a competitive domestic economy ”
What does this all mean? What does this all mean?
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PART IIPART II
THE PROHIBITIONSTHE PROHIBITIONS
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• TO PROMOTE ECONOMIC GROWTH
• PROMOTE AND PROTECT THE PROCESS OF COMPETITION
• PROTECT THE INTEREST OF CONSUMERS.
OOBJECTIVEBJECTIVE
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• APPLIES TO ALL COMMERCIAL ACTIVITY - Govt companies
- Public Authorities
• EXTRA TERRITORIAL APPLICATION
SSCOPE COPE
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PROHIBITIONS
ANTI-COMPETITIVE PRACTICES
ABUSE OF DOMINANT POSITION
ANTI – COMPETITIVE AGREEMENTS
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ANTI – COMPETIVE AGREEMENTS
OBJECT EFFECT
FIRST PROHIBITION
•Horizontal or vertical agreements•Between Enterprises
•Significantly preventing, restricting or distorting competition
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Agreement between rival parties Agreement between rival parties in the in the same market selling same same market selling same productsproducts (anti-competitive (anti-competitive conduct between competitors)conduct between competitors)
e.g. fixing prices or other e.g. fixing prices or other trading trading conditions, conditions, allocate markets, allocate markets, market allocation, bid rigging.market allocation, bid rigging.
Horizontal agreementsHorizontal agreements
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Vertical agreementsVertical agreements
Agreement Agreement between two firms between two firms that are at different levelsthat are at different levels of of production-supply chain. production-supply chain. Example:- Example:-
Agreement between Agreement between Manufacturer and Wholesaler Manufacturer and Wholesaler and Retailer and Retailer
distributorship agreementsdistributorship agreements
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What constitutes an What constitutes an agreement?agreement?
contracts, understanding, contracts, understanding, whether whether or not legally enforceableor not legally enforceable
““concerted practices” concerted practices” Decision of associationsDecision of associations
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EXEMPTIONSEXEMPTIONS
IndividualIndividual
BlockBlock
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CRITERIA FOR CRITERIA FOR EXEMPTION (FOR FIRST EXEMPTION (FOR FIRST
PROHIBITION)PROHIBITION)- - significant identifiable significant identifiable
technological,technological, efficiency or social efficiency or social benefitsbenefits
- - BenefitsBenefits could not have been could not have been provided provided without anti-without anti-competitive effects competitive effects
- detrimental effect - detrimental effect proportionate proportionate to to benefits provided benefits provided
- agreement - agreement does not eliminate does not eliminate
competition completely competition completely
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ABUSE OF DOMINANT POSITION
SECOND PROHIBITION
Factors indicating dominance: • large market share• barriers to entry • countervailing buyer power
Factors indicating dominance: • large market share• barriers to entry • countervailing buyer power
Not an offence to be dominant
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Practices indicating ADPPractices indicating ADP
Includes:
Excessive purchase or selling price
Refusal to deal Predatory Pricing Limit or control market access Tying and bundling
PRACTICES INDICATING ADP
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EXEMPTIONS FOR EXEMPTIONS FOR SECOND PROHIBITIONSECOND PROHIBITION
Reasonable commercial justificationReasonable commercial justification
Reasonable commercial response to Reasonable commercial response to conduct of competitorconduct of competitor
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EXCLUSIONSEXCLUSIONS Sector under Communication and
Multimedia Act 1998 Sector under Energy Commission Act
2001
Agreement Fulfilling Legal Requirement Collective Bargaining Agreements Services of General Economic Interest
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PART IIIPART III
INSTITUTIONAL INSTITUTIONAL ARRANGEMENTSARRANGEMENTS
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Competition CommissionCompetition Commission
Competition Appeal TribunalCompetition Appeal Tribunal
Special Committee On CompetitionSpecial Committee On Competition
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POWERS OF THE POWERS OF THE COMMISSIONCOMMISSION
Investigation into suspected prohibitionsInvestigation into suspected prohibitions Issue guidelines, directions, interim Issue guidelines, directions, interim measuresmeasures Grant exemptions – Block & IndividualGrant exemptions – Block & Individual Conduct hearingsConduct hearings Impose financial penalties Impose financial penalties Conduct market reviewConduct market review
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MEMBERSHIP OF THE COMMISSION
Appointed by the Prime Minister upon recommendation by the Minister
8 to 10 members, including the Chairman, from public and private
sectors.
Term not exceeding 3 years
Eligible for reappointment(maximum 2 consecutive terms)
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President andPresident and
7 to 20 Members7 to 20 Members
Term not exceeding 6 years.Term not exceeding 6 years.
MEMBERSHIP OF THE COMPETITION APPEAL TRIBUNAL
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MEMBERSHIP OF THE SPECIAL COMMITTEE ON COMPETITION
Will consist of representatives from sector Will consist of representatives from sector
regulatorsregulators
- Competition Commission (chair)- Competition Commission (chair)- Energy Commission- Energy Commission- Multimedia and Communication - Multimedia and Communication CommissionCommission- Securities Commission- Securities Commission- Bank NegaraBank Negara - Others Others
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PART IVPART IV
THE WAY FORWARDTHE WAY FORWARD
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Six Pest Control Companies Six Pest Control Companies fined total fined total of of S$262,759.66S$262,759.66 by CCS for by CCS for bid rigging bid rigging and and collusive tenderingcollusive tendering arrangements. arrangements.
Rice Noodle companies Rice Noodle companies fined by fined by China’s competition law enforcer between China’s competition law enforcer between S$6,000 –S$20,000 S$6,000 –S$20,000 for for price cartelprice cartel. .
16 coach operators and their trade 16 coach operators and their trade associationassociation fined fined S$1.69mS$1.69m for for price price fixing fixing of Malaysia-Singapore coach tickets.of Malaysia-Singapore coach tickets.
Napp Pharm Holdings Napp Pharm Holdings fined fined £3.2m £3.2m for for predatory discounting predatory discounting of drugs to govt of drugs to govt hospitals.hospitals.
CASES
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CASES IN MALAYSIA?
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Ministry of Domestic Trade, Co-operatives & ConsumerismMinistry of Domestic Trade, Co-operatives & ConsumerismPlease contact us for further details at:Please contact us for further details at:03-88826206 - Mdm. Shila Dorai Raj 03-88826206 - Mdm. Shila Dorai Raj