Competition
Law, Part 5
In
Indonesia, there are no laws relating to unfair competition, monopolisation,
or passing off which may affect rights in relation to industrial property
in this country (this was probably due to the Soeharto regime during which
the majority of business was under the control of and owned by the Soeharto
family). Currently, unfair competition is controlled under Art. 1365 of the Civil Code, which provides that a wrongdoer whose conduct injures
other people is obliged to pay compensation, and under article 382 bis
of the Criminal Code:
Art.
382 bis of the criminal Code provides that: "Anyone who deceives
the public or someone else with a purpose to obtain, maintain or add
to his own benefit or that of his or another person’s company, will
be punished because of his unfair competition, with imprisonment for
a maximum 16 months or fine of a maximum nine hundred rupiahs, if
such acts injure his competitors or another competitor who competes
with his competitor".
However, the penalty recorded here is plainly ineffective: a fine of 900
Rupiahs is approximately 0.07 pounds, which really means nothing for a
dominant company, and the imprisonment sentence of 16 months is inappropriate
and unrealistic. Especially, the compensation under Civil Code is not
clearly defined so it can be minimal because the firms that committed
the offence can exercise their powerful influence on the courts concerned.
In
Malaysia, there are no specific laws against unfair trading practices.
There are piecemeal provisions in particular statutes such as The Hire
Purchase Act 1967, The Price Control Act 1946, and The Control
of Supply Act 1961 that provide some limited protection to the consumer
in specific situations or transactions. In particular, Sec. 28 of the
Malaysian Contract Act 1950 renders all covenants in restraint
of trade void. However, there is no criterion for judging whether the
covenants in question are reasonable, or if they are harsh or onerous
or too wide. Apart from the above restriction, there are no controls or
regulations over contracts relating to exclusive dealing, monopolisation,
franchises or resale price maintenance. Where mergers are concerned, there
are various requirements to be complied with in takeover and mergers,
but these relate to the regulation of the shareholdings of a corporation
in Malaysia. Section 179 of the Companies Act 1965 prescribes a
panel on Takeovers and Mergers to provide guidelines on the acquisition,
takeover and merger of a company. There is no significant imposition of
fines or punishment on the firms involved in unfair competition. Contracts
dealing with these types of conduct, insofar as they do not infringe any
of the specific laws mentioned, are valid and enforceable. It is notable
that Malaysian laws on takeover and mergers do not apply to contracts
made or performed outside Malaysia unless the contract expressly states
that the laws in Malaysia will apply (CCH Asia Limited, 1998).
However,
these Malaysian laws relating to unfair competition are obviously not
systematically enforced and might inadequately deal with anti-competitive
business practices of modern global firms, since these laws are very old
and fragmented. They also do not apply to contracts made or performed
outside Malaysia that might have an effect on market structure or power
within the Malaysian economy and injure other competitors. Moreover, there
are no controls or regulations over contract relating to exclusive dealings,
monopolisation, franchises and price fixing. So there is no doubt that
existing laws would ineffectively and inadequately control restrictive
business practices of firms if they occurred as a result of the increasing
competition among firms operating in ASEAN flowing from liberalisation.
In
the Philippines, there are some laws regulating or prohibiting monopolies
and restraint of trade or unfair competition. The Philippines 1987
Constitution provides that "the State shall regulate or prohibit
monopolies when the public interest so requires, no combinations in restraint
of trade or unfair competition shall be allowed"(11).
Part
6
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(11)
Sec. 29 Art. XIII of the Constitution. |