Competition
Law, Part 7
The
Philippines laws, even though there are several relating to unfair competition,
mainly focus on trade, and do not cover investment. There is no regulation
of mergers and acquisitions. Most laws do not clearly stipulate the amount
of a fine or compensation in cases where competitors are injured. There
are no criteria to justify the behaviour of firms, which might be regarded
as unfair competition, and there is no measure to assess how the public
interest would be affected. Also there is no clear procedure provided
in the Philippines law for dealing with firms involved in unfair competition.
Therefore, the existing laws are inadequate to cope with the problems
that may occur when the ASEAN Investment Area is implemented.
In
Singapore there is The Multi-Level Marketing and Pyramid Selling Prohibition
Act. This Act makes it an offence for any person to promote or participate
in a multi-level marketing scheme, which essentially embraces schemes,
or arrangements, which recruit participants in pyramid selling on the
chain-letter principle. However, apart from this, there is no Anti-competition
law in Singapore. Its open economy and liberalised investment regime have
been considered sufficient to guarantee free competition in Singapore.
In
Thailand, there is The Prescription of Prices of Goods and Anti-Monopoly
Act of 1979, and The Investment Promotion Act 1977 that includes
a guarantee against state competition, against competition by state monopolies
selling or dealing in similar products, against price control by the state,
against export restriction, and against importation by the state or its
agencies and enterprises. However, the practice of imposition of import
bans on competing products to protect the activities of the promoted enterprise
counteracts the guarantee of fair competition in this case. This is an
example of the ineffective implementation of unsystematic competition
rules.
All
ASEAN countries also have Anti-Dumping laws and a Consumer Protection
Law. But none of them has a systematic competition law that could regulate
the rivalries of firms and control the potential restrictive business
practices of producers in global networks. It is important that ASEAN
countries should introduce a comprehensive regime of investment liberalisation,
deregulation, privatisation and competition law enforcement rather than
only relaxing laws on the spot and lifting barriers item by item, which
is not effective and is likely to confuse foreign investors. Foreign investors
usually feel burdened by tons of laws and regulations that sometimes counteract
each other. Regulatory differences in the investment field are obstacles
to foreign investors (Trisciuzzi, 1983)(14).
Consequently, comprehensive regionalisation of competition laws could
effectively enhance the favourable legal environment for attracting foreign
investors (Geist, 1995; Baker & Holmes, 1991: 30)(15).
1.2.1
Merger Regulations for Replacing Regulations on Restriction of Foreign
Equity in ASEAN Investment Laws
In
this section I propose to focus on merger control in ASEAN. Even though
a comprehensive regional system of merger control does not yet exist,
it is in the interests of ASEAN to establish merger control in the region.
Since ASEAN will have to implement national treatment in the near future
and eliminate investment laws, which are incompatible with the objectives
of the ASEAN Investment Area, merger regulations are needed to replace
those laws used to function as a screening instrument. This is to ensure
that there would be no emergence of cartels, trusts, oligopolies, concentrations
or dominant market positions to harm the ASEAN economy, when the screening
process and regulations of ASEAN investment laws are eliminated.
Part
8
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(14)
Trisciuzzi (1983) says: "Perhaps the most important potential benefit
would be the harmonisation of currently diverse systems of national laws
and regulations. For example, harmonisation could reduce the high costs
borne by multinational corporations in dealing with widely divergent regulatory
regimes in different countries".
(15)
Geist (1995) pointed out that it is not surprising to find that investors
encounter and become discouraged with the potentially confusing and time-consuming
regulations established by individual states. Also Professor Mark Baker
noted in a 1991 review of Latin American FDI codes that "the greatest
disincentive to direct foreign investment was dealing with local authorities.
Foreign investors. |