The Harmonisation
of ASEAN
Competition Laws and Policy from an Economic Integration Perspective
By
Dr. Lawan Thanadsillapakul
The
Malaysian laws relating to unfair competition are obviously not systematically
enforced, however, and, old and fragmented as they are; they are unlikely
to be able to deal adequately with the anti-competitive business practices
of modern global firms. It is noteworthy that the Malaysian laws on
take-over and mergers 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, unless the contract
expressly states that the Malaysian laws in Malaysia will apply.(24) Add to this the fact that there are no controls or regulations over
contracts relating to exclusive dealings, monopolisation, franchises
and price fixing, and there can be little doubt that the existing laws
would ineffectively and inadequately control any restrictive business
practices of firms that occurred under the impact of increasing competition
among firms operating in the ASEAN as a result of liberalisation.
Nonetheless,
Malaysia, along with other ASEAN members, is seeking to craft a proper
competition law and policy. The Ministry of Domestic Trade and Consumer
Affairs (MDTCA) has drafted a policy paper and prepared a bill dealing
with fair trade and competition in Malaysia.(25) The
Eighth Malaysia Plan (RMK-8) provides the mandate of a fair trade or
competition policies and laws; it states the need for policy and law
to forestall anti-competitive conduct such as collusion, cartel price
fixing, market allocation and abuse of market position and to prevent
firms from protecting or expanding their market shares by means other
than greater efficiency in producing what consumers want. While no comprehensive
competition law and policy is yet in effect, separate policies are currently
implemented by specific government agencies dealing with privatisation
and corporatisation; licensing of industries; domestic and national
trade policies; foreign participation and ownership policies; and sectoral
regulators. However, in 1998 and 2000 two sectoral competition laws
were passed on communication and energy, respectively. Malaysia is aware
of the need carefully to weigh the benefits of competition law for the
nation's development requirements against the need to ensure that the
law is not used unfairly to benefit any international body or developed
country.(26) This clearly expresses the fundamental
view of Malaysia in cautiously dealing with the competition issue. This
sentiment is in common with other ASEAN members' lack of competition
culture.
·
Myanmar likewise has no competition law or policy as such, nor is one
apparently on the policy makers' immediate horizon. (27) The ambivalence towards competition law and policy in this country may
be fuelled by legitimate concern about the risk of dominance of foreign
investors were the inward flow of foreign direct investment to be liberalised,
by scepticism as to the benefits of competition and by a fear of losing
national identity or sovereignty. The Myanmar government is however
seeking a solution that will balance the interests of competition with
the existing economic structure. Like other countries in the region,
Myanmar lacks a competition culture, the country having, for three decades
now, applied an inward-looking policy and operated a closed-door form
of socialism, and transition is slow. Any competition law in Myanmar
would place consumer welfare at the heart of its policy. Regarding the
economic efficiency aspect of national competition law, the particular
characteristics of the country must be taken into account. As to market
competition, educational levels are low, information is asymmetrical,
the private sector is under-developed, the distribution of wealth is
skewed, and so on.(28) Clearly therefore, Myanmar
will need "escape clauses" or exceptions, (29) and at any rate time to develop both the economic structure and legal
framework needed for the elaboration of an effective competition law
and policy.
·
In the Philippines, there are some laws(30) that regulate
or prohibit 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."(31)
There are other general and specific laws that prohibit and regulate
the consequences of acts in restraint of trade. In particular, Article
186 of the Revised Penal Code R.A. 3815 (1930) punishes monopolies and
combinations in restraint of trade:
The
revised Penal Code imposes a penalty of imprisonment or a fine or both
upon:
·
Any person who enters into any contract or agreement, or takes part
in any conspiracy or combination in the form of a trust or otherwise,
in restraint of trade or commerce or to prevent by artificial means
free competition in the market.
·
Any person who monopolises any merchandise or object of trade or commerce,
or combines with any other person or persons to monopolise that merchandise
or object in order to alter the price by spreading false rumours or
making use of any other artifice to restrain free competition in the
market.
·
Any person who, being a manufacturer, producer, processor of any merchandise
or object of commerce from any foreign country, either as principal
or agent, wholesaler or retailer, combines, conspires, or agrees in
any manner with any person likewise engaged in the manufacture, production,
processing, assembling or importation of such merchandise or object
of commerce or with any other persons not so similarly engaged for the
purpose of making transactions prejudicial to lawful commerce, or of
increasing the market price in any part of the Philippines, of any such
merchandise or object of commerce manufactured, produced, processed,
assembled in or imported into the Philippines, or of any article in
the manufacture of which such manufactured, produced, processed, assembled,
or imported merchandise or object of commerce is used.
If
the offence affects any food substance, motor fuel or lubricants or
other articles of prime necessity, the maximum penalty will be imposed.
In addition, the object of any of the above contacts will be subject
to forfeiture by the government. When the offence is committed by a
corporation, the directors or managers of the corporation of the agent
or representative in the Philippines, in the case of a foreign corporation,
who knowingly permitted or failed to prevent the commission of such
offences will be held liable as principals.
The
Penal Code gives a right of action to any person who suffers damage
as a result of any act by any person involving unfair competition in
agricultural, industrial or commercial enterprises or in labour, through
the use of intimidation, force, deceit, machination or any other unjust,
oppressive or highhanded method. Article 188 of the Code punishes the
substitution and alteration of marks and trade names, and Article 189
provides criminal sanctions for unfair competition, fraudulent registration
of marks or trade names, fraudulent designation of origin and false
description. Republic Act 3247 (Prohibition of Monopolies and Combinations
in Restraint of Trade) (1961) provides for recovery of treble damages
for civic liability arising from anti-competitive behaviour. Furthermore,
Republic Act 165 (1947) and Secs. 29 and 30 of Republic Act 166 (1971)
(Trademark Law) provides civil remedies against unfair competition,
false designation of origin and false description. Presidential Decree
49 (1972) (Copyright Law) penalises copyright infringement, while Republic
Act 8293 (1997) (referring to the Intellectual Property Code and the
Intellectual Property Office) and Republic Act 386 (1949), Civil Code
of the Philippines stipulate the collection of damages arising from
unfair competition. Republic Act 7394 (1932), the Consumer Act of the
Philippines, imposes penalties for such behaviour as deceptive, unfair
and unconscionable sales practices in both goods and credit transactions.
The Philippines Corporation Code Batas Pambansa Blg 68 (1980) provides
for rules and procedures to approve all combinations, mergers and consolidations.
The Revised Securities Act, Batas Pambansa Blg 178 (1982), Republic
Act No. 337 regulate Bank and Banking Institutions and other purposes
(General Banking Act, 1948). Also the Business Names Act(32) punishes certain acts where no proper registration of the firm or business
name or style is made with the Department of Trade or Industry. Republic
Act No. 623 (1951) prohibits certain acts if performed without the written
consent of the manufacturers, bottlers or sellers of duly stamped or
marked bottles, boxes, kegs, barrels and other similar containers.
There
are also special laws that regulate monopoly. Among these is Press Decree
No. 576-A, which prohibits the ownership by one person or corporation
of more than one radio or television station in one municipality or
city, or of more than five AM and five FM radio stations or of more
than five television stations in the country. Any violation is punishable
by imprisonment or a fine or both, and will result in the cancellation
of the franchise and the confiscation of the station and its facilities
without compensation. Republic Act 7581 (1991) (Price Act) protects
consumers by stipulating price manipulation as illegal acts. The Price
Act imposes a penalty of imprisonment and a fine upon persons habitually
engaged in the production, manufacture, importation, storage, transport,
distribution, sale or
Part
5
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(24) CCH Asia Ltd.
(1998), Doing Business in Asia. Bangkok, CCH Asia Limited.
(25)
Malaysia Country Paper submitted to the East Asia Competition Policy
Forum by Dr Sulaiman MAHBOB, Secretary General, Ministry of Domestic
Trade and Consumer Affairs.
(26)
Competition Policies/Laws, Malaysian Report to APEC.
(27)
As reported by KHIN OHN THANT, "A Myanmar's Perspectives",
East Asia Competition Policy Forum, February 2003, in ASEAN Conference
on Fair Competition Law and Policy in the ASEAN Free Trade Area Competition
Policy and Economic Growth in ASEAN Countries.
(28)
Ibidem.
(29)
For example, small and medium enterprises are encouraged to form clusters
for economic scale and to be competitive. The government allowed small
groups of private businesses for high cost infrastructure projects in
the public interest and for economic scale. Such actions run counter
to fair competition as defined in competition law and policy.
(30)
The Anti-Competition Law and regulations in the Philippines presented
in this article are compiled from various sources of the Philippines
national law and from the Country Paper of the Philippines, in C.C.H.
Asia Ltd, See also supra note 23.
(31) Section 29, Art. XIII of the Constitution.
(32)
Act No. 3883 (1931).