competition law definition and scope dr. a.k. enamul haque professor of economics united...

Competition LawDefinition and ScopeDr. A.K. Enamul HaqueProfessor of EconomicsUnited International University

• Goal:

• Ensure fair price of products and services

• Improve efficiency in production

• Encourage innovation

All competitive prices areAre fair prices

Why competition law?

Problems of non-competition!• Collusion – sellers collude to raise price

• Abuse of dominance – big market share holders use various measures to create entry barriers−Predatory pricing−Exclusive deals−Tying −Conditional sales−Denial −Resale price control

Problems of non-competition• Bid rigging

• Any type of entry barriers

• Restriction on prices

• Merger to reduce competition

• Acquisition to reduce competition

• Combination

Bangladesh Competition Law 2012• Applicable on all commercial

transaction – includes sale, supply, production, distribution and also storage

• Excludes−National security related goods and

services −Sectors not open for private investment

CCB• To establish a Competition Commission in

Bangladesh through a Gazette notification

• A statutory body with quasi-judicial powers

• 1 Chairperson

• Maximum 4 Members−Economics, Market Expert, Public

Administration and Law−No two from one area−Each with at least 15 years of experience in

relevant area.

CCB continues• Chairperson is the CEO

• Tenure for 3 years with 1 renewal possibilities

• Up to 65 years

Responsibilities of CCB• To promote competition and remove

anti-competitive behaviour• To investigate upon receiving

complains or on suo motto.• To sue • Approve merger and acquisition• Training and awareness• Establish standards related to

competitive behavior• Research, seminar, etc.• Protect consumers’ rights

CCB powers• Civil Procedure 1908

• Penal Code 1860 section 196, 193, 228

• It is a civil court

CCB - authorities• Anti-competitive agreements

−To create monopoly, cartel, through collusion−Price fixing−Bid rigging−Restricting innovation−Distribution of market geographically

• Abuse of dominance−Combination−Exclusive sale or distribution agreement−Denial −Fixing resale price

CCB authority• Predatory pricing

• Creating restriction for entry

CCB process• Investigation based on

−Complains or on its own

• Can pass interim order effective up to 60 days with provision to increase for another 60 days−Appeal is allowed within 30 days

CCB • Punishment

−Deter −Fine up to 10% of the average turnover of

past 3 years−In case of cartel

• 3 times the profit or 10% of the average turnover of past three years (whichever is greater)

−Additional fine for non-compliance• 1 lakh per day• And or 1 years of jail sentence

−Authority to order split/de-coupling of a company

Limits• To deal with issues which are

affecting competition

• Can investigates matters outside Bangladesh which might affect competition in Bangladesh

• Appeal within 60 days−With 25% deposits−In a Session Judge Court