Fair competition commission

Investigative Plan - Competition

Joshua MsomaTanzania Fair Competition Commission

Sixth Annual African Dialogue Conference

Lilongwe, MalawiSeptember, 2014

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Developing Investigative plan

Introduction

Powers of the Commission to obtain information are stipulated in the Fair Competition Act, No.8 of 2003, under S.71 and Fair Competition Commission Procedure Rules 13 of 2013.

Written request for information

Under Rule 13(1) The Commission may, with or without summons, require a person to provide all necessary information.

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…Developing Investigative plan

Rule 13(2)

Under this Rule, among other things, the Commission shall:

– State the legal basis and the purpose of the request.

– Fix the time for the information to be provided.

– Specify the penalty for the supply of incorrect/misleading information (simple request).

– In case of summons - Specify the prescribed penalty for the supply of incorrect/misleading information and for not complying with summons.

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…Developing Investigative plan

Powers to enter and Search

Section 71 (5) and Rule 14 -16 avail powers to the Commission to conduct a search, after applying a searching warrant from the Fair Competition Tribunal.

Privileged information

Fair Competition Commission Procedure Rule 16 (6) stipulate how privileged communications will be handled.

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Elements of Infringements for Investigations

Restrictive Trade Practices

Investigating competition violation falls under Part II of FCA, specifically in S. 8 – 14:

Anti-competitive agreements.

Abuse/Misuse of market power.

Mergers and acquisitions.

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Initiation of a Complaint

Section 69 (1) and (2) FCA

The Commission may initiate a complaint against an alleged prohibited practices.

Any person may submit information concerning an alleged prohibited practices to the Commission in any manner, or form or in the prescribed form by the Commission.

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Tips - Investigation of Complaints

Rule 10 – 12For complaints lodged at the Commission, they are first assessed in the screening unit to ascertain whether it falls under Commission jurisdiction.

Where the screening unit is of the opinion that there is a case to answer the investigation will be commissioned.

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…Tips - Investigation of Complaints

Procedure under Rule 17 (1) – (4) Preparation of investigation plan for the alleged

conduct under the guidance of the screening unit.

Rule 17(1)-(4) The Commission conducts its hearing in an

“inquisitorial” procedure, which means the hearing is also part of investigation process

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Tips – Investigation Plan Matrix

Table 1.

Investigation Plan

Table 2.

Implementation of Investigation Plan

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Table 1 – Investigation PlanIndicator (s) Offence (s) Element of

Offence Legal

Evidence Economic

Evidence Place to Inquire

information Low price of product X immediately after new entrant in the market (Predatory pricing!)

Abuse of dominance position contrary to S. 10 (1) of FCA, 2003

A conduct must be done by a dominant firm which its-a) object is to prevent, restrict or distort competition)

b) effect is to prevent, restrict or distort competition or c) likely effect is to prevent, restrict or distort competition.

Proof of dominant position as per S.5 (6) of FCA

a) Acting alone – can significantly reduce competition over period of time ( Exception of regulated sectors)

b) market share is 35%+

-Sales Volumes data before and after the conduct

-Consumers detriment and effect to competition

-Market share information

– Stock Exchange market- Visit company registrar Revenue Authority etc

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Table 2. Implementation of Investigation Plan

Action Taken (Visits/Letters)

Documents/information/date obtained

What the document/information prove

Comments/remarks

Request information from stock exchange market or;

Summons issued to MD of firms or;

Search conducted (down raid)

-Market shares before and after entry-- individual firms market shares (players)

-The firm has 35%+ market share which stood at 70%-Predatory pricing trends (2009 – 2013)

The investigation proves there are violation of competition.

Preparation of provisional findings to be communicated to the respondent.

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Issuance of Provisional findings and Reply

Rule 18, 19 and 20 The Commission will issue a provisional findings to

the respondent requiring the respondent to make written representation within specified period.

The Commission will spell out the proposed remedial action that may be implemented through: Compliance orders/agreements or Compensatory orders or Fines.

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Proposed Remedy/Process

Agreement/ Settlement.

Negotiation for settlement.

Objection of provisional findings

(Rights to Appeal to FCT)

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Asanteni

Thank you

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Director GeneralFair Competition Commission2nd Floor, Western Wing, Ubungo Plaza, Morogoro Road,P.O.BOX 7883,Dar es Salaam.TEL:+255222461565, 2461566, 2461568,

2461569; FAX:+255 222461567;E-MAIL: info@competition.or.tz,WEBSITE: www.competition.or.tz