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Lessons%20from%20Other%20Countries

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With the entry of AirAsia the domestic airline market became more competitive. ... AirAsia also responded to MAS's pricing strategy by offering lower fares. ... – PowerPoint PPT presentation

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Title: Lessons%20from%20Other%20Countries


1
Lessons from Other Countries
  • Presented by
  • Dr. Selim Raihan

2
In this session we will discuss..
  • Competition policy in different countries.
  • Some case studies What are the evidences of
    competition policy helping consumers in other
    countries?
  • Lessons that Bangladesh can derive from cross
    country experiences

3
Competition Policy in Different Countries
  • Australia
  • Malaysia
  • India
  • Vietnam
  • South Africa
  • Chile
  • Venezuela

4
Australian Experience
  • Australian Federation of Consumer Organisations,
    (AFCO) officially founded in 1974, include
  • - Canberra Consumers,
  • - The Country Womens Association,
  • - The Australian Consumers Association and
  • - The Consumer Action Movement.

5
Australian Experience
  • Policy Priorities of Consumers' Federation of
    Australia
  • Establishment of product standards,
  • Trade practices law,
  • Social justice
  • The effects of inflation on consumers.
  • Product labeling,
  • Competition,
  • Media ownership
  • Health.
  • National competition policy,
  • Media ownership,
  • Environmental issues,
  • Product safety,
  • Tobacco control,
  • Financial services and
  • Banking and deregulation.

6
Australian Experience
  • Details in
  • Consumers' Federation of Australia
  • From Wikipedia, the free encyclopedia

7
Competition Policy in Malaysia
  • No national competition policy law.
  • Sectoral approach to competition and regulation.
  • Policies of deregulation and liberalisation of
    the economy since the 1980s
  • Deregulation of trade and investment,
    privatisation of power generation, the
    distribution sector, telecommunications,
    transport and the postal services boosted overall
    market competitiveness.

8
Competition Policy in Malaysia (Cont.)
  • No administrative authority for determining
    appropriate business ethics and trade practices.
  • There are about 30 laws to regulate certain
    activities of enterprises and to protect consumer
    interests.
  • Under these laws a consumer or trader may seek
    redress through the appropriate Ministry, public
    agency or via the Civil Courts.

9
Malaysia (Continued)
Competition Policy in Malaysia (cont.)
  • For details please see
  • Global Competition Forum Website
    www.globalcompetitionforum.org
  • Lee, Cassey (2004) Competition Policy in
    Malaysia, CRC Working Paper 68.

10
Competition policy in India
  • India had a competition law since 1969 by the
    name of Monopolies and Restrictive Trade
    Practices Act.
  • That law has become redundant for several
    reasons. Therefore a new law has been drafted.

11
Competition policy in India (cont.)
  • India has consumer protection act and corporation
    working for securing consumer rights against any
    anti-competitive practices of firms.
  • The Consumer Protection Act is known as COPRA
    (1986). It recognizes the followings rights to
    the consumers
  • Safety
  • Information
  • Choice
  • Representation
  • Redress
  • Consumer Education

12
Competition policy in India (cont.)
  • For details, please have a look at
  • CUTS Centre For Consumer Action Research And
    Training (CART) Consumer Rights And Its
    Expansion Rights And Responsibilities
  • CUTS Articles on Consumer Policy and Issues

13
Competition policy in Vietnam
  • Sector wise policies and regulations.
  • A competition Law promulgated in 2004 with a
    competition Authority
  • The Competition Authority
  • - Controls the process of economic concentration
  • - Investigates unfair competition practices
  • - Sanctions unfair competition practices

14
Competition policy in Vietnam (cont.)
  • For details
  • Comparative Study of Sectoral Regulation in
    Developing Countries Lessons for policy,
    Governance and Implementation
  • -A Case Study of Vietnam.

15
Competition policy in South Africa
  • The Competition Commission plays a pivotal role.
  • The Competition Act (Act. No.89 of 1998) was
    passed by Parliament in September 1998.
  • The enforcement agencies are the Competition
    Commission, the Competition Tribunal and the
    Competition Appeal Court.

16
Competition policy in South Africa (cont.)
  • For details
  • Global Competition Forum Website
    www.globalcompetitionforum.org
  • Comparative Study of Sectoral Regulation in
    Developing Countries Lessons for policy,
    Governance and Implementation
  • -A Case Study of South Africa.

17
Competition policy in Latin American Countries
  • The Chilean system of protection of Competition
    in markets is integrated by The Tribunal for the
    Defence of Free Competition and The Economic
    National Prosecutor's Office. The Decree-Law 211
    of 1973 is the legal framework of this system.
  • The free competition regime in Venezuela started
    in 1992 when the government settled a group of
    new policies in order to prepare the country to
    face globalisation process, including to the Law
    to Promote and Protect the Exercise of Free
    Competition.

18
  • Case Studies

19
The Indian Case Study
  • Ghoten Gas Agency, a Kolhapur based gas supplier
    in India, was forcing the buyers to buy hot
    plates at the time of releasing fresh gas
    connection.
  • The Competition Authority held such a practice.
  • The Authority directed that wherever a customer
    purchased a hot plate simultaneously with a fresh
    gas connection, the gas agency should make it
    clear on the invoice that the hot plates were
    purchased voluntarily.
  • Further a notice board should be prominently
    displayed in the agencys premises that the
    customers were free to purchase hot plate either
    from Ghoten Gas agency or from any other source.
  • Source CUTS Competition Policy and Law Made
    Easy

20
The Malaysian Case Study
  • Prior to 2002, MAS was a monopoly operator in the
    domestic airline market.
  • With the entry of AirAsia the domestic airline
    market became more competitive.
  • AirAsia offers no-frills domestic flights at low
    fares.
  • MAS responded by offering 50 percent discounts
    for ten seats in every flight.
  • AirAsia also responded to MASs pricing strategy
    by offering lower fares.
  • Despite MASs plea for government (Ministry of
    Transport) intervention to resolve the perceived
    price war, the government has maintained that
    the competition between the two firms as healthy
    competition.

21
Case study-South Africa
The Spanish Case Study
  • Four Sugar producers in Spain were engaged in
    market allocation agreement (apart from price
    fixing, sales quota agreements) that restricted
    sugar supply to the level at which maximum
    monopoly profits could be earned.
  • As a result. Spanish sugar prices, for many
    years, were 5 to 9 percent higher than those in
    the rest of Europe.
  • The Spanish Service for the Defence of
    Competition uncovered the cartel and slapped 8.7
    million euros fine on the four producers.
  • Source CUTS Competition Policy and Law Made
    Easy

22
Case study- Kenya
The Kenyan Case Study
  • South Africa Bottling Company Pty (SABCO)
    proposed of taking over all the other bottling
    companies and consolidating them into one entity.
  • The Kenyan competition authority decided that
    such a plan would lead to both horizontal and
    vertical concentration of market power and the
    likely abuse of dominance, and accordingly
    stopped the process from going further.
  • Thus, the Kenyan authority, dealing with a huge
    global company, applied the competition law to
    foreclose likely anticompetitive practices in the
    market.
  • See pages 14,15 of UNCTAD, April 2002 Recent
    Important Competition Cases in Developing
    Countries

23
The Argentinean Case Study
  • Four foreign companies active in Argentina as
    suppliers of medical oxygen to public and private
    hospitals were fined 70.3 million pesos (US 24
    million) for operating a price cartel for medical
    oxygen.
  • See page 4 of UNCTAD, September,2005 Recent
    Important Cases Involving More Than One Country

24
The Brazilian Case Study
  • Three chemical or pharmaceutical firms (Roche,
    BASF and Aventis Animal Nutrition, the latter
    formed through the merger of Rhône-Poulenc and
    Hoescht) fixed the prices and allocated market
    shares of bulk vitamins in Brazil as an extension
    of their participation in an international
    vitamins cartel which was prosecuted in the
    United States.
  • See pages 5,6 of UNCTAD, April 2002 Recent
    Important Competition Cases in Developing
    Countries

25
Lessons for Bangladesh
  • Competition policy and law and consumer
    protection policy can take different forms for
    different countries.
  • There are verities of anti-competitive practices
    and consumer abuses, so the regulatory authority
    should be innovative in nature.
  • For developing countries, resource constraint is
    one of the major problem in establishing
    competition authority.
  • Consumer welfare should be explicitly mentioned
    in the legislation. The role of consumer in CL
    should also include the right of consumer
    organizations to bring complaints to the CA.
  • It is very important that the reports on
    anti-competitive practices be published in the
    media to raise the awareness of the consumers.
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