The ASEAN Competition Conference Session 5: Comparisons of Competition Regimes in ASEAN Bali, Indonesia November 2011 Lim Chong Kin Director Head, Competition & Regulatory Law Practice Group (Corporate) Head, Telecommunications, Media & Technology Practice Group

COMPARISONS OF COMPETITION REGIMES IN ASEAN Looking back. Take stock of significant developments in competition policy and law in the last 5 years in ASEAN. –Informs us about where we stand relative to each other, and to the rest of the world, and how to improve. Looking forward. More countries in ASEAN likely to introduce competition policy and law in the next 5 years (ASEAN AEC Blueprint 2015). –Understand differences and impact on businesses (e.g. may unwittingly raise business compliance costs with more, and very different, regimes within ASEAN).

COMPARISONS OF COMPETITION REGIMES IN ASEAN 3

Comparisons across ASEAN General lack of consistency in competition laws across ASEAN Examples: 1.Differing analytical approach: Form v. Effects based Form-based approachEffects-based approach More certainty in terms of what is permitted but more rigid in application. Examples: Thailand, Indonesia, Vietnam More self-assessment required (less certainty), but more flexible (more economics-based). Examples: Singapore, Malaysia

COMPARISONS OF COMPETITION REGIMES IN ASEAN 2. Differing competition policies Competition policy driven by each country’s own economic pursuit and reflective of political and social conditions. 3. Differences in substantive aspects of law –Treatment of vertical agreements e.g. excluded under restrictive agreements & practices (Singapore); included under restrictive agreements & practices (Malaysia). –Threshold for dominance e.g. Indonesia (between 50-75%); Singapore (60%); Thailand (combination of market shares & turnover); Vietnam (30-75%).

COMPARISONS OF COMPETITION REGIMES IN ASEAN –What constitutes an abuse of dominance Subject to a ‘substantial market power’ test (e.g. Singapore, Malaysia); list of prohibited conduct (e.g. Vietnam, Thailand, Indonesia). –Exemption criteria Subject to a ‘net economic benefit’ test (Singapore, Malaysia); specified conduct (Indonesia); hybrid of both (Vietnam). 3. Differing institutional set-up –Role of competition authority and courts e.g. some authorities with dual role as investigator and adjudicator; other institutional set-ups with responsibilities split between the authority (investigate) and courts (adjudicate).

COMPARISONS OF COMPETITION REGIMES IN ASEAN Challenges faced by foreign investors Challenges at two levels: – at individual country level; and – at regional level.

COMPARISONS OF COMPETITION REGIMES IN ASEAN Country level challenges What do businesses want? Access to markets and freedom from anticompetitive behaviour. Generally but cautiously welcome adoption of competition law. But ALSO double-edged sword! Regulatory transparency & certainty (at the country and regional level).

COMPARISONS OF COMPETITION REGIMES IN ASEAN Regional level challenges Reality Check With disparate competition law regimes, businesses may find it harder and more costly to operate in ASEAN. 10 member countries = 10 disparate sets of laws? ???

COMPARISONS OF COMPETITION REGIMES IN ASEAN New role of advocacy Advocacy (narrow role) = competition authorities reaching out to the business community. Advocacy (wider role) = advocating harmonisation of competition law. No need to reinvent the wheel: –Start with what is already available. –Member countries looking at introducing competition policy and law should use best practices (e.g. ASEAN Regional Guidelines).

MODELS OF HARMONISATION Towards an ASEAN model? Not advocating that ASEAN adopts the EU model. –i.e. supra-national competition regulator, harmonised law. –But about recognising that despite the challenges, some harmonisation is possible. Challenge is to ensure a balance between country-specific features and broad harmony. –Short term goals: improve transparency; commonality in merger procedures; strengthening networks. –Medium term goal: greater consistency in analytical approach (e.g. a more economics-based application of the law).

HARMONISATION: THE NEXT STEP FORWARD Short term goals Improving Transparency and Certainty –Take practical steps (e.g. publishing decisions, translating decisions into English). –Issue guidelines (with English translations) to help businesses understand how law will be applied (e.g. how investigations will be conducted). –Implement consultation process to garner regular feedback from stakeholders (e.g. seek views before issuing guidelines and policies). –Set up a one-stop portal on all cases, guidelines, news updates and consultation papers from ASEAN authorities. Good to take stock of resources available and consolidate to maximise benefits (e.g. ICN templates, APEC database)

HARMONISATION: THE NEXT STEP FORWARD Short term goals Harmonising Merger Control –Design a common filing form that can be used across ASEAN. Can still retain individual filing thresholds, but to the extent that filing is needed, the same form/information is provided. –Sync procedures – will provide business certainty given time- sensitive nature of mergers. e.g. similar filing timelines; and similar phases of review (a 2-phase process).

HARMONISATION: THE NEXT STEP FORWARD Medium term goal Working towards some consistency in analytical approach –Its been done before! e.g. EU has gradually moved towards more a economic- based application of the law, and is now more similar in its analytical approach to the US than before. –Set up a working group to identify key areas for harmonisation. Identify and get a consensus on what is practical and achievable in the short and medium term; and Set clear timelines and milestones for implementation.

THANK YOU 15