Competition Law Definition and Scope Dr. A.K. Enamul Haque Professor of Economics United International University

Goal: Ensure fair price of products and services Improve efficiency in production Encourage innovation All competitive prices are Are 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