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Toolkit for Competition
Advocacy in ASEAN
Toolkit for Competition
Advocacy in ASEAN
The Competition Act of Thailand, dated 1999, includes
an exemption of State-Owned Enterprises (SOEs) which
currently fall under the law of budgetary procedure.This
is set to change with a proposed amendment prepared
by the
Office of the Trade Competition Commission
(OTCC)
that includes a number of revised provisions to
create a more competitive business environment.
The amendment, which is slated for submission to the
Cabinet in early 2016, foresees an end to discrimination
on the basis of ownership. The proposal to extend the
scope of application of the competition law to SOEs is in
accordance with the principle of competitive neutrality
which seeks to maintain a level playing field between
public and private business. Competitive neutrality
has been gaining ground in international discussions
and calls for the same set of rules apply to public and
private enterprises, irrespective of ownership. With the
objective of safeguarding efficiency, business activities
by government-linked or government-controlled
enterprises should not have a competitive advantage
over private ones.
The OTCC consulted with academic experts and
commissioned a study to analyze business structures
as well as the competition practices of SOEs in selected
sectors, namely airlines, electricity, petroleum refinery,
finance and banking, transport and tobacco. The study
provides valuable recommendations to substantiate the
proposed amendment of the competition law, with a view
towards enhancing the effectiveness of enforcement.
to a cartel that gets the most import permits and can
dictate prices. Meanwhile, advisories issued to banks
about uniform fees, and to airlines and internet service
providers about misleading advertisement have been
highly beneficial for consumers.
A cornerstone of the OFC’s strategy was initiating
a continuous exchange with the responsible sector
regulators and other stakeholders. To this end, the
Sector Regulators Council, OFC Working Groups (e.g.
with a think tank on research and advocacy), as well
as the Competition and Regulatory Reforms Experts
Group (CRREG) were set up. The idea is to maintain
increasingly institutionalised stakeholder relations
through platforms for regular dialogue, networking
and cooperation. In combination with other advocacy
tools (such as policy papers and recommendations,
annual reports, market studies, seminars, etc.), this
is instrumental in building relations with the larger
competition community, particularly the existing sector
regulators. It has also contributed to the identification
of “competition champions” who in turn have helped
catapult the competition policy agenda to the forefront
of national economic discourse and policy-making.
Take-Away Tips
Take-Away Tips
The work of the OFC showcases the importance of
advocacy within the context of a fragmented sectoral
regulatory environment. A number of considerations were
critical in the process, starting with a clear prioritisation
on strengthening competencies and confidence, along
with a focused resource allocation. Ensuring a unified
approach to competition issues required promoting inter-
agency coordination through dynamic and constructive
stakeholder engagement, including communication plans
as well as periodic and context-specific consultations.
Moreover, traditions, such as the annual observance of
the National Competition Day, can help raise the public
awareness about competition policy and reinforce a
national competition culture.
Market studies and other research on competition
issues can serve to obtain credible information about the
potential impact of anti-competitive behavior on sectors
and stakeholders. As such, they can be a key advocacy
tool and help persuade policy-makers about advancing
competition-related reforms, and even support an
amendment of prevailing laws and regulations.
THAILAND: Reviewing the Scope of the Competition Law vis-à-vis State-Owned
Enterprises in Thailand
MALAYSIA: Countering Price-Fixing among Professional Bodies in Malaysia
VIETNAM: Addressing Public and Private Barriers to Entry in Vietnam
In 2013, the
Malaysia Competition Commission
(MyCC)
completed a “Market Review on Fixing of
Prices and Fees by Professional Bodies in Malaysia
under the Competition Act 2010 [Act 712]”. The
report highlighted the need to devote attention to the
professions from a competition policy perspective.
Aside from describing key restrictions to competition
and their alleged general interest justifications, the
report also proposed a future course of action aimed
at encouraging more pro-competitive mechanisms.
The research involved 131 bodies or associations
in 35 sectors. Its findings indicated a considerable
number of instances where Malaysian professional
bodies appear to regulate prices or fees for their
members. This was either backed by a specific
legislation or where a governing body had regulatory
authority over a certain sector and established a scale
of fees for that sector
1
.
Although any price fixing agreements that are made in
accordance with a legislative requirement are allowed,
such agreements must also be carefully assessed
against the purpose and principles of the Malaysian
Competition Act.
Following the publication of the report, the MyCC
organised a series of public consultations with
members of professional bodies in order to seek
their views and support a review of their price-fixing
practices. Furthermore, the MyCC collaborated with
the Malaysian Productivity Corporation (MPC) in
As a crucial part of economic reforms in Vietnam in
the wake of transitioning to a market economy, the
Vietnam Competition Law was passed and Vietnam
Competition Authority (VCA) established in 2005.
Since the beginning, the VCA has set a priority on
advocacy activities concerning a wide range of
subjects and sectors. However, a key obstacle has
been sectoral laws that are inconsistent and in conflict
with the competition law, thus creating considerable
barriers to entry in certain markets. At the same time,
enterprises operating in specific sectors continue to
carrying out a Regulatory Impact Assessment (RIA)
and a Competition Impact Assessment (CIA). These
served to study whether the existing restrictions
under national legislations pursue a legitimate public
interest objective, and whether there was any leeway
for regulatory change.
As one of the major outcomes of the report and
subsequent seminars, the Malaysia Institute of
Chartered Secretaries and Administrators (MAICSA)
issued a technical announcement for its members
that it will not proceed with a proposed guide on fee
indicators for professional secretarial services as this
was not mandated by law. Four other sectors followed
suit later in 2015 and issued directives to dismantle
their scale of fees, in order to uphold the spirit of the
competition law.
have a limited understanding of the competition law
and its underlying principles.
Against this backdrop, the VCA has set out to ensure
legal coherence and enhance the awareness about
the competition law through a number of activities.
At the core is an advocacy strategy that comprises
two main actions: first, periodically assessing
the competition situation in focal sectors
2
; and
second, organizing national seminars with relevant
stakeholders. Moreover, the VCA has conducted a
legal inventory in the form of a report titled “Review
of Competition-Related Regulations in Sectorial
Regulatory Laws”. The purpose is to comprehensively
review the entire legal system on sectoral issues, and
provide an assessment on the degree of conformity
and compatibility (or lack thereof) between the
competition law and sectoral laws.
As a result of the report and subsequent consultations,
the overall awareness about competition issues among
government agencies and the business community
has noticeably increased. Furthermore, some sectoral
regulations have been replaced in order to avoid any
conflict with the competition law.
Take-Away Tips
TAKE-AWAY TIPS
In promoting fair competition, it is not always necessary
for a CA to launch into a full investigative process. Rather,
it is important to continuously engage in consultations
with different stakeholders and to sensitise them about
the need to bring about a competitive environment. A
market review can be a good starting point for a CA to
advocate for the consideration of competition principles
in existing or proposed regulations, based on research
and clear evidence.
An important lesson is to focus resources, attention and advocacy on selected
sectors. Through a combination of activities, notably market studies and
the legal review, it was possible for the VCA to provide some analysis and
evidence of existing barriers to entry that are either caused by public or private
actions. Having specific examples to illustrate competition issues to a variety
of stakeholders can facilitate their understanding and promote buy-in for the
competition agenda.
1.
For details, see:
2.
Up to now, almost 30 sectors have been reviewed by VCA. See also:
