The Financial Express

How independent will be the Competition Commission?

| Updated: October 19, 2017 14:41:04

How independent will be the Competition Commission?

Entrepreneurs with foreign direct investment (FDI) and also local investors in new ventures may face stiff competition from existing players in any sector of business. The experience of developing countries shows that once big businesses are able to take the political rein, they can easily entrench their monopoly strongholds by influencing government policy. New investment feels secure in a level playing field and this may be ensured by fair competition. Experience shows that the government  should establish a 'competition commission'.  A competition commission is responsible for the implementation of legislation relating to the following areas: competition, anti-dumping and subsidies, consumer protection, advertising, unfair competition, metrology, quality control and non-tariff barriers, bankruptcy procedures, trademarks, patents, plant varieties, appellations of origin and transfer of technology. Competition law and Competition Commission are one of the most important elements that helps promote economic development and equality in developing countries.
The United Nations Conference on Trade and Development (UNCTAD) and World Bank (WB) promote and support developing countries, including Bangladesh, to frame Competition Law and UNCTAD gives technical support for the draft of such laws. Bangladesh Parliament passed the Competition Act 2012 but has yet to set up a Competition Commission (CC).
Robi and Airtel, two of the six mobile operators in the country, have recently applied to the Bangladesh Telecommunication Regulatory Commission (BTRC) for permission for their amalgamation. The Commission has yet to give its opinion.  The applicants went to the High Court Division of the Supreme Court against the delay in giving permission. The High Court has issued rule on secretaries of the cabinet division, ministries for commerce and telecommunication and  BTRC as well as Robi and Airtel authorities to come up with explanations within a specific time frame. It reportedly asked why the matter will not be resolved upon evaluations carried out by the Bangladesh Competition Commission.
INDEPENDENCE OF COMPETITION COMMISSION: The model law promoted by UNCTAD on competition has been formulated to establish the most efficient type of administrative authority which is  independent of the government and has powers to conduct investigations and apply sanctions, etc., while at the same time provides for the possibility of recourse to a higher judicial body. The nomination and appointment and removal of chairman and members of CC should be in such a manner that the CC may work without any influence and fear. Budgetary independence would ensure funding does not become a tool for influencing the activities of the CC.
The Bangladeshi law has some questionable provisions which need to be addressed in order to make the CC really effective.
FORMATION OF CC: Countries that emphasise the independence of Competition Commission allow the latter to appoint and employ its own personnel. The Bangladesh law empowers the government to appoint secretary of the commission and the terms and condition of his job will be determined by the government. The commission will have authority to appoint staffs of their own but at the "request" of the commission,  government will send staffs on probation.
In India, the central government has constituted a committee for the selection of chairperson and other members of the CC. The committee consists of (a) a person, who has been a retired judge of the Supreme Court or a High Court or a retired Chairperson of a Tribunal established or constituted under an Act of Parliament or a distinguished jurist or a Senior Advocate for five years or more; Member, (b) a person who has special knowledge of, and professional experience of twenty-five years or more in international trade, economics, business, commerce or industry; Member, (c) a person who has special knowledge of, and professional experience of twenty-five years or more in accountancy, management, finance, public affairs or administration; Member, to be nominated by the Central Government. The committee use to devise its own procedure for purpose of the selection of the Chairperson or a Member of the Commission.
UNCTAD reports that some countries appoint representatives of stakeholder industries, associations (e.g. professional or trade associations) or groups (e.g. labour groups/unions) to the membership of the CC. This has the advantage of including members having  direct industrial experience into the Commission. Thailand has a provision of  authorising the Department of Internal Trade to request three recommendations each from the Federation of Thai Industries and the Thai Chamber of Commerce.
APPEAL AGAINST VERDICT OF CC: The UNCTAD model law suggests that any aggrieved party may appeal within certain days to the appellate body or to an appropriate judicial authority against the whole or any part of the decision of the Administering Authority, or on any substantive point of law.
CC of Bangladesh is supposed to be a quasi-judiciary body.  It may reconsider the decision upon request from an aggrieved party and the appellate authority has been given to the government. The verdict given by the government and Sessions Judge is final. The appellate power given to the two authorities - Sessions Judge and Government - seems confusing. This also gives an undue authority to the government to control the CC. The standard practice should be to allow appeal to higher court considering the responsibility, authority and importance of CC.
The parties in Singapore may appeal against the decision of the Competition Commission of Singapore (CCS) against a direction/imposition of a financial penalty to the Competition Appeal Board (CAB). The aggrieved party may even go to the High Court and Court of Appeal either on a point of law arising from a decision of the CAB or from any decision of the CAB as to the amount of a financial penalty.
IMPROVEMENT:  The Bangladesh competition law does not apply to government-controlled businesses on national security ground.  
The Competition Commission's functions may overlap with that of the power and energy regulatory commission or the telecom commission, potentially leading to conflicts over jurisdiction or turf wars if the laws and policies are not framed carefully.
The existing law will apparently make the CC a department of the government  while the WB and UNCTAD  emphasise on the independence of such body. There are interesting findings that, in some countries like the Republic of Korea and Brazil, the competition authority started out as a department of government but has later gained more or full independence. Let us hope that CC of Bangladesh will gain independence in course of time with appropriate amendment to the law.

The writer is a Legal Economist.

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