On 5 November 2015, the full text of the Trans-Pacific Partnership (TPP), as negotiated by the United States and 11 partner countries across the Asia-Pacific region (see text here), was published after more than five years of negotiations.
The text includes a substantial chapter concerning competition policy, which is likely to have an important future impact on the competition law regimes in the Asia Pacific region.
What is the TPP?
The TPP is a regional free trade agreement among the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The agreement is extensive and includes 30 different chapters. It includes provisions regarding trade in goods, trade in services, investment and other policy areas, such as intellectual property protection, operation of state-owned enterprises (SOEs), labour law and conditions, environmental protection, e-commerce facilitation, telecommunications, and competition policy.
The TPP now has to be ratified by each member country and be transposed into national laws before it can take effect.
What is included in the competition policy chapter?
The competition policy chapter includes the following key elements.
Effective competition law
TPP Parties agree to adopt or maintain national competition law that prohibits anti-competitive business conduct and to take appropriate action with respect to that conduct. They agree to endeavour to apply this law to all commercial activities in their territories. Each party will establish or maintain authorities responsible for the enforcement of national competition law.
TPP Parties agree to a reasonably extensive number of obligations related to procedural fairness. These include:
- Before a sanction or remedy is imposed for breaching competition law, an obligation to provide:
- information about the national competition authority's competition concerns;
- a reasonable opportunity to be represented by counsel; and
- a reasonable opportunity to present evidence or testimony in defence.
- The adoption or maintenance of written procedures pursuant to which competition law investigations are conducted. If there are no definitive deadlines for these procedures, the authorities must endeavour to conduct their investigations "within a reasonable timeframe".
- The adoption or maintenance of rules of procedure and evidence that apply to enforcement proceedings and the determinations of sanctions and remedies, including procedures for introducing evidence.
- The provision of the opportunity to seek review of a sanction or remedy, including review of alleged substantive or procedural errors, in a court or other independent tribunal.
- The authorisation for national competition authorities to resolve alleged violations voluntarily by consent of the authority and the company subject to the enforcement action.
- If a notice is published that reveals the existence of a pending or on-going investigation, an obligation to avoid implying that the company referred to in that notice has engaged in the alleged conduct or violated competition law.
- The placement of responsibility on the national competition authority, if it alleges a violation of national competition law, to be responsible for establishing the legal and factual basis for the alleged violation in an enforcement proceeding.
- The protection of business confidential information obtained during the investigative process.
- The obligation to provide a reasonable opportunity to consult with competition authorities "with respect to significant legal, factual or procedural issues that arise during the investigation".
Private rights of action
TPP Parties agree to provide an independent right to seek redress for injury caused by a violation of a Party’s competition law or, to provide persons with a right to request that a Party’s competition authority initiate an investigation and to seek redress after the finding of a violation of competition law.
Cooperation and transparency
TPP Parties agree to cooperate in the area of competition policy and competition law enforcement, including through notification, consultation and exchange of information. They also agree to ensure that final decisions finding a violation of competition law are made publicly available, while ensuring that business confidential information is protected.
TPP Parties agree to adopt or maintain laws that prohibit fraudulent and deceptive commercial activities that cause harm or potential harm to consumers. Parties also agree to cooperate, as appropriate, on matters of mutual interest related to fraudulent and deceptive commercial activities, including in the enforcement of consumer protection laws.
The TPP is an important step forward in establishing a regional standard for competition policy in the Asia Pacific region. Whilst the TPP is consistent with US law and practice, the TPP is likely to lead to change in certain countries in the Asia Pacific region going forward. Of particular importance are the TPP's rules on procedural fairness, which are likely to have an impact in ensuring that the decision making process of competition authorities in certain countries becomes more efficient and impartial.