Most of the members of the Association of Southeast Asian Nations (ASEAN) are expected to introduce a nation-wide competition policy and law by 2015 in fulfillment of the goals of the ASEAN Economic Blueprint. With several companies both domestic and multinational companies operating within the ASEAN region, compliance with the respective competition laws in each of the jurisdictions will be a continuous process. Competition law compliance in the ASEAN region can be a challenge with companies having to comply with the different competition rules applicable in each of the ASEAN member states. Staying compliant with competition law in the ASEAN region thus requires companies and businesses to understand the nuances and distinctive features of the competition rules in each of these jurisdictions.
Presently, only five ASEAN jurisdictions have generic competition laws namely – Singapore, Malaysia, Indonesia, Thailand and Vietnam. While Laos does not have any generic competition statutory legislation in place, it issued a Decree in 2004 with the objective of promoting fair business conduct; notably this Decree has yet to be enacted. Similarly, the Philippines does not have generic competition statutory legislation in place at present though there are a number of sectoral laws that address anti-competitive conduct and unfair competition in their respective markets. It is understood, however, that both countries are in the process of drafting their generic competition laws in view of the 2015 deadline. This article only summarises the general aspects of behavior and/or agreements which are prohibited under the competition laws, and provides a broad overview of the differences in the prohibition of such behavior and/or agreements between the countries within the ASEAN region1.
Cartels and anti-competitive agreements
There has been increased cooperation within the ASEAN nations in relation to competition law. The ASEAN Experts Group on Competition was a committee created to supervise the development of competition law and policy in ASEAN. With the increased regional cooperation in ASEAN it is likely that the various competition regulators could share information regarding cartels and anticompetitive activity in the region. This could cause several hurdles for companies when dealing with cartel investigations with the different competition law regulators. Leniency varies widely among the ASEAN jurisdictions and certain jurisdictions do not have a leniency regime in place. Furthermore, in certain ASEAN jurisdictions the participation in cartels is a criminal offence. The differences in the treatment of cartels within ASEAN would require companies to have compliance strategies that comply with each jurisdiction without being too strict.
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Abuse of dominance
The concept of dominance and the treatment of companies with high market share also differ between countries in the ASEAN region. Companies with high market shares in each of the jurisdictions may have to ensure that commercial strategies are applied in a manner which takes into account the differences between such treatments. While each jurisdiction differs in its definition of market dominance, there is commonality in the prohibition that an abuse of market dominance is prohibited under each jurisdiction’s competition law. Therefore, it is vital to understand the legal and economic implications when assessing the conduct of such companies. With competition regulators increasing their focus on abusive practices by dominant companies, it would be prudent for companies to align their commercial strategy with the respective laws.
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Cross-border mergers have significantly increased within the ASEAN region over the last few years. With the exception of Malaysia all the four ASEAN countries with general competition legislation have a merger control law in place. Co-ordinating a merger filing requirement with different procedural regimes may be challenging. Companies active in ASEAN that are significantly involved in mergers and acquisitions need to be aware of the different trigger mechanisms (for mandatory filing regimes), filing deadlines, the identification of the data and information required to be submitted in each jurisdiction. Preparation for a multi-jurisdictional filing would also require a consistent legal position to be submitted to each of the different competition regulators for example – how a company plans to define a relevant market in each of the jurisdictions should be consistent.
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Within the ASEAN region, the five jurisdictions of Cambodia, Philippines, Brunei Darussalam, Lao People’s Democratic Republic and Myanmar have yet to enact their respective generic competition laws. The coming years could possibly be the establishment and formative years of new competition regulators within ASEAN and the region would likely be enforcing competition laws more proactively than in the past. Given the likely growth in the competition law environment in ASEAN, companies would need to embrace competition law compliance within the broader risk management environment. Compliance programs that have specific competition law structure and training that are more commonly found in multinational companies will soon be a required feature in the local or regional companies. Such companies would need to go beyond the regular generic compliance programs and work towards getting their employees updated with competition law principles which would thereby reduce the risks of inadvertent infringements of competition law.