ASSIGNMENT ON COMPETITION LAW 2012

An inherent danger of competition is that prominent companies may have already achieved such positions in the market that they are able to prevent others from competing or even deterring market penetration. Thus, they may damage the process of competition as a whole.

Abstract

Bangladesh has faced emerging effects on the marking place, the insider trading and business is subject to be specialized by prominent laws of the country. That it can be assured for the protection of stakeholders or buyers in the market place. The Competition Law 2012 has frameworks which monitor the conducts and regulates fair trade and competition inside the market, so that the atmosphere in the business rules cannot be in danger. The purpose is that when free trade market system breaks the Competition Law guides to maintain market strategies and schemes.

Chapter 01

General Introduction

1.1Introduction:

Bangladesh is a developing country and as such, it needs to make the desired growth through increasing local and foreign investment by reducing unequal competition in the trade and business. To ensure the availability of quality products and services for the common people at a competitive price and to get the maximum utility of the product/service, it is essential to create a healthy competitive environment in the market.

1.2 Research Questions:

Whether Bangladeshhas effective frameworks to prevent monopolies and dangers in competition inside the market place?

1.3 Objectives:

  • To review the present situation market place.
  • To identify the major problems.
  • To provide particular suggestions for prevention.
  • What should be done to reduce monopolies and

1.4 Rationale of study:

I hope this study can critically analyze the elimination dangerous monopolies inside the market place.This study support the causes and problems in existing frameworks and measures effective or not and what ought to be done to make sure to prevent the problems.

1.5 Methodology of the study

In any work data collection is very important. Every research involves a method by which the desired result can be achieved. In this regard I have used both qualitative and quantitative methods.

Chapter 2

Frameworks:

‘’An inherent danger of competition is that prominent companies may have already achieved such positions in the market that they are able to prevent others from competing or even deterring market penetration. Thus, they may damage the process of competition as a whole. ‘’

The following text indicates about the danger of competition which leads to monopoly.Competition within the marketplace for merchandise associated services is crucial for the healthy growth of an economy. Consumers protection made by setting minimum quality specifications and safety compliances for each product and services and by establishing mechanism to redress their grievances. The target is to make sure the presence of enough numbers of producers within the market, wherever nobody will attain a foothold of dominance. A competitive market fosters investment in associate economy and conjointly helps the shoppers through maintaining a good worth within the market. Thus for the protection and securing the global market and inside trading Bangladesh established laws relating to it, though they are not fully occupied in nature but those are binding for securing the competition. Such as Competition Act 2012, Bangladesh Investment Development Authority (BIDA) Act 2016 etc.Section 15, 16 of the Competition Act prohibits the monopolies and other actions as follows:

  • Anti competition agreement- (1) No person shall enter into any agreement or collusion, express or implied, in respect of production, supply, distribution, storage or acquisition which causes or is likely to cause an adverse affect on competition or creates monopoly or oligopoly in the market.
  • Abuse of dominant position.- (1) No enterprise shall abuse its dominant position.[1]

2.1 Competition Law and Commission:

In 2012, the Competition Act was enacted in Bangladesh. The Act is made to promote, ensure and sustain a congenial atmosphere for the competition in trade, and to prevent, control and eradicate collusion, monopoly and oligopoly, combination or abuse of dominant position or activities adverse to the competition. There are 46 sections in the Act. To achieve the objectives of the Act, the Government of Bangladesh has already established the Bangladesh Competition Commission under the provisions of the Act.

2.2Body and Functions:

In general, competition law has three main elements:

  • Prohibiting agreements or practices that restrict free trading and competition between businesses. This includes, in particular, the repression of free trade caused by cartels.
  • Banning abusive behavior by a company dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal, and many others.
  • Supervising the mergers and acquisitions of large corporations, including some joint ventures.

2.3Competition Commission:

The Commission consists of one chairperson and four members.

The goal of the Competition Commission is to create equality in the market by fostering sustainable competition in the economy, ensuring consumer interest and best practice in the market.The vision of the Commission is to make the market competitive through advocacy, engagement and enforcement of the law resulting congenial business environment.

2.4Functions:

The functions of the Commission are as follows:

  1. To eliminate practices having an adverse effect on competition in the market, to promote and to sustain competition and to ensure freedom of trade;
  2. To inquire into, either on receipt of any complaint or on its own initiative. All anti-competition agreements, dominant position and practice of the enterprises;
  3. To inquire into other offences specified under this Act and to sue and conduct them accordingly;
  4. To make rules, policy, instructions of notifications or administrative directions relating to competition, and to give advice and to assist the Government for implementation thereof;
  5. To take the necessary plan of actions for developing awareness among the people about the matters relating to competition by way of dissemination, publication and any other means;
  6. To develop mass awareness by way of conducting research, seminar, symposium, workshop and other similar means about the anti-competition agreement and activities and to publish and disseminate the result of such research and to give recommendations to the Government for their effective implementation.
  7. To implement, follow or consider any matter relating to competition sent by the Government; and
  8. To review the actions taken under any other law for consumer rights protection and implementation.

The competition law in its present format is relatively new in Bangladesh but the Commission is already nearing completion of its capacity building stage. The Commission is at this stage focused on its primary goal, namely, creating awareness of the law through targeted outreach to business communities. The time has arrived for large and medium enterprises in Bangladesh to educate them about the law and adopt means as to how to comply with it, for it is only a matter of time before the Commission will be operating in its full strength and more and more complaints would be lodged. [2]

Chapter 3 

Problems in the market place

3.1 Lacking’s in Effective Legal Provision:

There is no effective legal provision designed to safeguard the interest of the consumers in Bangladesh. Besides, there’s no legal entity to supervise the commerce practices of business corporations. These tasks area unit sophisticated. On the one hand, it must be ensured that buyers aren’t cheated, and on the opposite hand special care ought to be taken in order that non-public corporations and business don’t feel regulative powers area unit excessive.Overseeing commerce practices will need data concerning market structure, product quality, and in particular technical experience. Some of businesses might concern of gaining unfair competitive edge by deceptive claims about their products worth, quality, place of origin and ingredients so as to promote sells. Checking these info for individual shoppers is very tough and in most cases not possible. Therefore, during this era of commercialization protective consumers’ interest would require way more than enacting laws. however the principles of the sport are enforced – is that the most vital issue at stake.

3.2 Lacking’s in Effective Consumers Association:

Unlike all other countries of the world strong political protection in the economy is valuable in creating a suitable competition regime inside Bangladesh. By business organizations, chambers and with the connections from the politicians and bureaucrats, those are the firms or companies or producers who promote the interest in business to promulgate the trading. In present concept, the consumers don’t seem to be unionized in the least and because of lack of an efficient association they cannot play any role in promoting their own interest. Civil society teams working on behalf of the consumers and virtually non-existent in the country. the present consumers Association of Bangladesh (CAB), has not been significantly very effective in raising the issues of the consumers. As a result, policy manufacturers most frequently see strong lobbying in favour of demands for cover, they hardly encounter with widespread public demands for not grating those protecting measures. Therefore, a good competition regime ought to focus on developing consumers’ associations in order that debates and discussions will turn up between opposing views. this may generate vital info for the policy manufacturers and facilitate them decide.

3.3 Monopolies:

Natural monopolies are the sectors wherever government has a vital role to play. however in Bangladesh sectors like railways, telephone, and different public-service corporation services have generated such anti-competitive structures that not solely inhibits modernization of those services however additionally hinder personal investment into these sectors. whereas in recent times personal sector has entered into the business of telephone, competition has been restricted to a couple of corporations solely. This permits the state in hand BTTB (or Bangladesh Telegraph and telephone Board) to continue inefficiently. Solely very recently a regulative commission has been got wind of for the phone sector. However, it’s still in infancy and nevertheless to acquire any teeth. Within the natural monopolies public-private sector collaboration will facilitate improve the quality of services. This lead to enlarged competition as private sector corporations are going to be concerned and consequently consumer will like improved merchandise and services at low value.

3.4 Framework Hindrance:

A number of regulative frameworks additionally act as hindrance to the promotion of an efficient and competitive market mechanism in Bangladesh.First of all, transparency and fairness lie at the center of the competition policy and also the rule of the law regarding them should be enforced comparatively quickly. As a result, an autonomous and free, and effective and efficient system is one amongst the foremost essential parts for guaranteeing favorable business climate for competition. Investors get entangled into activities that need hiring work force, getting land, securing assets, protective private property and imposing contracts. Undeveloped and inefficient legal, commercial, and regulative frameworks cut back probabilities for fairness and justice that discourage competition by raising dealing prices of doing business. presently the country’s system is burdened with over half a million cases. Such a slow and inefficient judicature will increase the costs of legal proceeding. If the judicial system cannot guarantee property rights and enforce contracts quickly, competitive atmosphere is seriously affected undermining the interest of the consumers.

Chapter 4

Conclusion

4.1 Findings:

  • The Competition Act only deals with combinations which can cause adverse impact on competition in the market place but doesn’t specify the standards that should be followed by BCC in order determining it is unclear.
  • The market place in Bangladesh is that prominent companies are already having possession and creates monopoly business and rule over the market penetration
  • The existing frameworks are not effective and its not enough in nature.

4.2 Recommendations:

  • Bangladesh need to adopt an effective nationalistic competition policy in accordance with the competition law
  • The Policy should be made by discretionary power by the Government and it should be made in sector-wise.
  • If there is need to follow the foreign policies it should be followed in accordance with the frameworks.
  • There should be steps which will take down monopolies among the companies which will lead to danger in the market place.
  • Awareness need to be made among the stakeholders and formulate protection to consumers in the market place.
  • There should be no unfair trading and practices.

 4.3 Concluding Remarks:

Despite important reforms within the domestic economy, Bangladesh still possesses rathera weak competition regime. This obstructs the potency gains within the domestic economy. Moreover, weak competition regime implies that the interest of the consumers is completely unmarked. fixing of a good regime during this regard can stay a difficult task for Bangladesh, which might need amongst others: legal and regulative reforms, implementation of rule of law, development of civil society cluster protective the consumers’ interest, and, above all, more deregulating and alleviation of the domestic economy. However, there’s additionally a danger of excessive competition, which can have adverse socio-economic implication. There is, therefore, a requirement for open public speaking on these problems and continuous observance of the impact of competition on the weaker sections of the economy (particularly on SMEs). at the same time, there’s would like for realistic assessment of the extent to that MNCs ar following the disciplines of competition law. Indeed, democratic governance ought to even be at the guts of any move to manage competition. In fact, the govt. ought to undertake measures to considerably improve company (both native and multinational) governance, increase company transparency, forestall fraud and guarantee corporate social responsibility. the world Bank and United Nations agency policies ought to strengthen instead of undermine the power of Bangladesh government to undertake measures to control investment and corporate governance so a more healthy competition regime develops in Bangladesh. Another thing is all industrial companies are needed to be registered under BIDA where is necessary for acquire licenses and other papers for import and export certificates of registrations and BIDA should function according to its missions and strategy.

 4.4Bibliography:

1.Legislations:

Competition Act 2012

Bangladesh Investment Development Authority Act 2016

2.Books,Journals:

Noor, M.A., Review Of Some Key Laws Affecting Directs Foreign Investment In Bangladesh With Recommendation For Changes Therein (1994)

  1. Khan, Barrister Omar, “Competition Law In Bangladesh Analyzing The Growth And Future Prospects – Law & Justice”, The Daily Observer(Webpage, 2019) <https://www.observerbd.com/details.php?id=184845>

Competitiveness Environment In Bangladesh 2002 And 2002 (CPD, 2002)

[1]Competition Act 2012.

[2]Barrister Omar H. Khan, “Competition Law In Bangladesh Analyzing The Growth And Future Prospects – Law & Justice”, The Daily Observer (Webpage, 2019) <https://www.observerbd.com/details.php?id=184845>.

Prepared by : Md. Gaffer Rahman

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