THE introduction of the Competition Order 2015 aims to encourage a fair and healthy market place in Brunei. It is an important cornerstone moving towards growth, enhanced productivity and innovation among businesses. This is in line with the Brunei Vision 2035, to achieve a dynamic and sustainable economy.
Effective competition between businesses can bring benefits to consumers including greater choice, improved product quality, and lower prices. In this context, businesses and government are also consumers.
Officials from the Competition and Consumer Affairs Department (CCAD), Department of Economic Planning and Development (JPKE), Prime Minister’s Office highlighted this in an engagement session with the Chinese Chamber of Commerce and the business community.
The socialisation session was part of a continuous effort, conducted in collaboration with Darussalam Enterprise (DARe), to create awareness on the benefits and the key prohibitions of the Order and to encourage business compliance when the law is enforced.
The Competition Order 2015 forbids businesses from anti-competitive conducts, which could potentially produce harmful effects to consumers. The three major prohibitions are (i) Anti-Competitive Agreements also known as cartels; (ii) Abuse of Dominant Position; and (iii) Anti-Competitive merger.
The first key prohibition is anti-competitive agreements which refer to agreements made between or among businesses that prevent or restrict competition in the market. There are four specific conducts which are per se illegal under this prohibition: price fixing, market sharing, supply control and bid rigging.
Price fixing occurs when agreements are made by two or more businesses to fix the prices, instead of offering the best value for money independently to compete for consumers. While bid rigging happens when businesses collude in tenders by manipulating the process through predetermination of the winning bidder.
The CCAD also underscored the importance for businesses to be aware of some conducts which may appear to be harmless, however, may raise concerns under the Competition Order 2015.
These conducts are such as facilitating price discussion or exchanging sensitive market information by trade or professional associations. The session highlighted the importance of businesses to make independent decisions without entering into agreements with other players to fix price or limit supply of goods or services.
Real cases drawn from the region and a list of ‘Dos and Don’ts’ were also shared to help the business community in understanding the application of the law.
Touching on the second key prohibition, Abuse of Dominant Position, which will be phased in much later, it was highlighted that being dominant in a market is not an offence.
The Order however prohibits a dominant player in the market to abuse that position through anti-competitive behaviours such as limiting supply, predatory pricing or exclusionary dealings, which may harm other players in the market.
The third prohibition on anti-competitive mergers deters mergers which may result in substantial reduction in competition in the market.
The CCAD shared that preparatory work is ongoing including helping businesses and key stakeholders in understanding the law, before the enforcement of the prohibitions in phases.
The focus will be on the first conduct, which is Anti-Competitive Agreements, as a starting point.
Businesses were also briefed on other key provisions of the Order, such as exclusions, enforcement authorities, powers to do investigations and penalties.
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