Unfair Trade Practices Conceptualisation Significance and Regional Perspectives

COMMENTS ON PRESENTATION • Definition of an Unfair Trade Practice • Relationship to Competition

DEFINITION OF AN UNFAIR TRADE PRACTICE? • UTP are fraudulent, deceptive or dishonest practices

RELATIONSHIP TO COMPETITION LAW • UTP are not and should not be a “basket

RELATIONSHIP TO COMPETITION LAW • Some UTP are addressed within a more general Competition

HARM TO CONSUMERS • Harm to competition is often measured as a harm to

IMPLICATIONS IN ASEAN COUNTRIES • Potential impact of UTP in ASEAN members: • •

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Unfair Trade Practices: Conceptualisation, Significance and Regional Perspectives March 11, 2011

COMMENTS ON PRESENTATION • Definition of an Unfair Trade Practice • Relationship to Competition Law • Harm to Consumers • Implications in ASEAN Countries 2

DEFINITION OF AN UNFAIR TRADE PRACTICE? • UTP are fraudulent, deceptive or dishonest practices between parties that often are not bargaining with each other in any normal sense. • UTP may occur directly between competitors, between businesses at different levels of a supply or production chain, or may directly target consumers. • UTP may involve the breach or misuse of another statute in order to obtain an “unfair” competitive advantage –e. g. abuse of intellectual property rights.

RELATIONSHIP TO COMPETITION LAW • UTP are not and should not be a “basket clause” to cover issues not explicitly addressed by Competition Law. • There are differing views of the goal of Competition Law, but, from my perspective, it is about protecting markets and competition as a whole – not specific competitors. • In contrast, UTP often focus on specific competitors without concern for effects on markets or on traditional metrics of competition such as price.

RELATIONSHIP TO COMPETITION LAW • Some UTP are addressed within a more general Competition Law: • • Overlaps with Abuses of Dominance, but UTP often includes actions by non-dominant competitors that may not otherwise infringe a Competition Law; Some Competition Laws include “fair competition” provisions or regulate specific conduct such as false advertising. • However UTP may also be addressed within consumer protection legislation or other statutes.

HARM TO CONSUMERS • Harm to competition is often measured as a harm to consumers in the form of artificial changes in price or other elements of competition. • A specific UTP may not result in any measurable harm to competition within a market or to consumers. • However widespread acceptance of such conduct would subvert the rules of a free competition established under Competition Law and other commercial statutes.

IMPLICATIONS IN ASEAN COUNTRIES • Potential impact of UTP in ASEAN members: • • • Many ASEAN members are developing economies or economies still transitioning to free market economies; Many ASEAN members have not fully developed or implemented the legal framework to ensure free market competition; Numerous factors may exacerbate effects of UTP that may have particular relevance in some ASEAN members including: • • Insufficient enforcement or lack of commercial legal framework; Corruption; Lack of available relevant information for consumers and businesses; Potential inability of small local businesses to defend against UTP.