Thursday, September 24, 2020

Competition law has become vital

There are moves in Government, specifically at the Ministry of Trade and Investment to come up with a Competition Law.

This is a welcome move which, we are sorry to say, is long overdue.
Fair Competition is an integral component of modern day business.

A breach of fair competition, or anything to hinder it, is a serious crime in such jurisdictions like the United States and, of course, the European Union.

In the two named places, Competition, or the Antitrust Law, as it is sometimes called, is actively guarded, for the sake of the consumer and in the interest of fair business by such instruments as the Competition Commission or Competition Tribunal.
These are serious, quasi-judicial bodies, manned by business and trade experts with assistance from professionals like lawyers, negotiators, etc.

It, therefore, is very clear that Competition Law is important for a variety of reasons.

First, it is meant to regulate such business transactions as mergers and acquisitions.

When unregulated, the tendency is always that some players use their strength and dominance to abuse the consumer in the full knowledge that there is not much scope for choice.
When unregulated, and when there is not sufficient competition, businesses often give in to the temptation of collusion, which often manifests itself in price fixing.

As it has so often happened elsewhere, left to their own ways, businesses often implement every trick in the book to shut out new entrants into the market.

Such restrictive practices by dominant players in whatever economic sector can never be good for the consumer.
They can also never be good in the nation’s economic ideals as those we set for ourselves because by undermining competition, they also undermine the opportunities for the country to realize its full potential.

While we state for the record that the Ministry of Trade is doing something in moving towards coming up with a Competition Law, we note with concern the slow pace at which this important piece of legislation is being crafted.
For the record, it is important to differentiate between Competition Policy and Competition Law.
Law is much more powerful and prescriptive in its application than a policy.

The reason why we are raising the issue of Competition Law is that there are undercurrents in our economy of ills that can only be resolved by the advent of Competition Law.

Some enterprises have become so influential almost to an extent where they are now fast turning into virtual monopolies.

That is dangerous.

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