Competition Commission has a long way to go

The announcement of establishing a competition commission years ago did inspire hope among sections of conscious citizens that the move, a timely one, would help strengthen market efficiency while protecting consumers from the machinations of business cartels and the like. The government's initiative was appreciated but with a note of warning about meticulous preparations required to get along with the task ahead.
It has been quite a while. There is, in effect, no mentionable progress so far, except that the government has appointed the chairman of the commission and a few key officials. There is, reportedly, no organogram as yet to recruit officials and required support staff. The funds made available to run the organisation is also meagre. These are clear indications to suggest a lack of understanding of the importance of an entity that, if equipped properly, can bring about order and discipline in market forces, much to the relief of the consumers.
The very idea of enacting competition law and setting up a commission is one and the same across the globe in that the purpose is to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the marketplace. While curbing syndicated monopoly in times of sudden fluctuation in prices of commodities is a mandated activity of the Competition Commissions all over the world, the main tools required are human and related resources to effectively control the situation. It is here that the Commission has to assume the role of a watchdog.
The Commission is also required to give opinion on competition issues received from other agencies established under law and to undertake competition advocacy, create public awareness and impart training on competition issues. The Indian Supreme Court in response to a civil appeal in 2010 clearly spelt out the role and functions of the Competition Commission in India that may be applicable in most countries, including ours. According to the judgment, the main objective is "to promote economic efficiency using competition as one of the means of assisting the creation of market responsive to consumer needs and preferences. The advantages of perfect competition are three-fold: allocative efficiency which ensures the effective allocation of resources, productive efficiency which ensures that costs of production are kept at a minimum, and dynamic efficiency which promotes innovative practices."
Bangladesh government enacted the Competition Act 2012 in June 2012 providing for the establishment of the commission as a statutory body with powers similar to those of the civil courts in the country. It did take a long time to finally get the draft bill made into a law. The need for the law was more than ordinary. In the present day globalised market economy, due to limitations of governments to prevail upon market practices with regulatory instruments, competition law is one of the most preferred measures to restrict unfair business practices while at the same time improve production and pricing efficiency. In Bangladesh, during the past two decades or so, flagrant violation of basic business ethics by cartels, notorious syndicates, hoarders, black marketeers and so on have plagued the marketplace with serious distortions that more than necessitated a legally recognised system to tackle the situation. It is sad that since the passage of the law more than ten years back, the government is yet to make the commission visible. Needless to say, an Act or a policy is no more than an expression of intent, and to make it functional, it has to be worked on through appropriate execution mechanism.
For its functional purposes, the Commission will be required to frame rules, policies, administrative decisions and set up mechanisms for conducting enquiries on receipt of complaints, devise procedures for preliminary determination of anti-competitive behaviour and take penal action upon final and conclusive determination through public hearing or whatever is deemed appropriate. The job is challenging in as much as it entails understanding and pre-empting market conditions under different circumstances – domestic as well as global - and the way they tell upon consumers on the one hand and on the market players, on the other.
This calls for, besides effective market monitoring, developing and nurturing relations and interactions with sectoral regulators to ensure smooth alignment of regulatory laws in strict conformity with the competition law. In pursuing the path, a commission can be expected to perform competition advocacy and spread information on benefits of competition among all stakeholders to establish and nurture healthy competition culture in the economy.
The role of the commission in Bangladesh is critical in dealing with the essential consumer goods. The commission should develop a database, regularly monitor the dominant market players' operations, examine the market control and manipulation (if any), and take proper measures. The commission should also adopt a strong stance against cartels and a zero tolerance policy towards collusive practices. The Competition Act 2012 should be revised to directly address monopolies and include specific anti-trust clauses, along with concrete penalties for violators. Efficient market management through close monitoring and supervision will be critical to keep the commodity prices under control.
It appears that the government is yet to firm up its commitment towards a functional Competition Commission. Although it takes a lot to do so, shying away does not help. The concerned authorities need to sit up.

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