The competition law
Monday, 12 March 2012
It is heartening to note that the government has finally placed a bill in parliament on Wednesday last to enact a piece of legislation, called the competition law. The main objective of the law, if and when passed, will be to encourage healthy competition in trade and business and help stop unscrupulous business activities that, in most cases, are aimed at cheating the consumers and controlling markets through means -- fair or foul.
Both businesses, barring the unscrupulous ones, and consumers feel rather strongly that there should be a competitive business environment for their mutual benefit. But such an environment has yet to be created. Reasons are many for this lapse, the main one being the absence of strong consumers' rights movement and the lack of government's sincere efforts to that end. The government, however, has a key role to play in ensuring competition in the market through the adoption of an appropriate competition policy and its proper enforcement.
The basic objectives of a well-designed competition or antitrust law are promotion of healthy competition in the market and enhancement of consumer welfare through prevention of overt or covert deals and activities that distort competition. But the million dollar question that would obviously agitate the minds of many: will any competition law work in Bangladesh? There are ample reasons for one to be sceptical about the prospect of enforcement of such a law in this country.
The major reasons that generally give rise to pessimism include the weak and haphazard overall policy framework that promotes inefficiency, non-transparency, corruption etc. The performance of regulators and institutions that are mandated to uphold justice, fairness and transparency has not been satisfactory and the people are increasingly losing their faith in the ability of the institutions in particular. Similarly, the government, on most occasions, does not do what is right for ensuring fair competition in the market and protecting the consumers' welfare.
For instance, the government in the recent past adopted a law to protect consumers' rights and created an entity for the purpose. But the consumers are still being subjected to all sorts of raw deals by unscrupulous traders and service providers. Not many consumers are even aware of the existence of any government entity tasked to protect their rights. While regulatory entities fail to assert themselves either for their own weaknesses or outside interference, the government, for unexplained reasons, tend to demonstrate its unwillingness to act against the violators of the laws of the land and protect the interest of the consumers.
One glaring example of the government's indifference to fair business practice and consumers' interest is its inability to effectively introduce distribution system, replacing the age-old delivery order (DO) system, for some essential items such as edible oil and sugar. The government itself described the DO system as anti-competitive and manipulative while introducing the distribution system. But due to the lack of enforcement of the latter, the unscrupulous refiners and wholesalers are having a field day. So, formulation of a policy or enactment of a law does not necessarily mean anything substantive. Issues such as enforcement of the policy or law concerned, overall regulatory environment, economic management and quality of governance are very important. This will be true also in the case of the proposed competition law.
Both businesses, barring the unscrupulous ones, and consumers feel rather strongly that there should be a competitive business environment for their mutual benefit. But such an environment has yet to be created. Reasons are many for this lapse, the main one being the absence of strong consumers' rights movement and the lack of government's sincere efforts to that end. The government, however, has a key role to play in ensuring competition in the market through the adoption of an appropriate competition policy and its proper enforcement.
The basic objectives of a well-designed competition or antitrust law are promotion of healthy competition in the market and enhancement of consumer welfare through prevention of overt or covert deals and activities that distort competition. But the million dollar question that would obviously agitate the minds of many: will any competition law work in Bangladesh? There are ample reasons for one to be sceptical about the prospect of enforcement of such a law in this country.
The major reasons that generally give rise to pessimism include the weak and haphazard overall policy framework that promotes inefficiency, non-transparency, corruption etc. The performance of regulators and institutions that are mandated to uphold justice, fairness and transparency has not been satisfactory and the people are increasingly losing their faith in the ability of the institutions in particular. Similarly, the government, on most occasions, does not do what is right for ensuring fair competition in the market and protecting the consumers' welfare.
For instance, the government in the recent past adopted a law to protect consumers' rights and created an entity for the purpose. But the consumers are still being subjected to all sorts of raw deals by unscrupulous traders and service providers. Not many consumers are even aware of the existence of any government entity tasked to protect their rights. While regulatory entities fail to assert themselves either for their own weaknesses or outside interference, the government, for unexplained reasons, tend to demonstrate its unwillingness to act against the violators of the laws of the land and protect the interest of the consumers.
One glaring example of the government's indifference to fair business practice and consumers' interest is its inability to effectively introduce distribution system, replacing the age-old delivery order (DO) system, for some essential items such as edible oil and sugar. The government itself described the DO system as anti-competitive and manipulative while introducing the distribution system. But due to the lack of enforcement of the latter, the unscrupulous refiners and wholesalers are having a field day. So, formulation of a policy or enactment of a law does not necessarily mean anything substantive. Issues such as enforcement of the policy or law concerned, overall regulatory environment, economic management and quality of governance are very important. This will be true also in the case of the proposed competition law.