March 12, 2015
– The recently-passed Competition Law could shake up business methods, though it remains to be seen how effective it will be in practice.
Like similar laws in other jurisdictions, the object is to protect public interest from monopolistic acts, speculation in goods or services, unfair competition, abuse of a dominant position and economic concentration which weakens competition, according to a briefing note from legal advisory firm VDB Loi.
The Competition Law came into force on February 24, but had been worked on by several ministries and related industries since 2012.
VDB Loi’s note said parts of the act is based on an earlier competition law from Vietnam, though some parts differ significantly.
Economist U Hla Maung said the law limits some types of advertising and may add a level of bureaucracy that could stifle small business, which deviates from today’s democratic flavour.
The law requires enterprises in some cases to receive approval from a commission, opening the doors to delays and possible bribery, he said.
“A commission should help address the difficulties of businesspeople, not make it more rigid,” he said.
U Hla Maung added that simply adding more restrictions will not help the market grow.
Including more “authorised people” in the process will not create free and fair competition, while if the law is deficient, speculators may be able to take advantage,” he said.
Government officials said they were more optimistic about the law, saying it helps even the playing field between companies of different size and influence. It will act as an umbrella, with many notifications, rules and regulations coming later, which will define what is permissible in different sectors, said U Than Maung, member of parliament’s Commission for Assessment of Legal Affairs and Special Issues.
Although the government had officially launched a market economy 20 years, there were many stories of businesspeoples close relations with senior government officials creating fertile grounds for inside information, as well as possible bid rigging, monopolisation or closed sectors.
“We were not able to obstruct one company’s dominance in the market. While it was once easily to unfairly do business, now we must have laws that prevent this,” said U Than Maung.
He added it is important the current business environment does not follow a similar path.
“This is a new law, the first time we have had one in Myanmar on competition, so we should use it fairly instead of blaming each other,” he said.
The law also lays out penalties for transgressors. VDB Loi said the penalties are provided for “acts restricing competition”, adding violators may face three years in prison, and a fine of K15 million (US$14,700).
(Myanmar Times)