Competition Law Update: Formation of the Myanmar Competition Commission

Competition Law Update: Formation of the Myanmar Competition Commission

John Dick

John Dick

September 23, 2019 11:39 PM

The Myanmar Competition Commission (the Commission) was established pursuant to Notification 106/2018 dated 31 October 2018, and various members of the Commission were appointed. The Union Minister for Commerce will act as Chair of the Commission, and the Director General of the Department of Trade will be the Secretary of the Commission. They are supported by individuals from professional bodies (including lawyers, economists), as well as representatives from the Ministry of Industry, the Ministry of Home Affairs, the Ministry of Transport and Communication and the Union Attorney General’s Office. In line with the approach adopted in other countries, the Commission consists of members from professional bodies in addition to government officials.

This is a long awaited move towards the implementation and enforcement of the Myanmar Competition Law. The powers and duties of the Commission were prescribed by the Myanmar Competition Rules. We recap the Competition Law and the Rules below.

Myanmar Competition Law

To level the playing field amongst businesses and promote a culture of fair competition, the Pyidaungsu Hluttaw Law No. 9, 2015 (the Competition Law) was enacted in 24 February, 2015 and came into effect in February, 2017.

The objectives of the Competition Law are: (a) to prevent acts that injure public interests through monopolisation or manipulation of prices by any individual or group with intent to endanger fair competition in economic activities, for the purpose of development of the national economy, (b) to control unfair market competition on the internal or external trade and economic development, (c) to prevent the abuse of dominant market power, and (d) to control the restrictive agreements and arrangements among businesses.

The Competition Law also prohibits "unfair competition" conduct, which includes practices such as misleading consumers, disclosing trade secrets, intimidating other business persons and defaming the reputation of another business.

The Competition Law is also applicable to firms located outside Myanmar whose behaviour directly affects competition and consumers in domestic markets. The Competition Law’s merger control provisions are also applicable to foreign mergers.

The Competition Law prescribes a wide range of duties and powers for the Commission, from setting merger thresholds to overseeing the Investigation Committee. A comprehensive list is set out in Part V of the Competition Law, and includes:

    a. Scrutiny of mergers and acquisitions among businesses
    b. Exemption of essential industries and small and medium enterprises from compliance with the Competition Law;
    c. Determination of market share, supply, amount of capital, number of shares and magnitude of owned property relating to a business which are detrimental to competition due to dominance;
    d. Determination of threshold for a business to be deemed to be operating as a monopoly; and
    e. The power to direct businesses to reduce their market share to below the prescribed amount deemed by the Commission to be anti-competitive.

Myanmar Competition Rules

By Notification 50/2017 dated 9 October 2017, the Ministry of Commerce (MOC) issued the Competition Rules (the Rules), pursuant to Article 56(a) of the Competition Law, to provide guidance on the implementation of the Competition Law.

The Rules provided for the formation of the Commission and appointment of the Secretariat. The Rules also set out (a) the process for filing of complaints / whistleblowing and investigations for infringements; (b) duties and powers of the Commission, the Secretariat, the Investigatory Committee and other relevant bodies; and (c) penalties and punishments.

Moving Forward

With the regulatory body (the Commission) in place to implement and enforce the Competition Law and the Rules, businesses operating in Myanmar should take steps to ensure compliance. Employees should be aware of their obligations to comply with competition regulations and to refrain from anti-competitive behaviour – this applies in particular to those making pricing decisions.

Businesses with a large market share ought to be careful not to be seen to abuse their dominant market position. We would recommend that commercial arrangements (including horizontal and vertical agreements) be reviewed and scrutinised carefully to ensure compliance.

Businesses entering the Myanmar market must evaluate their pricing and branding/marketing strategies, and steer clear of any anti-competitive behaviour. Joint ventures or mergers / acquisitions need to be assessed carefully so as to avoid excessive market concentration that may be deemed to be monopoly behaviour. Further, trade associations must be cautious and avoid price level coordination, organising resources and any other anti-competitive behaviour.

The Myanmar government has taken significant steps to move forward along with other countries in developing anti-trust policies. This is an encouraging sign for investors – that the market is regulated to maintain healthy competition.

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