Insight

Myanmar Competition Law Update

Myanmar Competition Law Update

Gerald Singham

Gerald Singham

September 23, 2019 11:04 PM

Since the Competition Commission’s establishment pursuant to MOC Notification No. 106/2018 dated 31 October 2018 and the recent announcement of the 11 members, there has been much anticipation on the implementation of the Competition Law and the effects it brings on businesses operating in Myanmar. Stakeholders in the business community are looking out for updates, and are concerned about how these new regulations will affect them. Recent developments, such as the liberalisation of the alcohol import sector, appear to hint at a possible implementation of the Competition Law.

Composition of the Competition Commission

The Competition Commission consists of both civil service personnel and non-government personnel.

The Commission has a balanced composition of representatives – government officers from relevant ministries, legal experts and an economist. Like the anti-trust regulatory bodies in the region (Vietnam, Malaysia and Australia), the Myanmar Competition Commission consists of members from the government sector.

The main objective of the Commission is to protect consumer and public interest in line with the country’s aim to promote trade and other economic activities.

Clarifications on the Competition Law

The Competition Law adopts a fairly balanced approach. The usual exemptions (such as research and development, ensuring uniformity and consistency in certain markets etc.) are included in the provisions. Protection of small medium enterprises in the form of exemptions have been specifically catered for. Mechanisms for leniency and recourse to appeal against the findings of the investigation committee have also been set out in the Competition Rules.

There remains concerns amongst the investor community on the specific ambit and effect of the Competition Law. Common questions raised in relation to the enforcement of the Competition Law include:

  1. Insofar as the Competition law prohibits collaboration which results in market dominance and abuse of dominance, what is the definition of “dominance”, and will the commission be setting a threshold?
  2. What is the threshold for “market share specified by the Commission” such that collaboration will be restricted under the Competition Law?
  3. Will enforcement be retrospective?

The definition of “dominance” and the threshold for “market share” will vary depending on the industry and specific sector or trade activity. We understand that the Commission plans to undertake an in-depth review of each individual industry and specific sectors and take into consideration the nature of business activities in each industry and sector before arriving at any conclusion on definitions or thresholds.

It is also possible that specific industries or sectors have their own regulations restricting and prohibiting anti-competitive behaviour. One such example is the telecommunications sector. It is generally not ideal to adopt a one size fits all approach for anti-trust regulations, given that some industries and trade sectors have unique characteristics – e.g. sharing of oil and gas pipeline in the O&G sector.

It is highly unlikely that retrospective enforcement will be carried out, given that retrospective enforcement of laws is generally not permitted under the Constitution.

Conclusion

The role of the Competition is crucial, and their task is not an easy one. Investors can be assured that the Commission will take into account the nature of specific industries and sectors and factors such as the development stage of the market as well as the advancement of technology, research and development when setting implementation guidelines. The Commission is working towards maintaining a healthy market conducive for investors and fair to consumers.

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