Competition law and policy: Examples from ASEAN

In the ASEAN region, the first competition laws were introduced in 1999 in Indonesia and Thailand, with Singapore and Viet Nam following in 2004. Further impetus for introducing competition law and policy was provided in the ASEAN Economic Community (AEC) Blueprint 2008-2015.¹²² The overall vision included creating a ‘competitive economic region’, which included a commitment by the ASEAN Member States (AMS) to endeavour to introduce competition laws before establishing the AEC in 2015 (paragraph 41, ASEAN 2008).  All AMS achieved this except for Cambodia, whose law is expected to pass in 2021. The AEC Blueprint 2016-2025 recognised that for ASEAN to be regarded as a competitive region, its competition laws and policies must be operational and effective (para 26, ASEAN 2016). Five strategic measures provide the direction for further developing competition law and policy in the region (para 27).

In 2007, the ASEAN Economic Ministers (AEM) endorsed the establishment of the ASEAN Experts Group on Competition (AEGC). The AEGC is a regional forum comprising representatives of the AMS competition agencies or relevant ministries that allows discussion and cooperation on competition policy and law. The work of the AEGC is supported by the Competition, Consumer Protection and IPR Division (CCPID) of the ASEAN Secretariat. The ASEAN Competition Action Plan 2015-2025 (ACAP) was adopted in 2015 to guide the work of the AEGC. Following its scheduled mid-term review, a revised ACAP and implementation plan is currently being finalised.

The competition agencies in most ASEAN jurisdictions have a clear mandate to provide policy advice to the government¹²³. However, the position is less clearly outlined in the laws in Myanmar and Viet Nam. This mandate is vital in the context of understanding how competition agencies can assist in guiding future policy direction for recovery from the Covid-19 pandemic.

It is common for competition laws to include stated policy objectives, which is also the case in the ASEAN competition laws. The Regional Guidelines identify the most commonly indicated aim of competition policy to promote and protect the competitive process. It recognises that “the pursuit of fair or effective competition can contribute to improvements in economic efficiency, economic growth and development and consumer welfare’ (ASEAN Secretariat 2010, para 2.2.1).  Many of these concepts are directly incorporated into the AMS competition laws.

The Regional Guidelines also recognise that competition policy is beneficial to develop countries.  In addition to contributing to trade and investment policies, competition policy can accommodate broader economic and social objectives, including promoting and protecting small businesses (ASEAN Secretariat 2010, paras 2.2.2-2.2.3).

A review of the competition policy objectives of the AMS reveals consistent themes.  All of the laws recognise the importance of promoting and protecting competition, with many also referring to economic efficiency, economic growth and development, and consumer welfare.  Only two AMS directly reference small businesses.

Competition law and economic development
As noted, many of the competition laws of the AMS include ‘economic growth and development’ as a policy objective of the law, indicating that there is at least a theoretical belief that competition policy can assist in this goal. However, the position is far from clear, with a variety of different researchers taking contrasting positions. A study undertaken in 2002 concludes that the relationship between competition and economic development is “controversial both in economic theory and concerning empirical evidence”.¹²⁴

A more recent UNCTAD note finds that competition policy needs to be part of a broader mix of trade, economic, social and environmental policies to achieve sustainable and inclusive growth and development.¹²⁵ It recommends the development of a sound competition policy¹²⁶ which should be achieved through inclusive engagement with stakeholders, the identification of priority sectors relevant to the economy (particularly the poor), the potential for exemptions for certain sectors such as agriculture, complementarity with other policies (e.g. environmental), and ensuring fair (as well as free) competition (e.g. unfair business practices).  This latter point (unfair business practices) may be of particular importance in the context of recovery from the Covid-19 pandemic.  MSMEs may be at greater risk of being exposed to unfair business practices (e.g. abuse of bargaining power) when negotiating with strong market players that survived the various lockdowns.

Interface between competition and consumer law in ASEAN
The AEC Blueprint 2015 identifies the need for ASEAN to be a highly competitive economic region. It recognises that both competition policy and consumer protection policy are required to achieve this goal.  Actions to strengthen consumer protection laws and agencies across the ASEAN region are set out (paragraph 42). Building on the achievements of the 2015 AEC Blueprint, the AEC Blueprint 2025 recognises consumer protection as “an integral part of a modern, efficient, effective and fair marketplace” (paragraph 28), further linking competition and consumer policies together to achieve the desired ‘highly competitive economic region’.

In 2007, the AEM established the ASEAN Committee on Consumer Protection (ACCP). Like the AEGC, the ACCP is a regional forum comprising representatives of each AMS consumer protection agency, allowing discussion and cooperation on consumer protection.   The CCPID also supports the work of the ACCP. The ASEAN Strategic Action Plan for Consumer Protection 2025 provides further detail on the strategic measures set out in the Blueprint.  A Capacity Building Roadmap for Consumer Protection 2020-2025 has also been developed to guide the work of the ACCP.

To date, all ten AMS have consumer protection laws in operation. In many cases, the consumer protection laws and policies predate the competition laws.¹²⁷ Since the introduction of competition law, some AMS have combined the regulatory responsibility for competition and consumer law (Singapore and Viet Nam), while others consider this potential (e.g. Myanmar).