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Provisions of Competition Law in Fiji

What is Competition Law? Competition law serves as a legal framework that promotes or seeks to maintain healthy competition in the Fijian Markets by regulating anti-competitive conduct by any trader
28 Aug 2017 09:35
Provisions of Competition Law in Fiji

What is Competition Law?

Competition law serves as a legal framework that promotes or seeks to maintain healthy competition in the Fijian Markets by regulating anti-competitive conduct by any trader or person involved in selling either goods and/or services.

Competition law is implemented through public and private enforcement. Various jurisdictions have different references about competition law.

In the United States, it is known as ‘Anti-trust Law’, European Union, ‘Competition Law’, in Rusia and China the ‘Anti-monopoly Law’ –etc.

Historically, competition dates back to the Roman Empire and evolved over the years until it became global around the 20th century.

National competition law normally does not cover business activity beyond its territorial boundaries of national states.

However, in some, it is extraterritorial in nature based on the so-called effects doctrine.

International competition protection is governed by international competitional competition agreements such as the ‘General Agreement on Tariffs and Trade’ (GATT) in 1947.

Limited international competition obligations were proposed within the Charter for an International Trade Organisation.

These obligations were not included in GATT, but in 1994, with the conclusion of the Uruguay Round of GATT Multilateral Negotiations, the World Trade Organisation (WTO) was created.

 

Competition Law in Fiji.

Before the introduction of the Fijian Government’s export-led growth policy, the economy was managed through the issue of licences, quotas and price controls.

Government public utilities and government owned companies became heavily sheltered from competition.

The export-led growth policy supported the removal of barriers to trade, and promoted competition, in order to stimulate economic efficiency and raise competitiveness. As such, consumer and a limited competition issues in Fiji gained recognition with the enactment Fair Trading Decree 1992.

This legislation basically identifies and regulates anti-competitive trade conducts.

In 1998, it was complimented with the introduction of the Commerce Act whose objective is to regulate industries that are deemed to have monopoly or near monopoly status including certain public enterprises that controls major infrastructure, in terms of access regimes.

Recognising that rules on competition are required if dynamic, efficient, fair and competitive markets are to be developed on Fiji islands towards enhancing the Fijian people’s welfare.

 

Government has introduced several competition-related legislations, most notably are:

  • The Public Enterprise Act, (1996);
  • The Commerce Act, (1998);
  • The Fair Trading Decree (1992) and the Fair Trading (Amendment) Act, (1998); and
  • Fijian Competition and Consumer Commission Act 2010.

 

Currently FCCC is the sole competition regulator in the Fijian economy in accordance with the provisions of the FCCCA2010.

Part 6 of the FCCCA2010 contains provisions relating to anti-competitive trade conducts and some major ones include –

  • Section 60 – Renders unenforceable any provisions of any Contracts, arrangements or understandings that has the effect to substantially lessens competition.

For example, if Company C is the owner of a service accessed by Company D and E and enters into a contract with Company C and in their contract have a provision which says “Company D is entitled to 70% of the services offered by Company C”.

 

This provision can be deemed unenforceable if it is going to substantially affect the ability of Company E to compete with and D;

 

  • Section 61- Prohibits the provision of any contracts, arrangements and understandings that restricts of prices, discounts, rebates that has the effect to substantially lessens competition.

For example – If Company A is the sole distributor of cheese in Fiji and Company X and Y are two supermarkets in competition in the retail market.

Then Company A enters into a contract with Company X in which a provision states: “Our Company will provide a discount of 5% to your Company only for all purchases of 100 cartons and above”.

 

This provision can be deemed unenforceable if it is going to substantially affect Company Y’s position in the retail of cheese;

 

  • Section 66 – Misuse of market power – For example: If Companies F, G,H,and T trade in Kava in Fiji and their market share is as follows-

 

  • Company F – 10%;
  • Company G – 10%
  • Company H – 60% and
  • Company T – 20%

 

Say, if the normal price of 1 kilogram of Kava is $100 per kg and Company H feels that it will drop the price to $75 per kg.

For two weeks Company H engages with same price that it causes Company G and F to substantially suffered and closed operation. After that it increases the price to $100 per kg.

 

  • Section 69 – Exclusive dealing – For example: If Company R is the supplier of school uniform for a particular school in Suva and enters into a contract with the Committee of that school that no student will be allowed to wear a uniform bought from any other shop.

In this case both the Company and the school committee are deemed to have engaged in exclusive dealing and may become liable for legal action under this section.

 

Other Sections include –

  • Section 68 – Collective tendering
  • Section 70. Resale price maintenance
  • Section 70A. Resale price maintenance in relation to services
  • Section 70B. Evidentiary provisions
  • Section 71. Price discrimination
  • Section 72. Mergers

 

Members of the public or businesses are at liberty to consult FCCC for more details on 3372178 or 8921991 in regards to the applications of the other sections listed above.

 

Advice from FCCC

To all businesses engaged in trade and commerce in our Fijian market, you will need to consult FCCC before entering into any contract with another business for the supply of goods and services.

It is advisable to flag your draft contract across to FCCC for checking to ensure that it does not contain any clause that might be in breach of the FCCC Act 2010.

Further, if you are in a market and two players therein are engaging in any of the conducts highlighted above, please report it to the Commission.

Should such conducts be allowed, businesses and consumers will be deprived of benefits of competition and subsequently affects the general welfare of all Fijians.

 



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