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Competition Law In Fiji

The Fijian Competition and Consumer Commission (“FCCC”) has been established under Section 7 of the Fijian Competition and Consumer Commission Act 2010 (“FCCC Act 2010”). The provisions of Competition and
27 Dec 2017 10:46
Competition Law In Fiji

The Fijian Competition and Consumer Commission (“FCCC”) has been established under Section 7 of the Fijian Competition and Consumer Commission Act 2010 (“FCCC Act 2010”).

The provisions of Competition and Consumer Law in Fiji are covered under Part 3, 4, 6, 7, 8 and 9 of the FCCC Act 2010.

Part 6 of FCCC Act 2010 :-

The Fijian Competition and Consumer Commission deals with all the competition matters under Part six (6) of FCCC Act 2010. The Part six (6) of FCCC Act is know as “Restrictive Trade Practices”.

This part of the Act out line the provisions which are classified as “Restrictive Trade Practices”.

Misuse of Market Power and its Impact!

When corporation misuse its market power, they tend to engage in prohibited conducts which are not allowed under the FCCC Act 2010.

The FCCC in earlier article has talked about the effects of misuse of market power on the competition, the consumer and the economy as a whole.

This article further elaborates on the impacts of misuse of market power and the what constitutes the the market power.

It is apparent that when corporations has market power, during some stage of operation, they tend to abuse their market power by misusing them.

It is also important to note that when corporation has market power, they tend to have dominance in market, and when such dominance is a abused, it has detrimental effects.

Prohibited Conducts

Should a corporation has dominance in a market, the corporation is prohibited from engaging in the following conducts:

1. Price Fixing: this happened where the dominance corporation undertakes these kind of activites in order to eliminate price competition for its per se competitior.

Sometimes, such corporations also follow such route in order to eliminate entry of any potential competitior into the market. When corporations engage in such conduct of price fixing, there are suggestive indicators that the market players have formed cartel.

2. Allocating Markets: the dominance player can decide to allocate geographic territories or type of goods or customers among themselves, and to avoid competing with each other in the areas to allow each player opportunities to enjoy super normal profits.

This is known as marketing allocating agreements.

This agreement between two or more players to allocate market is a very serious anti-competitive practice and may have greater impact.

3. Limiting Outputs: Dominance player may dictate terms of supply by limiting the putput they produce or supply into a market, so as to cause some artificial shortages of the goods or services, resulting in excess demand for the product and opportunities to raise prices.

4. Tie-in Agreements: the dominance supplier sells a product (tying product) which is dependent on the purchase of some other product, usually a slow moving product (tied product).

This tie-in arrangement is such that even if the customer does not want to buy the tied product, he has to buy it in order to get the desired product.

5. Refusal to Deal: the dominance firm dictates, whom to sell and whom not to sell goods or services. In other words, they refuse to deal with any third party, normally a competitior.

Though this may be ssen as a fair marketing strategy for optimum profit, sometimes such practices may reduce competition in the market and consequently could be restrictive in nature.

FCCC’s Advice!

Businesses must not engage in the above highlighted which are prohibited under the FCCC Act 2010.

By engaging in such prohibited conducts, the markets for the goods and services would be distorted and this would severly affect the competition, the Fijian consumers and the economy as a whole.

It is imperative that business understand the benefits of healthy competition in the Fijian market.

The existence of competition in Fijian market place would keep the businesses competing for consumers to purchase the good and services at a reasonable affordable prices.

Feedback:  monica.aguilar@fijisun.com.fj

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