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A new era for competition law in the ASEAN region

Little more than 10 years ago, competition law and policy in the 10 countries that comprise the ASEAN region (Singapore, Malaysia, Thailand, Vietnam, Indonesia, Myanmar, Cambodia, Brunei, Lao PDR and the Philippines), was virtually non-existent. Indonesia, Vietnam and Thailand stood as the only jurisdictions with competition laws in place, and with the exception of a number of cases in Indonesia (primarily related to bid rigging), competition enforcement in the region was low.

The environment in 2015 is considerably different. Virtually all of the ASEAN jurisdictions (with the sole exception of Cambodia), have passed competition law – albeit that some laws are yet to come into force. Enforcement activities are on the increase, with Singapore tackling its first two international cartel cases in 2014, and cases already being heard by the Malaysian Competition Appeal Tribunal.

In 2016, Singapore will play host to the annual conference of the International Competition Network, bringing together competition authorities, practitioners and intellectuals from around the world, and no doubt the rise of competition law and policy in the region will receive due attention. Moreover, on 22 November 2015, ASEAN leaders entered into the Kuala Lumpur Declaration on the Establishment of an ASEAN Community, with the objective of creating economies that are vibrant, competitive and highly integrated.

Against this backdrop, it is timely for us to survey recent developments in the 10 ASEAN jurisdictions and provide a high-level road map for those trying to navigate the competition landscape within the region.

Singapore's competition regime is modelled on the system in the United Kingdom, with the main difference being that vertical agreements are exempted from the prohibition on anticompetitive agreements. Since the Singapore Competition Act (Cap.50B) took effect in 2006, the Competition Commission of Singapore ("CCS") has steadily established a bank of enforcement cases. The CCS issued its first abuse of dominance decision in 2010, and in 2014 issued two infringement decisions involving international cartels (in the areas of freight forwarding and the sale of aftermarket ball bearings).

Moving into 2016, the CCS is currently undertaking a public consultation in respect of proposed changes to a number of its guidelines, which outline the CCS's procedures and approach to the implementation of competition law in Singapore.

Brunei's competition law, which was passed in 2015 but is currently yet to come into force, appears very similar to the Singapore regime, and is understood to include a similar exemption for vertical agreements.

Malaysian competition law was introduced in 2012, and the Malaysian Competition Commission ("MyCC") has since established itself as an active enforcement agency. Most notably, the MyCC took action against Malaysian Airlines and Air Asia for entering into a market sharing arrangement, a decision which is currently subject to an appeal hearing. In relation to the law itself, the most notable feature of the Malaysian system is the absence of a prohibition on mergers that substantially lessen competition.

Indonesia's competition law is one of the more established in the region and has been actively enforced by the Komisi Pengawas Persaingan Usaha ("KPPU"). With that said, it is understood that the KPPU has been actively trying to strengthen its powers of investigation (which do not include the power to conduct unannounced searches). In this regard, it is understood that the KPPU has entered into memorandums of understanding with a number of government bodies such as the National Police Force and the Corruption Eradication Commission.

Following recent surges in food prices, various food commodities (including garlic, beef and soybean) have been of particular focus with regard to the KPPU's investigation activities.

Recent changes were introduced in Vietnam by way of Decree No. 71/2014/ND-CP, which essentially imposes stiffer penalties for acts of unfair competition and other acts violating competition law. Cases involving "advertising for unfair competition purposes" have constituted a large proportion of the enforcement actions taken to date in Vietnam.

Changes are also proposed in Thailand, with a new Trade Competition Bill proposed but yet to be passed. Some commentators hope that the proposed changes, which are reportedly expected to be passed before the end of 2015, may bolster the regime in Thailand, which has seen little enforcement since its introduction in 1999.

The Philippines and Myanmar both passed their competition laws this year, on 21 July 2015 and 24 February 2015 respectively (albeit that the latter is yet to come into force). Both laws contain prohibitions on anticompetitive agreements, abuse of dominance and anticompetitive mergers and acquisitions, and include criminal sanctions.

Lao PDR has reportedly passed its competition law, yet little is currently known about its design or likely impact. At present, the authors are not aware of an official English language translation of the law.

Rounding out our survey requires quick mention of Cambodia, which has not yet implemented competition laws at the time of writing. Whilst there is no known timeline for the likely introduction of competition law in Cambodia, the ASEAN wide developments in this area and the push for the closer economic integration may spur its introduction at some point.

As a concluding remark, it is useful to reflect on the impetus behind the development of competition law in the region. The ASEAN Economic Community Blueprint, and the proliferation of free trade agreements, may have been the catalyst for competition laws emerging in many countries. In this regard, it is an open question as to whether competition laws are ingrained in each country's economic policy, or whether it is more accurate to characterise the emergence of such laws as adherence to international principles required for participation in overarching agreements between nations. Whilst the introduction of competition laws obviously shows some commitment to the introduction of such regimes, much depends on the approach of the implementing authorities, which is something that remains to be seen in a number of the ASEAN jurisdictions.

It must be remembered that despite its progress, competition policy and enforcement in the region does still remain in the development stage. Questions remain over whether, and to what degree, harmonisation of competition policies and laws in the region will be possible over the next decade, which may in turn depend on the approach of the respective jurisdictions.