Unfair Trade Practices: Unfair Trade Practices: Conceptualisation, Significance and Conceptualisation, Significance and

Regional PerspectivesRegional PerspectivesMarch 11, 2011March 11, 2011

COMMENTS ON PRESENTATION

• Definition of an Unfair Trade Practice

• Relationship to Competition Law

• Harm to Consumers

• Implications in ASEAN Countries

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DEFINITION OF AN UNFAIR TRADE PRACTICE?

• UTP are fraudulent, deceptive or dishonest practices between parties that often are not bargaining with each other in any normal sense.

• UTP may occur directly between competitors, between businesses at different levels of a supply or production chain, or may directly target consumers.

• UTP may involve the breach or misuse of another statute in order to obtain an “unfair” competitive advantage –e.g. abuse of intellectual property rights.

RELATIONSHIP TO COMPETITION LAW

• UTP are not and should not be a “basket clause” to cover issues not explicitly addressed by Competition Law.

• There are differing views of the goal of Competition Law, but, from my perspective, it is about protecting markets and competition as a whole – not specific competitors.

• In contrast, UTP often focus on specific competitors without concern for effects on markets or on traditional metrics of competition such as price.

RELATIONSHIP TO COMPETITION LAW

• Some UTP are addressed within a more general Competition Law:• Overlaps with Abuses of Dominance, but UTP often includes actions by

non-dominant competitors that may not otherwise infringe a Competition Law;

• Some Competition Laws include “fair competition” provisions or regulate specific conduct such as false advertising.

• However UTP may also be addressed within consumer protection legislation or other statutes.

HARM TO CONSUMERS

• Harm to competition is often measured as a harm to consumers in the form of artificial changes in price or other elements of competition.

• A specific UTP may not result in any measurable harm to competition within a market or to consumers.

• However widespread acceptance of such conduct would subvert the rules of a free competition established under Competition Law and other commercial statutes.

IMPLICATIONS IN ASEAN COUNTRIES

• Potential impact of UTP in ASEAN members:• Many ASEAN members are developing economies or economies still

transitioning to free market economies;• Many ASEAN members have not fully developed or implemented the

legal framework to ensure free market competition;• Numerous factors may exacerbate effects of UTP that may have

particular relevance in some ASEAN members including: • Insufficient enforcement or lack of commercial legal framework;• Corruption;• Lack of available relevant information for consumers and businesses;• Potential inability of small local businesses to defend against UTP.