Regulating Anti-Competitive Market Behaviour in Bangladesh: From Commercial Tolerance to Consumer Detriment

Abstract

Competition law provides specific legislation and regulations to ensure a level playing field for all enterprises in markets, thereby protecting and promoting consumer rights. The study under this thesis was aimed at assessing the importance of regulating anti-competitive behaviour in protecting both consumers and businesses. Despite consumer welfare is a mission statement for competition watchdogs, it has been an under-evaluated concept even in courts and relevant competition commission cases. Furthermore, apart from legal, economic and policy matters, several other factors like conventional consumption theory and total welfare theory may affect the efficacy of regulation. As such, courts and regulators have often avoided the questions relating to the choice of applicable principles though it should have been otherwise. For these reasons alone, substantial mainstream debate over the application of different principles and approaches in competition adjudication has been limited. In respect of the choice of regulatory mechanisms, prominent competition regimes e.g., the EU, UK and India have adopted different policies. However, in determining competition liability following different policies may result in regulatory difficulties. The problem is at least two-fold. First, for the applicable rules in competition proceedings, specific guidelines would be necessary to deal with specific types of anti-competitive conduct. Second, the leniency provisions and an inclusive framework that conglomerates the legal, economic and social considerations in such proceedings must be designed. As compared to other jurisdictions, Bangladesh has not yet prioritized these issues, neither developed the substantive and procedural standards within the legal framework. So far the development of an inclusive competition law framework for Bangladesh is concerned, the study finds that the independence and efficiency of the regulators is the basis. The Competition Act was passed in 2012 but the Commission started functioning in 2018. Thus it has been only 6 years since the competition watchdog started dealing with cases. For this reason, the necessary amount of knowledge or experience of market regulation is lacking now. Therefore, the only way out of regulatory failure is to enhance 7 knowledge of competition law and policy and strengthen the regulatory framework. The best practices in other jurisdictions show that competition commissions can alone be the whistleblower of anti-competitive practices going on and also be the beacon of the legal battle against such practices. In this backdrop, the study essentially revolves around some basic questions relating to efficient regulation of market behaviour in Bangladesh. These questions include matters concerning nationwide highly concentrated markets, dominant enterprises, consumer behaviour, compliance issues, development of regulatory mechanisms and necessary reforms in the law. The study attempts to discuss and answer these through a systematic method of linking the objectives of the study with the assumptions. One significant assumption underlying the study is that effective and strong regulation by an independent regulatory body can protect both consumers and businesses. This also complements the objectives and significance of the study. Another major assumption comprises of the importance of addressing the economic and social issues in competition proceedings. With the content analysis, case laws and case studies, this study adopts both doctrinal and non-doctrinal research approaches. A semi-structured empirical method is applied besides the principal qualitative approach for markets are at the core of competition jurisprudence. Survey and interviews are conducted at the retail level markets in order to reach the findings. The significance of the study lies in the gap in the legal and regulatory framework of competition law in Bangladesh. In general, the absence of standard guidelines to follow in competition proceedings can result in misjudgments. Furthermore, the unique characteristics of the types of anti-competitive conduct and agreements require segregated approach of regulation. Therefore, different principles need to be developed and applied. The government’s role in preventing monopoly, cartels and collusions is undisputedly substantial in Bangladesh where government policy can often restrict competition. Moreover, the study’s importance is also appreciable as the Competition Commission as the principal regulatory authority is yet to achieve eloquent legal and regulatory independence.