Inter-religious competition and anti-trust?
Writer: Lord Bobo
Published: Fri, 24 Feb 2012
Lord Bobo, do you think that Malaysians need guidelines for inter-faith relations? In Faith, via email
Malaysia is suddenly developing into a very strange place. For decades, it was hailed as the one true multi-racial nation, where people of different races and religions co-existed in a harmonious blend of costumes, colours, food, and smiles. But now, one cannot go more than a couple of days without reading about “racial tension” or “sensitive issues” or arguments on the basis of “religion” or “faith”. What has happened?
Could it be that the country really is falling apart? That the people have suddenly decided to be intolerant?
Or perhaps it is because the media and the political and religious leaders keep giving prominence to such discussions? In the past week, we have been hearing about the need for guidelines for relations between Muslims and non-Muslims.
The debate about the race relationslaw is still quietly rumbling on behind the scenes too.
This must stop. No such guidelines are necessary. And any efforts to introduce laws highlighting race or religion should be shoo-ed away as quickly as possible. The longer we allow these issues to be a part of our national debate, the more we give prominence to race and religion as factors that differentiate us.
Malaysians do not, and should not, need religious authorities or the state to regulate our interaction. This is not a boarding school. Enforcing “unity” by legislation will only lead to a false unity – one that is brought about artificially because of fear of punishment, rather than a true unity, which results from love and mutual respect.
What is the Competition Act? I heard that it has been in force effective January 2012, but have not heard much about it since. Is this some law that intends to make us more competitive with each other? I asked some lawyer friends, and they gave a very long speech about how it is the same as “fair trade law” and “antitrust law” – but those don’t sound the same as “competition law”. Anyway, I think they just didn’t know the answer and just tried to sound smart like all these lawyer types do (no offence). Competitor, via email
The Competition Act 2010 came into force on Jan 1 this year. Competition law is really quite complex, and not many jurisdictions have managed to come up with a balance between enforcing fair business practices, protecting consumers, and not stifling innovation and competition.
The two most mature and influential jurisdictions for competition regulation are the United States (where it is known as antitrust law), and the European Union (where it is known as competition law). As your lawyer friends pointed out, it is also known as fair trade law, though this is quite rare. Whatever name is used, the basic intention is the same – the regulation of anti-competitive conduct by companies.
What is anti-competitive conduct? As you would expect, this is a very simple question with a very complex answer. Entire books have been written just in response to this question. His Supreme Eminenceness will keep it simple, as brain explosions are never pretty. There are three major no-nos.
The first no-no is getting involved in agreements or practices that are deemed to stand in the way of free trade and open competition between competitors. The most common practice that falls foul of this no-no is forming a cartel. As a simple example, companies that are in the same business cannot sit down and agree to fix prices. That would remove the competitive nature of the market, which would hurt consumers.
The second no-no is what is called an abuse of dominant position. As kinky as this sounds, there is no sado-masochism involved here. This focuses on the big boys, the dominant players in any particular market. The intention is to prohibit the Big Kahuna from engaging in practices that would eliminate any small competitors. For example, if there is a new emerging competitor in the same market, a Big Kahuna could sell his product at a significantly cheaper price. By being willing to make a loss, the Big Kahuna would ensure that no one would buy the product from the new boy in town, and it won’t be long before the newbie is out of business. This is called “predatory pricing”, and is not allowed.
The third no-no is when it comes to a joint-venture or merger-and-acquisition that is deemed to result in the diminishing of a competitive environment.
Despite seeming new, competition law is actually very old. From the early days of major organised trading, there have been anti-competitive practices, and laws against them. In ancient Rome, some anti-competition laws even carried the death penalty. And despite the differing names and often differing policy statements, almost all competition regimes have the same general prohibitions and intentions.
In Malaysia, the enforcement and development of competition law will be spearheaded by something called MyCC – the Malaysian Competition Commission. It is early days yet, so MyCC have mostly been busy holding public consultations, holding talks and roadshows and issuing some basic guidelines.
Hopefully they have been encouraging competition in the overly-sweet-hot-drinks, local kuih and currypuff market for the many meetings that they have undoubtedly been having. Time will tell how competition law develops in Malaysia.
Lord Bobo really must end this now. If you want to know more about competition law, go and read LoyarBurok – who knows, there may be some articles on the topic! There is so much more to learn, Lord Bobo didn’t even mention vertical and horizontal agreements (not the horizontal transactions that are caught by vice laws).