Unfair Trade Practices: Conceptualisation, Significance and Regional Perspectives

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• Unfair Trade Practices Conceptualisation,
  Significance and Regional Perspectives
• March 11, 2011

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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.

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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.

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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.

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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.

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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.