Competition Law in Asia—Protecting (Against) Competition? (2)

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Kala Anandarajah, Tanya Tang, Dec 31, 2014

Competition laws across Asia have gone beyond infancy and nascent stages and have become laws to be reckoned with. The sheer numbers of Asian countries with competition laws, and the seeming diversity as regards enforcement patterns and application of principles, naturally leads one to question whether the implementation of the laws are truly motivated by competitive forces or whether some other hidden agendas drive the same.

China’s recent probes into Microsoft Corp. and foreign car companies such as Audi and Chrysler, for example, have prompted observers to question if China is using its competition laws to support domestic firms at the expense of foreign companies. According to a recent Reuters article, legal experts point out that the Chinese authorities appear to have wielded the law against more foreign multinationals than local companies; firms targeted include Mead Johnson Nutrition Co. and Danone SA which have been slapped with heavy fines, as well as U.S. chipmaker Qualcomm Inc., which faces the prospect of a U.S. $1 billion fine.

The same article noted that this had prompted the U.S. Chamber of Commerce to send a private letter to the U.S Secretaries of State and Treasury to highlight concerns that China’s enforcement of the anti-monopoly law was being used to pursue “China’s industrial policy goals” and promote Chinese producer welfare and advance industries policies that nurture domestic enterprises, instead of the internationally accepted norm of using competition law to protect consumer welfare and competition.

Similar concerns have also been raised regarding the Indonesian competition authority, which had in the mid-2000s issued a string of infringement decisions against the likes of Chevron, Carrefour, Mitsubishi, Pfizer, and Temasek, the Singapore sovereign wealth fund.

Amidst such concerns, this article looks at the track record of competition authorities in Asia—namely China, India, and the more active jurisdictions within Southeast Asia, some of which had implemented competition law at the behest of international organizations or pursuant to their obligations under free trade agreements with Western nations—to assess whether economic nationalism or protectionism may be at play. Has competition law in Asia been enforced in line with their stated objectives of protecting the competitive process and encouraging market entry and efficiency for the benefit of consumers, or has it been used as a tool to unfairly target foreign companies and protect domestic companies against foreign competition?