3. How does the Competition Act benefit consumers?
Competition Act may benefit both consumers and business alike through prohibition of anti-competitive conducts. Through healthy and fair competition in the market, businesses are expected to be more innovative, efficient and responsive to consumer needs. Consumers may benefit from the best possible prices, quantity, and quality of goods and services.
4. How can the Competition Act help Micro, Small and Medium Enterprises (MSMEs)?
The Act covers all commercial activities relating to the provision of goods or services in the country regardless of business size. Through the prohibition of anti-competitive conduct, MSMEs are protected in a number of ways, including:
Equal opportunities for business participation|
The Act provides equal opportunities for businesses to participate in the market
|-||Reducing cost of inputs|
The Act protects MSMEs from being overcharged by suppliers who may be involved in anti-competitive conduct
|-||Reducing barriers to entry|
The Act helps deter businesses with a dominant position from imposing artificial barriers for MSMEs to enter or expand in the market
The Act encourages business to be more efficient and innovative to win customers.
1. What is the Competition Act?
The Competition Act is a law that seeks to promote and maintain healthy market competition by prohibiting business practices which restrain or restrict a fair competition process. It prohibits three key anti-competitive conducts as follows:
i. Anti-competitive agreements;
ii. Abuse of dominant position; and
iii. Anti-competitive mergers.
2. What are the types of conduct prohibited by the Competition Act?
Agreements which prevent, distort or restrict competition in the market are prohibited under the Act, regardless of whether the agreements are reached formally or informally. Anti-competitive agreements between competitors are also known as cartels. Businesses should not engage in any of the following hard core cartel conducts:
Bid rigging (tender collusion)
Abuse of Dominant Position
The Act prohibits a business with significant power in a market from abusing its dominant position by engaging in anti-competitive conduct that can harm competition in the market. For instance:
Deliberately selling below cost (Predatory pricing)
Refusal to supply
Applying dissimilar conditions for the same transaction
A merger that decreases competition in the market and negatively impacts consumers is prohibited. For instance, merger that creates or reinforces a dominant position, resulting in reduced consumers’ choice of goods and services as well as higher prices.
3. Who does the Competition Act apply to?
The Act applies to all commercial activities across sectors regardless of ownership of the entity.
The Act does not apply to the Government and Statutory Bodies as well as any entities that carry out activities on behalf of them.
4. Are there any activities excluded from the application of the Act?
Excluded activities from the Act are mentioned in the Third Schedule and the Fourth Schedule such as services of general economic interest, compliance with legal requirements, avoidance of conflict with international obligations and public policy. To find out more, please click here
5. What are the penalties for infringements?
Any business that is found to have infringed the Act is subject to a financial penalty of up to 10% of their business annual turnover for each year of infringement, up to a maximum period of 3 years.
A business which contravened the Act may also face civil proceedings in court by any person who suffers loss or damage directly as a result of such contravention.
The Competition Commission may also issue an order to prevent the recurrence of the infringement such as requiring businesses to modify or terminate the anti-competitive agreement or conduct.
6. What are the investigative powers under the Competition Act?
The Competition Act provides the following powers to investigate anti-competitive conducts:
Requests to produce specified documents or information from any person or business by giving written notice
Entry of premises to retrieve copies of relevant documents without court warrant after giving advance written notice to the occupants
Enter and search premises with a court warrant and to seize relevant documents and remove any equipment or article from the premises for investigation
1. Who is responsible in enforcing the Competition Act?
The Competition Commission of Brunei Darussalam was established on 1 August 2017 with the mandate to promote business competition in Brunei Darussalam economic landscape through the enforcement of the Competition Act. The Commission is an autonomous quasi-judicial body whose functions include adjudicating anti-competitive cases and imposing penalties on companies found to infringe the Competition Act.
The Executive Secretariat to Competition Commission of Brunei Darussalam has also been established on 1 August 2017 as the administrative and investigative arms of the Commission. The Secretariat administers the day-to-day affairs of the Commission as well as carries out functions such as advocating Competition Act to key stakeholders, receiving complaints, investigating anti-competitive cases and conducting market reviews.
The Commission's decision may be subject to the Competition Appeal Tribunal.
2. How does the Competition Commission detect anti-competitive conduct?
The CCBD can detect anti-competitive conduct through various means and methods. For example, through information and complaints received as well as from businesses that are themselves involved in the anti-competitive conduct.
Businesses involved in such conduct and decided to come forward can be entitled to a reduction of penalties of up to a maximum of 100% under the leniency program provided in the Act.
Any complaints on anti-competitive conduct can be reported to the Chairman of the Competition Commission Brunei Darussalam
Executive Secretariat of Competition Commission Brunei Darussalam at the following details:
Executive Secretariat to the
Competition Commission Brunei Darussalam
Level 5, Ministry of Finance and Economy Building,
Bandar Seri Begawan, BA 3910,
Negara Brunei Darussalam
here to download the complaint form.
3. Can the Competition Commission address the issue of price increase in goods and services?
It is crucial to note that an increase in prices does not necessarily pose competition concerns nor it is evidence of cartels. The Competition Act aims to promote a competitive market and it does not regulate prices of goods and services. Businesses are allowed to set prices of goods and services as they may deem fit, as long as the pricing decision is made independently of any agreement with others.
Trade Association and business conducts
In the event that an increase in price is a result of an anti-competitive conduct or collusion by businesses, the Competition Commission will take necessary actions to address the issue.
1. Does the Competition Act apply to trade associations?
Yes, section 11(4) states that the Competition Act applies to decisions made by an association which has the objective or the effects of preventing, restricting or distorting competition in Brunei.
2. What are the types of activities that an association can and cannot do to ensure compliance to the Act?
3. Can an association establish price recommendations?
An association is not allowed to establish price recommendations as it may harm competition. Prices are supposed to be determined independently by businesses according to the demand and supply of the products or services. The act of price recommendation could induce businesses to set their prices around the recommended levels regardless of their costs, quality and target markets.
4. In the event where all suppliers are charging the same price, does that indicate that price fixing has happened?
Not necessarily. Some products in the market tend to have similar prices even without the presence of any agreements due to the homogeneity (products that are not substitutable or products with the same characteristics) of the products.
5. Can exclusive agent or sole distributorship raise competition concern?
Generally, a company that has been appointed to be the sole agent or sole distributor of a certain product may not necessarily raise competition concern. This is because, usually the exclusive agent or sole distributorship agreement is justified by the benefits that it can bring to the economy especially for the small market and for a market where there is availability of substitute products. However, this will depend on the terms, conditions and also the impacts that the agreement has on the market as well as the market power of the exclusive agent or the sole distributorship.
Exclusive agent or sole distributorship will only be an issue under Competition Act if the agreement has the potential to have anti-competitive effects in a relevant market. This will prone to happen when the exclusive agent/sole distributorship has a degree of market power and that the agreement has the potential to stop new competitors from entering the market.
6. Can businesses exchange information?
Businesses often share information –normal commercial behavior and often pro-competitive. However, some information sharing which harms the competitive process may raise concern to the Competition Commission. Businesses should not share commercially sensitive information such as future pricing, profit margin, cost and production quality.