Competition bill tabled

After missing the enactment commitment at WTO by over two years, the government last week tabled Competition Bill at the Parliament for approval.

But the Bill, already endorsed by the Cabinet, drew criticism from parliamentarians for dropping the original idea of constituting an autonomous and independent competition authority to check anti-competitive practices in the market.

"The absence of a strong authority has raised question over the effectiveness of the Bill at the very onset," said Speaker Subash Nembang.

Commenting on the Bill at a program on Saturday, Nembang charged that the bill has simply failed to incorporate the core principle of competition. He added that the constitution of a Competition Board led by the Commerce Secretary would leave the Act as ineffective as Consumer Rights Protection Act.

He was referring to the provision of the Act, which says that a Competition Board would be set up to promote competition and check anticompetitive practices in the market.

"The Board will be headed by the Commerce Secretary along with two members from different ministries and a representative from Federation of Nepalese Chambers of Commerce and Industry," reads the Bill.

The Bill has also disburdened the Board from quasi-judicial duties, which was originally mooted for the then proposed competition authority.

It has assigned the Board with tasks like providing various recommendations to the government as and when needed, working to raise public awareness and conducting regular market inspection.

"The drawback of the Bill is that it has failed to envisage an autonomous, strong and effective body equipped with quasi-judicial authority to enforce the Act," said Dhrubesh Chandra Regmi, coordinator of Competition Project, South Asia Watch on Trade, Economics and Environment.
Among others, the Bill has proposed appointment of a competition inspector by the Board to monitor the market and investigate cases filed against unfair play. "After investigating, he will file a case at the court for verdict," states the Bill.

The Bill has also provisioned a fine up to Rs 500,000 for the party guilty of resorting to anti-competitive practices. It has incorporated a provision of compensation, whereby the company resorting to anti-competitive practice would need to compensate the party hurt due to unfair play.

"Liability of compensation will arise only after the court decides on the case," reads the Bill.

The Bill has, among others, defined anti-competitive practices such as monopoly, market leadership, tied-selling, predatory pricing and bid rigging among others, and barred business players from practicing those.

It has barred merger and acquisition of companies if merger and acquisition raises the companies' individual market holding over 40 percent.