Govt unveils competition law
The government on Wednesday unveiled the competition law, which for the first time has dealt at length with anti-competitive practices and prescribed stringent actions against practitioners of undue business nexuses and unethical practices.
The spirit of the law is to promote self-discipline among business players, said Prachanda Man Shrestha, joint secretary at Ministry of Industry, Commerce and Supplies (MoICS) referring to the new Competition Promotion and Market Protection Act.
But, if companies still resorted to activities that distort market, and hurt competitors and consumers' interest, they would face stringent action from the state. “Its objectives are to discourage wrongdoers and safeguard consumers and genuine players as well,” added Shrestha.
Likewise, the Act has for the first time cushioned consumers and business competitors with compensation measure in case they suffer loss and damage due to anti-competitive practices.
With the enactment of the law, tied selling, bid rigging, cartel, collective price fixing, market restrictions, dial-system, market segregation, undue business influences, syndicate and exclusive dealing has now officially become illegal activities in the country.
It has also restricted companies from exercising malafide investment and business takeovers and sales of inferior quality goods.
Companies henceforth have been barred from taking over more than 50 percent shares of companies in the same business in case it establishes their monopoly in the market. “In case of defiance, a fine of up to half million rupees will be slapped,” says the Act.
The Act further states that firms resorting to bid rigging will be fined up to Rs 300,000 and those trying to establish monopoly will be slapped Rs 100,000.
In case of attempts of market restrictions, companies will be fined up to Rs 50,000. Likewise, tied selling and activities of misinforming consumers can be fined up to Rs 25,000.
The Act has set fines not just for the companies. Even consumers and parties who lodge complaints against the business firms without substantive grounds could be fined Rs 10,000.
“This provision has been incorporated to check ill-intended actions against companies,” said Harish Chandra Dhungana, an advocate at a program organized to disseminate the Act.
Experts and consumer rights activists speaking on the occasion said the Act was fairly balanced. But they expressed skepticism over its effective implementation.
The government on Wednesday unveiled the competition law, which for the first time has dealt at length with anti-competitive practices and prescribed stringent actions against practitioners of undue business nexuses and unethical practices.
The spirit of the law is to promote self-discipline among business players, said Prachanda Man Shrestha, joint secretary at Ministry of Industry, Commerce and Supplies (MoICS) referring to the new Competition Promotion and Market Protection Act.
But, if companies still resorted to activities that distort market, and hurt competitors and consumers' interest, they would face stringent action from the state. “Its objectives are to discourage wrongdoers and safeguard consumers and genuine players as well,” added Shrestha.
Likewise, the Act has for the first time cushioned consumers and business competitors with compensation measure in case they suffer loss and damage due to anti-competitive practices.
With the enactment of the law, tied selling, bid rigging, cartel, collective price fixing, market restrictions, dial-system, market segregation, undue business influences, syndicate and exclusive dealing has now officially become illegal activities in the country.
It has also restricted companies from exercising malafide investment and business takeovers and sales of inferior quality goods.
Companies henceforth have been barred from taking over more than 50 percent shares of companies in the same business in case it establishes their monopoly in the market. “In case of defiance, a fine of up to half million rupees will be slapped,” says the Act.
The Act further states that firms resorting to bid rigging will be fined up to Rs 300,000 and those trying to establish monopoly will be slapped Rs 100,000.
In case of attempts of market restrictions, companies will be fined up to Rs 50,000. Likewise, tied selling and activities of misinforming consumers can be fined up to Rs 25,000.
The Act has set fines not just for the companies. Even consumers and parties who lodge complaints against the business firms without substantive grounds could be fined Rs 10,000.
“This provision has been incorporated to check ill-intended actions against companies,” said Harish Chandra Dhungana, an advocate at a program organized to disseminate the Act.
Experts and consumer rights activists speaking on the occasion said the Act was fairly balanced. But they expressed skepticism over its effective implementation.
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