The First Batch of Final Guidelines
In November 2011, MyCC issue 3
sets of draft guidelines for public consultation. The final guidelines on these
were released in early May 2012. These are the Guidelines on Chapter 1
Prohibitions, Guidelines on Market Definition and the Guidelines on Complaint
Procedures.
Save for a few noteworthy changes in the Chapter 1
guidelines, the changes have been cosmetic rather than of real substance.
Chapter 1 guidelines seem to be the focus of feedbacks received in the
consultation process judging from changes made. Overall, all 3 guidelines
benefited from changes which made for better reading and flow.
Cautionary Use of Guidelines
The final guidelines have now all incorporated a
standard disclaimer and exclusion on the use of guidelines. Rightly so as
guidelines are not substitutes for the law and should be applied on a case by
case basis. They are useful to help in understanding the law but will never
replace the legal interpretation of legislations. Guidelines will not be binding
on MyCC nor on our courts and at all times the spirit and substance of
competition law will count for more than guidelines.
In countries with
advanced competition law application, guidelines have been an indispensable tool
for competition commissions, enterprises, lawyers, competition economists and
the public. Competition law can be abstract and elusive in concepts if not
properly illustrated and explained. They may also be revised from time to time
as competition concerns are not static and hence help make the law relevant and
living.
Chapter 1 - Noteworthy Changes
* RRP - A clearer signal has been conveyed through the changes on recommended retail price ( RRP ). If
RRPs issued by manufacturers or suppliers act as focal points for sellers and
retailers, the case for MyCC to investigate will be stronger. An RRP is seen as
a variant of retail price maintenance ( RPM ) mechanism which enables sellers
and retailers to form price cartels. This excludes or reduces intra-brand
competition.
* Franchise - MyCC’s benign stand on franchise in the draft
guidelines have been replaced with a note that separate guidelines will be
issued for franchising and intellectual property.
* Exclusive Distribution Agreements - MyCC has appeared to be more hesitant to stick out on
this. Previously in the draft guidelines, MyCC stated that it will not normally
examine such agreements involving suppliers with market share of less than 30%
and where the sole appointment is for less than 5 years. These statements have
been taken out in their entirety from the final guidelines.
* Notification for Guidance - In several other jurisdictions, notification for
guidance is expressly provided in legislation. In the course of the public
consultation process prior to finalizing these guidelines, MyCC was asked if it
will at least entertain informal notification for guidance until the Competition
Act is amended at some future time to incorporate this. To remove any doubt that
it will not entertain this, MyCC has grafted a paragraph to expressly exclude
this until the Act is amended.
* Appendices - 3 Appendices in the draft guidelines have been omitted. The first two dealt with the analytical framework
to assess a Section 5 claim for relief from liability and the other with areas
excluded from the ambit of the Act. The Appendix 3 is the one many will miss
though as it tabulated examples of ‘likely’ and ‘unlikely’ cases where
competition will be significantly prevented, restricted or distorted. This is
unfortunate as it is a useful tool to explain simply and clearly the typical
areas for the benefit of both enterprises and consumers alike.
In its press release, MyCC alluded to other guidelines being prepared. One of them
which is highly anticipated is the guidelines on dominance and abuse of
dominance.
We continue to monitor developments closely here in Malaysia,
Singapore and in the EU for matters that will affect our clients and business
associates.
Tay Beng Chai
This email address is being protected from spambots. You need JavaScript enabled to view it.
18 May 2012
PS. The Guidelines for Abuse of Dominant Position was published
on MyCC website on 15 May 2012.