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Competition Law, Part 11
Therefore to control the conduct of firms with such fragile protection of small firms may discourage large firms from making investments to enable them to compete aggressively. This implies that regulation of restrictive business practice is not only to ensure fair competition, but also to maximise the public good and sound resource management.
There is a dichotomy between market function and government role that lies at the heart of competition law. On the one hand, a liberal law of the market implies that it needs no barriers, no intervention, and no control, and that the market should be left to itself to function based on the rule of supply and demand. On the other hand, fair competition means that there should be no dominant enterprise, restrictive business practices, predatory pricing, or mergers and acquisitions that impede competition. All these behaviours may need regulatory control through competition laws to adjust the behaviour of firms. However, if there is absolute freedom from constraints, or in other words there is no regulation at all for fair competition, dominant firms could conquer the market so no one can compete. Hence, the proposed criteria for regulating the behaviours of firms may need to consider the type of business, size of business, competitive position, range or category of firms that the same level of undertakings may be treated fairly under the same conditions, rules and laws as well as the economic environment.
International competition laws for the private sector have actually been developed in various previous attempts, such as part of the 1948 Havana Charter for an International Trade Organisation, the UN Codes of Conduct and the OECD Decisions and Guidelines (Petersman, 1992: 627), The Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices(21), and the Resolution adopted by the Conference Strengthening the Implementation of the Set(22). However, these are "soft-law rules" rather than international/multilateral treaty law. Their aim generally is to avoid mutually harmful competition policy conflicts(23) and overcome the vision gaps and jurisdictional gaps between national competition laws (Petersman, 1993: 37). The reasons for regulatory differences in competition laws and the decentralised administration of competition policies are mainly due to the particularity of national conditions. For instance, the final decision on whether the costs of restraints of competition may be outweighed by economies of scale and by positive externalities will require case-by-case analysis with due regard to that particular national condition. Conflicts between national regulations can also entail market access barriers, market distortions and harmful international externalities.
Since there is no single agreed set of competition laws available at the moment and not even a competition law model, ASEAN countries need to develop a regional consensus on this issue.
(21) Source: United Nations Conference on Trade and Development (1981). "The Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practice" United Nations Document TD/RBP/CONF/10/Rev.1 New York, United Nations. The Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices was adopted by the United Nations General Assembly at its thirty-fifth session on 5th December 1980 by its resolution 35/36. The Second United Nations Conference to Review all Aspects of the Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices was held in Geneva from 26th November to 7th December 1990. That Conference adopted a resolution on "Strengthening the implementation of the Set" at its sixth meeting on 7th December 1990. A third review Conference took place on 13th-21st November 1995. This Conference adopted a resolution calling for a number of concrete actions to give effect to the implementation of the Set. The Set of Principles and Rules was also adopted by United Nations Conference on Restrictive Business Practices as an annex to its resolution of 22nd April 1980.
(22) Source: United Nations Conference on Trade and Development (1991). "Resolution Adopted by the Conference Strengthening the Implementation of the Set". Report of the Second United Nations Conference to Review all Aspects of the Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practice. United Nations document TD/RBP/CONF.3/9. Geneva, United Nations, Annex, pp. 48-51.
(23) Since the over two hundred international sovereign states have differing resources, preferences, comparative advantages, political system, and regulatory system, the national competition laws also differ in many respects such as exclusion of regulated sectors, exemption of exporters, rule-of-reason