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Competition Law, Part 4
Indeed, local companies have sometimes established a monopoly position in the market in specific sectors. For instance, in telecommunications, Chinnawat Co., Ltd., a Thai company, monopolises the Thai market in mobile phones and related products; Telecom Asia is a monopoly telephone network provider in Thailand, and Sammart Telecom Co. Ltd is the only provider of satellite dishes.
ASEAN countries also reserve some business sectors and exclude foreign investors from investing in those specific fields of business. But all these laws and regulations have to be phased out. All industries will be opened for investment to ASEAN investors by 2010 and to all investors by 2020 subject to some exceptions. Therefore, if ASEAN countries liberalise their investment regimes, they may be concerned that they are moving from a system of screening all take-overs by foreign firms of national firms to screening none. They may see risks of foreign firms acquiring dominant positions. To replace these investment laws by competition laws may not only prove to be more effective than the screening process, but also a more efficient way to assess the competitive effects of foreign firms at the time of entry and after entry.
Competition laws and policies thus have a major role to play in the process of ASEAN liberalisation. This is also to ensure that the ASEAN market is kept as open as possible to new entrants, and that firms do not frustrate this by engaging in anti-competitive practices. In this manner, the vigorous enforcement of ASEAN competition law can provide a reassurance that investment liberalisation will not leave the government powerless against anti-competitive transactions or subsequent problems.
Competition laws may replace the restrictive investment laws and regulations, with principles based on non-discrimination in the control of restrictive business practices among firms, regardless of the origin or the nationality of enterprises. Competition laws normally apply to all firms operating in given national or regional territories, whether through domestic sales, imports, affiliates or non-equity forms of foreign direct investment. They do not, in principle, discriminate between national and foreign firms, or between firms from different national origins. In this manner, competition law monitors the competitive behaviour of TNCs having effects in host ASEAN countries. This is to ensure that all firms do not abuse dominant market power, and to prevent inefficiencies stemming from market allocation agreements which might lessen trade and investment. Therefore, competition law strengthens the principle of national treatment and enhances investment liberalisation, to comply with the objectives of the ASEAN investment area and economic integration in ASEAN.
Now I will assess the existing ASEAN laws relating to unfair competition, to consider to what extent ASEAN needs a comprehensive competition law at a regional level and in what respect competition law could replace the current foreign investment laws in ASEAN countries.
1.2 Survey of ASEAN Laws Relating to Unfair Competition
Currently, ASEAN countries do not have systematic competition laws and policies. Some ASEAN countries do have some elements of anti-trust law or anti- monopoly laws. In this section, I attempt to survey, country by country, the ASEAN laws relating to unfair competition and to analyse whether those laws are effectively enforced to control anti-competitive business practices.