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Competition Law Part 7
The Philippines laws, even though there are several relating to unfair competition, mainly focus on trade, and do not cover investment. There is no regulation of mergers and acquisitions. Most laws do not clearly stipulate the amount of a fine or compensation in cases where competitors are injured. There are no criteria to justify the behaviour of firms, which might be regarded as unfair competition, and there is no measure to assess how the public interest would be affected. Also there is no clear procedure provided in the Philippines law for dealing with firms involved in unfair competition. Therefore, the existing laws are inadequate to cope with the problems that may occur when the ASEAN Investment Area is implemented.
In Singapore there is The Multi-Level Marketing and Pyramid Selling Prohibition Act. This Act makes it an offence for any person to promote or participate in a multi-level marketing scheme, which essentially embraces schemes, or arrangements, which recruit participants in pyramid selling on the chain-letter principle. However, apart from this, there is no Anti-competition law in Singapore. Its open economy and liberalised investment regime have been considered sufficient to guarantee free competition in Singapore.
In Thailand, there is The Prescription of Prices of Goods and Anti-Monopoly Act of 1979, and The Investment Promotion Act 1977 that includes a guarantee against state competition, against competition by state monopolies selling or dealing in similar products, against price control by the state, against export restriction, and against importation by the state or its agencies and enterprises. However, the practice of imposition of import bans on competing products to protect the activities of the promoted enterprise counteracts the guarantee of fair competition in this case. This is an example of the ineffective implementation of unsystematic competition rules.
All ASEAN countries also have Anti-Dumping laws and a Consumer Protection Law. But none of them has a systematic competition law that could regulate the rivalries of firms and control the potential restrictive business practices of producers in global networks. It is important that ASEAN countries should introduce a comprehensive regime of investment liberalisation, deregulation, privatisation and competition law enforcement rather than only relaxing laws on the spot and lifting barriers item by item, which is not effective and is likely to confuse foreign investors. Foreign investors usually feel burdened by tons of laws and regulations that sometimes counteract each other. Regulatory differences in the investment field are obstacles to foreign investors (Trisciuzzi, 1983)(14). Consequently, comprehensive regionalisation of competition laws could effectively enhance the favourable legal environment for attracting foreign investors (Geist, 1995; Baker & Holmes, 1991: 30)(15).
1.2.1 Merger Regulations for Replacing Regulations on Restriction of Foreign Equity in ASEAN Investment Laws
In this section I propose to focus on merger control in ASEAN. Even though a comprehensive regional system of merger control does not yet exist, it is in the interests of ASEAN to establish merger control in the region. Since ASEAN will have to implement national treatment in the near future and eliminate investment laws, which are incompatible with the objectives of the ASEAN Investment Area, merger regulations are needed to replace those laws used to function as a screening instrument. This is to ensure that there would be no emergence of cartels, trusts, oligopolies, concentrations or dominant market positions to harm the ASEAN economy, when the screening process and regulations of ASEAN investment laws are eliminated.
(14) Trisciuzzi (1983) says: "Perhaps the most important potential benefit would be the harmonisation of currently diverse systems of national laws and regulations. For example, harmonisation could reduce the high costs borne by multinational corporations in dealing with widely divergent regulatory regimes in different countries".
(15) Geist (1995) pointed out that it is not surprising to find that investors encounter and become discouraged with the potentially confusing and time-consuming regulations established by individual states. Also Professor Mark Baker noted in a 1991 review of Latin American FDI codes that "the greatest disincentive to direct foreign investment was dealing with local authorities. Foreign investors