Is Competition Commission just a paper tiger?

 
Socio-economic justice, equity and integrity in the business sector cannot be established without a fair competition among traders, retailers, wholesalers and manufacturers. At present the prices of daily essential items in Bangladesh have been soaring higher and higher. People with limited earnings are finding it extremely difficult to make their ends meet under these stringent circumstances. Economists and prominent citizens have stated that Bangladesh Competition Commission (BCC) is not being able to play its role significantly which has led to monopoly of a few business conglomerates in the market of consumer products in the country.

It may be recalled that a report titled "Uncontrolled monopoly to smash economy: Bangladesh Competition Commission's role questioned" appeared in The Asian Age on 9 August 2017. The Asian Age was the only English newspaper to have first reported on the role of Bangladesh Competition Commission. Another report titled "Competition laws should be properly utilized" was published in The Asian Age on 13 February 2023.

As a developing nation, adequate implementation of competition laws is crucial for the economic growth of Bangladesh. Successfully mitigating unequal and unfair competition in the market is bound to result in the influx of local and foreign investments, increasing the quality of products and services. Such laws would disallow any parties or syndicates from manipulating the market price and therefore, causing suffering for the consumers. In 2012, the government of Bangladesh promulgated the keenly anticipated Competition Act, 2012. The key objective of the statute was to ensure a competitive marketplace by preventing, controlling, and eliminating anti-competitive practices such as collusion between parties to control the price, creation of monopolies and/or oligopolies, regulating and supervising acquisitions and/or mergers of large corporations, and regulating the abuse of the key market position to manipulate the market.

By adhering to this framework, a certain level of healthy competition would be generated among the engaging parties which were subsequently expected to ascertain the best possible rates and the best possible quality of products or services in the market to be accessed by end-users.

The Preamble of the Competition Act, 2012, reads as follows,"In the context of gradual economic development of the country, it is expedient and necessary to make provisions to promote, ensure and sustain congenial atmosphere for the competition in trade, and to prevent, control and eradicate collusion, monopoly and oligopoly, combination or abuse of dominant position or activities adverse to the competition."

Section 5 of the Act thereby mandates the establishment of the Bangladesh Competition Commission (BCC) to enforce the aforementioned objectives of this law.

Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance of 1970 (MRTPO) was promulgated in 1970 by the government of Pakistan to curb the concentration of market power in the hands of a handful of West Pakistani families. Although the Ordinance was promulgated in 1970, it came into force on 17 August 1971.

3 types of conduct were prohibited by the MRTPO: i) undue concentration of economic power, ii) growth of monopoly power, and iii) unreasonable and deceitful trade practices.Much like the establishment of the Bangladesh Competition Commission, the MRTPO provided for the formation of a quasi-judicial body named the Monopoly Control Authority.

Following the liberation of Bangladesh on 16 December 1971, MRTPO was inherited by Bangladesh but remained unused. In 1990, following a period that saw unprecedented levels of trade liberalization in Bangladesh, it was realized that the MRPTO had become obsolete and should be replaced by a more appropriate regime. On that note, the Competition Act, of 2012, was brought into effect.

The BCC must focus on the recruitment of specialized personnel with expertise in the complex matters it handles. Currently, members are appointed from the Civil Service and Judicial Service. However, most of them often lack the necessary technical know-how, theoretical knowledge, or any formal training in the legal and economic aspects of regulating competition.

In addition, to ensure the enforcement of competition law, collusion between corrupt politicians and business leaders trying to create oligopolies must be dealt with decisively, as even slight influence from the government may make the BCC's task even more arduous.

The BCC must focus extensively on promoting its target as well as make maximum use of its position as chief competition regulator through advocacy, engagement and enforcement of the law.

Section 2 of the Act, which stipulates definitions, should be amended with immediate effect and definitions of words such as cartel, contract, and collusion need to be made irrefutable.Maintaining focus on the basic commodities market should be treated with utmost priority for the BCC as the spike in prices is causing immense distress to the middle and working-class people of Bangladesh.

Although the Bangladesh government is blaming monopolistic practices of business enterprises for the unforeseen instability in the commodities market, it can be ascertained that the BCC has not yet been successful in its objective of enforcing healthy competition as well as breaking up the oligopolies that dominate the basic commodities market.

Chairman of Bangladesh Competition Commission Pradip Ranjan Chakraborty said, "Bangladesh Competition Commission has been working hard relentlessly to resist monopoly in the market and to promote consumer rights. A number of cases are going on against certain business entities. We get cooperation from Commerce Ministry. We always make the best of our efforts to make sure that prices of daily necessary goods remain within the reach of common people. However, sometimes our activities slow down a little because of manpower shortage."

Former adviser to caretaker government Dr. Wahid Uddin Mahmud said, "Monopoly has spread due to lack of actions by concerned authorities. There is a tendency in our country to evade regulations particularly in business sector. Influential people are connected with these syndicates."
 
Dr. Zahid Hussain, former lead economist of World Bank, Dhaka office said, "There is very little implementation of law in our country. In some cases even the government cannot take tough steps against certain syndicates as regulations cannot be properly exercised. Consumer laws should be firmly executed by the government for fighting monopoly."
 
UNDP Country Economist Dr. Nazneen Ahmed said, "There are laws in our country but these laws are not appropriately utilized all the time. Moreover, there is also scarcity of competent people who can implement these laws. Those who run unethical syndicates violate all rules and laws. The leaders of these syndicates are becoming more and more powerful as no actions are being taken."