Category Archives: Asia

Antitrust in non-democratic regimes

Emerging Trend in Competition Law in Southeast Asia: Perspectives from Myanmar and Thailand

Ploykaew Porananond, Po Ma Ma Aung. World Competition (2019)


Establishing a new competition law regime is never an easy task, especially for developing countries. The current literature of competition law is rich with suggestions on the best political economy preconditions conducive to an effective competition law regime. It is generally believed that countries with a democratic political regime and a stable rule of law are more inclined to enact national competition law. Moreover, countries that embrace the principle of trade liberalization, privatization, and market economy are a fertile ground to the growth of competition law.

Yet, the enactments of Myanmar competition law in 2015 and Thailand new competition law in 2017 deviate from this general understanding. Naturally, it is assumed that competition laws adopted in these countries would be starkly different from pre-existing competition laws. It hints towards an emerging trend of competition law, one which manages to enact and enforce competition law regardless of the reality of the local political economy. This article explains the cause and consequence of this deviation, without immaturely evaluating the effectiveness of such young regimes. It concludes with investigating the likely source behind it, specifically whether the ASEAN, in which both Myanmar and Thailand are Member States, is behind such phenomenon.


Predatory pricing in India’s telecommunications market? The Competition Commission says no

By Francisco Beneke*

Some facts:[1]

  1. India is the second largest mobile telecommunications market in the world;
  2. Last September, it witnessed the entry of Reliance Jio Infocomm, which invested 20 billion USD to deploy a 4G network in India;
  3. This company is a part of a corporate group owned by India’s wealthiest individual—Mukesh Ambani;
  4. As part of its entry strategy, the company offered voice and data services for free until March this year, which allowed it to quickly capture just over 6 percent of the market in terms of users; and
  5. This led incumbent Bharti Airtel, number 1 operator in terms of both revenue and users, to sue Reliance Jio for abuse of dominance through predatory prices.

The Competition Commission of India (CCI) ruled last Friday that there was no prima facie case of predatory pricing,[2] which Bharti Airtel still has the opportunity to contest under article 26 (6) of the Competition Act. My guess is, however, that such efforts would be futile. Seeing the facts listed above it might be your guess too. After reading the short 17-page decision, one can clearly see that the CCI has a favorable view concerning the competition dynamics in India’s mobile telecommunications market, which may also foreshadow how it will decide the mergers under its review (it already okayed Bharti Airtel’s merger with Telenor India, but other transactions are still pending).

The decision may be summarized as follows: if winning a predatory pricing case against an incumbent is difficult, winning one against an entrant is next to impossible, considering that the complainant is arguably the dominant player. Bharti’s strategy was what one would expect. It tried to put forward a very narrow definition of the relevant market––4G services––where it argued Reliance Jio had, within less than a year, acquired a dominant position. The CCI did not buy it. It defined the market as the provision of wireless telecommunications services to end consumers, including 2nd, 3rd and 4th generation technologies. Jio’s 6 percent share in this broader market made it unnecessary to enter into the analysis on whether prices were predatory.

It strikes me as odd that Bharti would have considered pursuing this suit in the first place. It might have thought that the CCI could have been impressed with the fact that Jio is a part of a massive conglomerate with vast resources. Then again, it is hard to believe that the authority could have been persuaded that incumbents were in a disadvantageous position in this respect, as it rightfully was not.

From an economic standpoint, Bharti’s case was shaky, at best. It does not fit, at least with the information at hand, with the common assumptions that have to be made for a realistic price predation case.[3] It is hard to argue that Reliance Jio had such a cost advantage that it could have endured a lengthy price war to drive enough operators away from India’s market. The country is also experiencing fast growing incomes which will increase the size of the broadband markets, a trend that plays against a price predation strategy being effective. A growing market that can accommodate more entrants is not easy to monopolize. Being an entrant, it is also impossible to argue that Jio is in a position of having a low cost predator reputation that could keep companies away from the market once it becomes the dominant operator and raises its prices.

This is just a quick, though I hope illustrative, review of the case and its circumstances. The takeaways are: few incumbents like Jio’s strategy of giving away everything for free, the case was rightly decided, and it appears that Bharti’s legal advisers were either bored, not heard or have little clue on what a successful predatory pricing claim looks like. India’s telecommunications market is undergoing many changes, which I hope, will give us more interesting material to analyze in the future.

*Co-editor, Developing World Antitrust


[1] See Competition Commission of India, Order under Section 26 (2) of the Competition Act, case No. 3 of 2017, available at; D’Monte, L (2017, April 30). It’s the survival of the biggest in India’s telecom industry. Live Mint. Available at; and Williams, C. (2017, January 14). How the Ambani family feud hit Vodafone’s Indian mobile empire. The Telegraph. Available at

[2] Competition Commission of India, Order under Section 26 (2) of the Competition Act, case No. 3 of 2017, available at

[3] See Carlton, D.W. & Perloff, J.M. (2005). Modern Industrial Organization, pp 352–357. United States of America: Pearson/Addison Wesley.

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Riding the M&As wave in India’s telecommunications industry: The ambiguity of market concentration

By Francisco Beneke*

One can write either loud praise or a strong critique about the work of the Competition Commission of India (CCI) and the Competition Appellate Tribunal (Compat). However, it must be agreed that their influence on global affairs is growing at a fast pace. Now, the authorities must choose how to deal with a wave of consolidations in the world’s second largest mobile telecommunications market.

The industry was shaken up by the disrupting entry of Reliance Jio Infocomm, a company backed by India’s wealthiest man, Mukesh Ambani. It quickly captured an astonishing 100 million subscriber base in less than three months by basically giving all services for free for a limited period of time (ending in June this year). This was a hard blow to the industry, which had to enter into a profit-damaging price war, but fantastic news for consumers. In the aftermath, most of the main players have followed a consolidation strategy. In short, the deals may leave the mobile telecommunications market with three companies controlling at least 80 percent of subscribers and revenue.

Should these concentration figures raise concerns? A sensible answer is that the matter is complicated. Common thinking within antitrust authorities is that market concentration does not tell the entire story but that other factors, such as entry barriers, have to be examined. This, however, is not an interesting point because of two reasons: first, antitrust authorities tend to easily conclude the existence of barriers to entry in highly concentrated markets; and second, it is hard to find concentrated markets without some sort of entry impediment.

The more interesting question is how to interpret different market structures given certain industry characteristics. Under certain conditions, fewer firms can mean tougher competition. The reason is a commonly overlooked factor by antitrust authorities, which is the game being played in the industry. In other words, how firms adjust their behavior to that of their competitors. Here is where the work of John Sutton has made an invaluable contribution to our understanding of market structure.[1]

The game the author contemplates with the lowest concentration given a market size of a homogenous good is that of a cartel.[2] When firms collude to achieve the monopoly price, more firms can enter and share the market because of higher profits. When the game is more competitive—for example, with any form of uncoordinated behavior such as a Cournot or Bertrand setting—lower industry profits cause fewer competitors in equilibrium. In the most competitive game (Bertrand) the steady-state number of firms is one.

The bad news is that research on the determinants of the game in each market is still inconclusive.[3] As a practical matter, an antitrust authority like the CCI can conduct an investigation to obtain evidence on collusion and ensure that the strategies followed by market participants are at a minimum not the least competitive ones. But another important question still remains and is that of whether an increase in concentration will favor a game that leads to lower consumer welfare. An additional factor to consider in this matter is that of endogenous sunk costs, which can help understand how the existence of a few big players can actually be good news for consumers.

In markets like mobile telecommunications, firms usually choose how much they invest in the quality of their products (which in a broad sense includes advertising as well). That is, sunk costs are not exogenous. This is why, according to Sutton, we can see similar levels of concentration in the Indian market and that of my home country, El Salvador, even if the difference in size is abysmal. In such scenarios, Sutton’s model predicts that the biggest firms are expected to be the ones that offer the best quality and capture demand away from inferior products, which could mean greater concentration but is not necessarily detrimental to consumer welfare. The result will depend on how much value consumers place on superior quality.

We can easily imagine that preference for quality will be dictated in part by income. Here is where an important feature of the Indian market—and that of some developing countries—comes into play. India is an economy with rapidly rising incomes. If we can expect this trend to hold in the future, the mobile telecommunications market will be able to introduce better quality products for more demanding consumers. This could mean that the ideal market structure is one with a few firms with the resources to invest in the infrastructure needed (say, a 20 billion USD LTE network like the one deployed by Reliance Jio).

A final word of caution is in order. This article attempts only to shed light on factors that can be useful in understanding the consequences of the wave of consolidations in the telecommunications industry in India. However, a claim is not put forward that increased concentration is necessarily a good thing for consumers (it can lead to other overlooked problems already analyzed in this blog). Sutton’s theories rely on a set of assumptions that may or may not hold in this specific case. Their analysis can, nevertheless, help the CCI and the Compat to make a more educated guess (because merger control is nothing more than that) on the likely effects of the mergers that are currently taking place.

*Co-editor, Developing World Antitrust

[1] Sutton, J. (1991). Sunk Costs and Market Structure. Cambrige, MA: MIT Press; and Sutton, J. (1991). Technology and Market Structure. Cambrige, MA: MIT Press. For a discussion of Sutton’s work see Carlton, D.W., and Perloff, J.M. (2005). Modern Industrial Organization. USA: Pearson/Addison Wesley.

[2] With differentiated products, the theories predict only a lower bound of market concentration, but anything over it is possible.

[3] Carlton and Perloff (2005), supra, n. 1.

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Price Fixing in Pakistan’s Poultry Market: Is There a Case of False Positive?

By Owais Hassan Shaikh*


The Competition Commission of Pakistan (CCP) is the national competition authority in the country. It was created in 2007 as a successor to the Monopoly Control Authority and operates under the Competition Act, 2010 (Act). To date the CCP has issued around 100 orders in various cases. In February 2016, the CCP issued an Order against the Pakistan Poultry Association (PPA), finding that the PPA violated section 4 of the Act, which relates to prohibited agreements.


The PPA advertised prices of broiler chicken (live and meat) and chicken eggs in various Pakistani newspapers between 6 and 9 October 2015. The CCP issued a show cause notice to the PPA as it considered the advertisements to be ‘decisions’ under section 4 to fix prices in the broiler chicken and egg markets having the object or effect of restricting competition in those markets. The PPA responded arguing that the local governments fix the prices of the poultry products and that PPA members face arbitrary price fixation by many city administrations. In this regard it also provided an official assurance that the prices are set by the government and not by the PPA.

Analyzing the PPA arguments, the CCP came to the conclusion that by advertising these prices, the PPA violated section 4(1) of the Competition Act. In coming to this conclusion the CCP held that the PPA’s defense that the poultry product prices are not determined by it, and therefore that it has no liability, is not tenable as the ‘discussion, approval or advertising of prices’ falls within the ambit of anti-competitive behavior; and even if the defense is accepted, advertising prices under its own name signals to the market that the PPA approves the prices, that they are an optimum rate to be followed and that the alleged advertisements could influence the overall market prices. It stressed that the PPA’s ‘standing as an association ensures a certain authority which has the implicit effect of manipulating the behaviour of players in the relevant markets’. According to the CCP, the advertisements also constituted ‘the exchange of data which encourages more uniform prices than might otherwise exist.’ The CCP fined the PPA Rs. 50 million (approx. $ 0.48 million) for the broiler chicken and the egg markets each and ordered it to immediately suspend such advertisements. In imposing the high fines, the CCP observed that the PPA had already been cautioned in a previous Order to ‘desist from taking any decision, even if merely suggestive in nature, regarding pricing, production and sale of poultry products.’


The main issue in the Order was whether the advertisement by the PPA of broiler chicken and egg prices could be considered a ‘decision’ under section 4 of the Act. Paragraph 1 of Section 4 prohibits an association of undertakings from taking a decision that may have the object or effect of restricting competition with certain exceptions.

The CCP defined ‘decision’ of an association of undertakings in its earliest Order pertaining Section 4.[1] It held that ‘a decision of an association of undertakings reflects an understanding between its members’. ‘Agreement’ includes ‘understanding’ as defined in Section 2 of the Act, therefore, a decision by an association of undertakings is an agreement between its member. It is generally held that the concept of agreement or understanding requires a concurrence of wills or meeting of the minds.[2]

However, the problem in this Order is that the CCP did not provide any evidence showing a concurrence of wills or meeting of the minds with regard to fixing prices in the two markets by the PPA or its members. It does not even provide any evidence to rebut the PPA’s assertion and assurance that it does not fix the prices, but that it is forced to take them as they are from the local governments. Unlike the CCP’s Order in 2010 against the PPA, which relied extensively on the documents recovered from the PPA offices to prove cartelization, the current Order is uncharacteristically short (only 8 pages as compared to 36 pages in 2010) and does not provide any evidence of the alleged conduct. Instead, it implies that advertising the prices by the PPA itself is tantamount to a decision as it has the ‘object’ of preventing or restricting competition in the relevant markets. However, as analyzed above, in the absence of a ‘decision’ in the meaning of section 4, there is no basis of claiming that the advertisement per se had the object of restricting competition in the market.

According to the CCP, advertising prices by an association of undertakings falls within the ambit of anti-competitive behaviour. Therefore, the publication of prices in these advertisements under the PPA’s name may reflect to the different market players, including the consumers, that these prices have the approval of the PPA and are the optimum rates to be followed. In general, advertisements are pro-competitive tools in that they provide consumers information about the various characteristics of a product. They reduce consumers’ information and search costs. According to the CCP, the said advertisements carried the daily prices for the products in the broiler chicken and egg markets. The Order does not mention whether the government also provided the information about prices to the consumers. If this was not the case, the PPA advertisements did disseminate useful information to the consumers.

Without convincing evidence of independent meeting of the minds regarding price fixing by the PPA or its members, especially where the association provides additionally an assurance with regard to its stance, the imposition of a fine to the tune of Rs. 100 million appears to be unjustified. Though there is merit in the CCP’s argument that without an appropriate disclaimer that these prices are fixed by the government and the advertisements are not endorsements of these prices by the PPA, they may be seen as such by the market players, including the consumers, the CCP could direct the PPA to include the same, or a variation thereof, so that no one would be misled with regard to the PPA’s role in fixing poultry prices.

Moreover, by fining the PPA, the CCP fails to remedy the actual anti-competitive conduct in the market i.e., price fixing by the local governments. To solve this, the CCP should have focused on the concurrence of wills between the local governments and the PPA or its member undertakings. This could be done, for example, by investigating whether there was any coordination, communication or understanding between the PPA and the local governments prior to fixing prices on a daily basis.[3] Penalizing the PPA would definitely not discourage the local governments from fixing the prices, but it will deprive consumers from acquiring the most relevant information regarding broiler chicken and chicken eggs i.e., their prices.

* Visiting Lecturer, EU Business School, Munich; PhD, Ludwig Maximilians University, Munich; LL.M, University of Augsburg, Augsburg; MBA, Institute of Business Administration, Karachi.

[1] In the matter of Show Cause Notice dated 24 December 2007 for Violation of Section 4 of the Ordinance ¶ 46 available at

[2] Bayer v Commission, Case T-41/96, [2000] E.C.R. II-03383 ¶ 69

[3] This was the actual line of inquiry in the Dole food case that the CCP cited in the Order where supplier of bananas coordinated wholesale prices which was then signaled to the market, though, the final market price would be negotiated with ALDI, as the biggest buyer. See Dole Food and Dole Fresh Fruit Europe v Commission, C-286/13 P, [2015] E.C.R. II ___ (delivered 19 March 2015). The CCP, however, did not adopt this line of inquiry in its own investigation in the current Order.

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Antitrust News from the Philippines, South Africa and Morocco: A New Comer, a Non-Conventional Merger Decision and Germany Offers Guidance

By Amine Mansour*

During last days, Francisco and I were very busy due to a huge workload. However, many important developments in the DW antitrust arena occurred.

1/– Philippines nears introduction of its first comprehensive competition Law.  Recently, the Senate President indicated that the Congress will pass the Act (will be known as Fair Competition Act of 2014) before yearend. This is close to became true as the text was approved on Second reading by the senators. Philippines is the last country from the ASEAN six majors to adopt a competition law (Indonesia and Thailand in 1999, Singapore in 2004, Vietnam in 2005 and Malaysia 2010). Introducing a Competition bill has become a pressing issue in Philippines giving its regional commitments. In 2015, ASEAN countries will implement the ASEAN Economic Community (regional economic integration) which calls in its Master Plan (ASEAN Economic Community Blueprint) for countries to undertake several actions in the field of competition and in particular “Endeavour to introduce competition policy in all ASEAN Member Countries by 2015“.

In substance however, the text comprises not only prohibitions on anti-competitive agreements and abuse of dominant position but introduces also a merger control regime. The wording of some provisions suggests that the drafters were inspired by the EU competition law model. In support of this position, we can, for instance, note the existence of the object/effect alternative in the article laying down the prohibition of anti-competitive agreements. Also, the exemption mechanism is somehow similar to article 101 (3) TFEU even if it does not include all the four conditions. Similarly to article 101 TFEU, the assessment of anti-competitive agreements under the Fair Competition Act of 2014 will thus consist of two different parts. Other developments confirm the preference given to the European model, but without going into too much detail (we will soon come up with a very detailed article on the Act) a quick overview of the text clearly points toward another victory for the European model of competition.

2/ In south Africa, The Competition Commission (CompetC) has identified in the merger Shoprite/Ellerines a public interest concerns relating to the situation of the 308 post-merger workers of the target company (Ellerines). Following this, it has recommended to the Tribunal making the approval of the merger conditional upon the retention of the remaining employees.  Naturally, the Tribunal agreed, yesterday, with this proposal and approved the merger on the condition that all post-merger workers will be employed by the acquiring firm Shoprite. Such decision does not come as a surprise. Article 12A (3) of the Competition Act clearly stipulates that: ” When determining whether a merger can or cannot be justified on public interest grounds, the Competition Commission or the Competition Tribunal must consider the effect that the merger will have on (…) (b) employment (…)“. But probably the most striking fact is that, the CompetC and Tribunal both have to assess a merger on the ground of public interest even if it appears that the notified operation does not give rise to any competition concerns. So this is probably why employment and other public interest issues are so often raised in merger cases in South Africa (for some very recent cases see here and here and also this one). Taking into account those precisions, what we have been highlighting as a very special case is not that special given the very nature  of article 12A of the Competition Act and somehow the Act itself which, inter alia, calls in section 2 relating to the purpose of the Act for the promotion and maintenance of competition in the Republic” in order (…) to promote employment and advance the social and economic welfare of South Africans (…)“.

3/ In Morocco, the Decree n° 2.14.652 which is an implementing regulation of the new law n° 104-12 on Freedom of Prices and Competition was adopted on the first of December (Her for Arabic readers). In this context, the Moroccan Competition Council (MCC) and German Federal Enterprise for International Cooperation (GIZ) launched a support program aiming at assisting the Moroccan institution in its effort to implement the newly adopted text. It is the second such project, after a twinning project , funded by the EU and implemented in 2009 between the MCC and the Bundeskartellamt for the purpose of strengthening the capacity of the Moroccan regulator.

*Co-editor, Developing World Antitrust

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