OECD kpcdb

1. Scope

 

As per Section 23, mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Brunei Darussalam for goods or services are prohibited. A merger occurs if the (i) two or more undertakings previously independent of one another, merger; (ii) one of more persons acquire direct or indirect control of the whole or part of one or more undertakings; (iii) the acquisition of assets (including goodwill) to lead to the replacement of one undertaking by another in the business.

 

Excluded mergers: As per Section 24, the section 23 prohibition shall not apply to any merger specified in the Fourth Schedule of the Order. According to the Fourth Schedule, the section 23 prohibition shall not apply to merger-

 

a)  approved by any Minister or regulatory authority (other than the Commission) pursuant to any requirement for such approval imposed by any written law; approved by the Autoriti Monetari Brunei Darussalam established by section 3 of the Autoriti Monetari Brunei Darussalam Order, 2011 pursuant to any requirement for such approval imposed under any written law; or under the jurisdiction of any regulatory authority (other than the Commission) under any written law relating to competition, or code of practice relating to competition issued under any written law.

b)  involving any undertaking relating to any specified activity as defined in paragraph 6(2) of the Third Schedule (the supply of waste management services, the supply of scheduled bus services under the Road Traffic Act and the license to supply goods and services specified in the Schedule to the Monopolies Act).

c)  if the economic efficiencies arising or that may arise from the merger outweigh the adverse effects due to the substantial lessening of competition in the relevant market in Brunei Darussalam.

 

2. Notification

Notification of anticipated merger (ex-ante notification): As per Section 26 (1), a party to an anticipated merger shall notify the Commission of the anticipated merger and apply to it for a decision.

 

As per Section 26 (3) where the Commission proposes to make a decision that the section 23 prohibition will be infringed by an anticipated merger, if carried into effect, the Commission shall give written notice to the party who applied for a decision on the anticipated merger and the party may, within 14 days of the date of the notice, apply to the Minister for the anticipated merger, if carried into effect, to be exempted from the section 23 prohibition on the ground of any public interest consideration.

 

Notification ex-post of a merger: Section 27 (1) stipulates that a party involved in a merger which applies for the merger to be considered under this section shall (i) notify the Commission of the merger; and (ii) apply to it for a decision.

 

Section 27 (3) prescribes that where the Commission proposes to make a decision that the section 23 prohibition has been infringed, the Commission shall give written notice to (i) the party who applied for a decision on the merger; or (ii) the party who applied for a decision on the anticipated merger which was carried into effect or where that party no longer exists, the merged entity. The party or merged entity so notified by the Commission may, within 14 days of the date of the notice, apply to the Minister for the merger to be exempted from the section 23 prohibition on the ground of any public interest consideration.

 

Section 27 (6) sets forth that the Minister may revoke the exemption of a merger granted under Section 27 (3) if he has reasonable grounds for suspecting that the information on which he based his decision was incomplete, false or misleading in a material particular.

3. Assessment

No Guidelines have yet been issued by the Commission on how it will interpret and apply the legal provisions.

4. Commitments, remedies and sanctions

Commitments: As per Section 31, the Commission may, at any time before making a decision, accept from such person as it thinks appropriate, a commitment to take or refrain from taking such action as it considers appropriate for the purpose of remedying, mitigating or preventing the substantial lessening of competition or any adverse effect which (i) may be expected to result from the anticipated merger, if carried into effect; or (ii) has resulted or may be expected to result from the merger.

 

Remedies and sanctions:

Where the decision of the Commission is that any anticipated merger, if carried into effect, will infringe the section 23 prohibition it may prohibit and require any parties to any agreement that is directly related and necessary to the implementation of the merger (which would result from the anticipated merger being carried into effect) to modify or terminate the agreement, notwithstanding the agreement is excluded under paragraph 10 of the Third Schedule; and requiring any person concerned with any conduct that is directly related and necessary to the implementation of the merger (which would result from the anticipated merger being carried into effect} to modify or cease that conduct, notwithstanding the conduct is excluded under paragraph 10 of the Third Schedule;

 

Section 42 (2) (d) also stipulates that where the decision is that any merger has infringed the section 23 prohibition (i) requiring the merger to be dissolved or modified in such manner as the Commission may direct; (ii) requiring any parties to any agreement that is directly related and necessary to the implementation of the merger to modify or terminate the agreement, notwithstanding that the agreement is excluded under paragraph 10 of the Third Schedule; and (iii) requiring any person concerned with any conduct that is directly related and necessary to the implementation of the merger to modify or cease that conduct, notwithstanding that the conduct is excluded under paragraph 10 of the Third Schedule. As mentioned in Chapter 1 on remedies and sanctions, financial penalties may also be applicable.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).