OECD kpcdb

1. Competition Order, 2015

The Competition Order, 2015 (the “Order”) was enacted in January 2016.

 

The Order regulates anticompetitive agreements (Chapter 2, agreements etc. preventing, restricting or distorting competition), abuse of dominant position (Chapter 3, abuse of dominant position), and anti-competitive mergers (Chapter 4, mergers).

 

General exclusion: Section 10 (application of Part) (4) of the Order stipulates that nothing in Part 3 (Competition) shall apply to any activity carried on by, any agreement entered into or any conduct on the part of -

 

a)  the Government;

b)  any statutory body; or

c)  any person acting on behalf of the Government or that statutory body, as the case may be, in relation to that activity, agreement or conduct.

 

Extra-territorial application: Section 10 (1) sets forth that notwithstanding that any practice or action arising out of such agreement, such dominant position, an anticipated merger or a merger is outside Brunei Darussalam, this Part (part 3) shall apply to such party, agreement, abuse of dominant position, anticipated merger or merger if it infringes or has infringes or will infringe any of the prohibitions under Part 3. 

 

2. Competition Commission of Brunei Darussalam

 

The Competition Commission of Brunei Darussalam (the “Commission”) is in the process of being set up and will be the authority that enforces competition in Brunei Darussalam. 

 

Some of its functions include to: (i) enhance efficient market conduct and promote overall productivity and competitiveness of markets in Brunei; (ii) promote and sustain competition in markets in Brunei, (iii) to promote a strong competitive culture and environment throughout the economy, (iv) to act as advocate for competition matters, (v) to educate and promote public understanding of competition, (vi) to advise the government or other public authority on national needs and policies in respect of matters concerning competition in Brunei, (vii) to act internationally as the body representative of Brunei in respect of competition matters. 

 

The Commission has the power to issue guidelines on how it will interpret and give effect to the provisions on the enforcement part of the Act. 

 

In addition to competition law, the Commission will also enforce the Consumer Protection Order .

 

Organisational structure of the Commission: As per Section 3 of the Order, the Commission consists of a Chairman and such other members, not being less than 6 or more than 12, appointed by His Majesty the Sultan and Yang Di-Pertuan, by notification published in the Gazette. Section 6 sets forth that His Majesty the Sultan and Yang Di-Pertuan shall, by notification published in the Gazette, appoint a Director who shall be responsible for the overall administration and management of the functions, activities and day-to-day affairs of the Commission for the purposes of carrying out the provisions of this Order. Section 7 sets forth that the Minister in charge of the general competition matters (the “Minister”) may, with the approval of His Majesty the Sultan and Yang Di-Pertuan, appoint authorised officers to carry into effect any specific provisions of this Order or any regulations made thereunder. For purposes of an investigation under this Order, the Minister may appoint any other person to be an authorised officer. 

 

Section 8 (Direction by Minister) prescribes that the Minister may, in writing, give to the Commission directions of a general character, consistent with the provisions of this Order, relating to the performance of the functions and powers of the Commission and the Commission shall give effect to such directions. 

 

Other regulators with competition powers: As per Section 10 (2) of the Order, in so far as Part 3 (Competition) applies to an industry or a sector of industry that is subject to the regulation and control of another regulatory authority -

 

a)  the exercise of powers by that other regulatory authority shall not be construed as derogating from the exercise of powers by the Commission; and

b)  the exercise of powers by the Commission shall not be construed as derogating from the exercise of powers by that other regulatory authority.

 

As per Section 10 (3), the Minister may, with the approval of His Majesty the Sultan and Yang Di-Pertuan, make regulations for the purpose of co ordinating the exercise of powers by the Commission under this Part (Part 3) and the exercise of powers by any other regulatory authority referred to in Section 10 (2), and may, in particular, make regulations to provide for the procedure to be followed -

 

a)  in determining in a particular case or category of cases whether the Commission should exercise its powers under this Part or the other regulatory authority should exercise its powers; and

b)  where the Commission and the other regulatory authority may exercise their respective powers concurrently or conjunctively. 

 

As per Section 68 (Co operation between Commission and other regulatory authorities on competition matters), the Commission may enter into any agreement with any regulatory authority for the purposes of:

 

a)  facilitating co-operation between the Commission and the regulatory authority in the performance of their respective functions in so far as they relate to issues of competition between undertakings;

b)  avoiding duplication of activities by the Commission and the regulatory authority, being activities involving the determination of the effects on competition of any act done, or proposed to be done; and

c)  ensuring, as far as practicable, consistency between decisions made or other steps taken by the Commission and the regulatory authority in so far as any part of those decisions or steps consists of or relates to a determination of any issue of competition between undertakings.

 

Competition advocacy: As per Section 62 (power to conduct market review), the Commission may, on its own initiative or upon the request of the Minister, conduct a review into any market in order to determine whether any feature or combination of features of the market prevents, restricts or distorts competition in the market. The market review includes a study into the structure of the market concerned; the conduct of undertakings in the market; the conduct of suppliers and consumers to the undertakings in the market; or any other relevant matters. According to Section 63, upon conclusion of the market review, the Commission shall publish a report of its findings and recommendations. The report of the Commission shall be made available to the public.

 

International co operation: Brunei Darussalam has signed international co operation agreements or MoUs regarding competition law matters: ASEAN, ASEAN-Australia-New Zealand FTA, and RCEP (in negotiation).

 

3. Investigation

Initiation of investigation: As per Section 35 the Commission may conduct an investigation if there are reasonable grounds for suspecting that the section 11 prohibition (anti-competitive agreement) or the section 21 prohibition (abuse of dominant position) has been infringed, or the section 23 prohibition (merger) will be infringed or has been infringed by any merger. For the purpose of the investigation under Section 35, the Commission may appoint an authorised officer to conduct the investigation. 

 

Powers of investigation: As per Section 36 (power when conducting investigation), the Commission or an authorised officer may, by notice in writing to any person, require that person to produce to the Commission or the authorised officer a specified document, or to provide the Commission or the authorised officer with specified information, which the Commission or the authorised officer considers relates to any matter relevant to the investigation. 

 

As per Section 37 (Power to enter premises without warrant), in connection with an investigation any authorised officer and such other person as the Commission has authorised to accompany the authorised officer (authorised person) may enter any premises.

 

As per Section 37 (2), no authorised officer and no authorised person or person required by the authorised officer respectively, shall enter any premises in the exercise of the powers under this section unless the authorised officer has given the occupier of the premises a written notice which

 

a)  gives at least 2 working days' notice of the intended entry;

b)  indicates the subject matter and purpose of the investigation; and

c)  indicates the nature of the offences created by Part IV.

 

As per Section 38 (Power to enter premises under warrant), any authorised officer may apply to a court for a warrant and the court may issue such a warrant if it is satisfied that:

 

a)  there are reasonable grounds for suspecting that there are on any premises documents the production of which has been required under section 36 or 37; and which have not been produced as required; 

b)  there are reasonable grounds for suspecting that there are on any premises documents which the Commission or the authorised officer has power under Section 36 to require to be produced; and if the documents were required to be produced, they would not be produced but would be concealed, removed, tampered with or destroyed; or

c)  an authorised person, an authorised officer or a person required by the authorised officer has attempted to enter the premises in the exercise of his powers under Section 37 but has been unable to do so and that there are reasonable grounds for suspecting that there are on the premises documents the production of which could have been required under that section.

 

Failure to comply with investigation: From Section 53 to Section 58 of the Order, it is stipulated that the followings would constitute an offense: any failure to provide access to records, or giving false or misleading information, evidence or document, or destruction, concealment, mutilation or alteration of records, or obstruction of authorised officer, or tipping off, or threat and reprisal. 

 

As per Section 64, any person who commits an offence under the Order for which no penalty is expressly provided is liable on conviction to a fine not exceeding $10,000, imprisonment for a term not exceeding 12 months or both.

 

Procedural fairness: The Commission provides the party/parties under investigation for an antitrust infringement with opportunities to consult with the Commission with regard to significant legal, factual or procedural issues during the course of the investigation. Parties have the right to be heard and present evidence before the imposition of any sanctions or remedies for having committed an antitrust infringement.

 

4. Remedies and sanctions

 

Remedies and administrative sanctions: According to Section 42 (1) where the Commission has made a decision that -

 

a)  any agreement has infringed the section 11 prohibition;

b)  any conduct has infringed the section 21 prohibition;

c)  any anticipated merger, if carried into effect, will infringe the section 23 prohibition; or

d)  any merger has infringed the section 23 prohibition,

 

the Commission may give an order to such person as it considers appropriate to bring the infringement or the circumstances referred to in paragraph (c) to an end. Also, if necessary, it requires that person to take such action as specified in the direction to remedy, mitigate or eliminate any adverse effects of such infringement or circumstances and to prevent the recurrence of such infringement or circumstances.

 

As per Section 42 (2) (e), where the decision is that any agreement has infringed the section 11 prohibition, any conduct has infringed the section 21 prohibition or any merger has infringed the section 23 prohibition, to pay to the Commission such financial penalty in respect of the infringement as the Commission may determine.

 

Under Section 42 (3), for the purpose of Section 42 (2) (e), the Commission may impose a financial penalty only if it is satisfied that the infringement has been committed intentionally or negligently. Section 42 (5) sets forth that no financial penalty fixed by the Commission under this section may exceed 10 percent or such other percentage of such turnover of the business of the undertaking in Brunei Darussalam for each year of infringement for such period, up to a maximum of 3 years, as the Minister may, by order published in the Gazette, prescribe.

 

The Commission may also accept commitments from an undertaking to refrain from doing anything as the Commission considers appropriate, thus bringing the investigation to an end without making any finding of infringement or imposing a penalty. 

Where the Commission determines that an undertaking has failed, without reasonable excuse, to comply with a direction, undertaking or commitment accepted by the Commission, the Commission may apply to the High Court for an order requiring the undertaking to make good the default within a specified time. 

 

5. Appeal

As per Section 59 (1), any party to an agreement in respect of which the Commission has made a decision, any person in respect of whose conduct the Commission has made a decision or any party involved in a merger in respect of which the Commission has made a decision, may appeal within the prescribed period to the Competition Appeals Tribunal against, or with respect to, that decision.

 

As per Section 59 (2), any person, other than a person referred to in (1), to whom the Commission has given a direction (interim measures or remedies or financial penalty), may appeal within the prescribed period to the Tribunal against, or with respect to, that direction.

 

For the purpose of hearing any appeal referred to in Section 59 (1), there shall be a Competition Appeal Tribunal consisting of not more than thirty members appointed, from time to time, by the Minister on the basis of their ability and experience in industry, commerce or administration or their professional qualifications or their suitability otherwise for appointment. The Minister may remove any member of the Tribunal from office without assigning any reason. 

 

This is a full merits review appeal.

 

6. Private enforcement 

As per Section 67 (rights of private action), for any person who suffers from loss or damage, caused directly by an infringement of the section 11 prohibition, the section 21 prohibition or the section 23 prohibition shall have a right of action for relief in civil proceedings in a court under this section against any undertaking which is or which has, at the material time, been a party to such infringement. This is a standalone claim.