Model Law on Competition: Substantive Possible Elements for a Competition Law, Commentaries and Alternative Approaches in Existing Legislations (Unctad Series on Issues in Competition Law and Policy)

115 Pages·2007·0.5 MB·English

by  United Nations

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT

MODEL LAW ON COMPETITION

UNCTAD Series on Issues in Competition Law and Policy

Substantive Possible Elements for a competition law, commentaries
and alternative approaches in existing legislations

UNITED NATIONS
New York and Geneva, 2007
NOTE

The designations employed and the presentation of the material do not imply the
expression of any opinion whatsoever on the part of the United Nations secretariat
concerning the legal status of any country, territory, city or area, or of its authorities, or
concerning the delimitation of its frontiers or boundaries.

Material in this publication may be freely quoted or reprinted, but acknowledgement
is requested, together with a reference to the document number. A copy of the publication
containing the quotation or reprint should be sent to the UNCTAD secretariat.

TD/RBP/CONF.5/7/Rev.3
UNITED NATIONS PUBLICATIONS
Sales No. E-07.II.D.7
ISBN: 978-92-1-112716-4

Copyright © United Nations, 2007
All rights reserved

ii
CONTENTS

NOTE..........................................................................................................................................................ii
Introduction.................................................................................................................................................v
PART I Substantive Possible Elements for a Competition Law..................................................
TITLE OF THE LAW: Elimination or control of restrictive business practices:.....................................3
CHAPTER I Objectives or purpose of the law..........................................................................................3
CHAPTER II Definitions and scope of application...................................................................................3
CHAPTER III Restrictive agreements or arrangements............................................................................3
CHAPTER IV Acts or behaviour constituting an abuse of a dominant position of market power............4
CHAPTER V Notification..........................................................................................................................4
CHAPTER VI Notification, investigation and prohibition of mergers affecting concentrated markets...5
CHAPTER VII The relationship between competition authority and regulatory bodies, including
sectoral regulators..................................................................................................................................6
CHAPTER VIII Some possible aspects of consumer protection...............................................................7
CHAPTER IX The Administering Authority and its organization.............................................................7
CHAPTER X Functions and powers of the Administering Authority........................................................7
CHAPTER XI Sanctions and relief............................................................................................................7
CHAPTER XII Appeals.............................................................................................................................8
CHAPTER XIII Actions for damages........................................................................................................8
PART II Commentaries on Chapters of the Model Law and alternative approaches in existing
legislation...........................................................................................
TITLE OFTHE LAW: Elimination or control of restrictive business practices:....................................11
COMMENTARIES ON THE TITLE OF THE LAW AND ALTERNATIVE APPROACHES IN
EXISTING LEGISLATIONS...............................................................................................................11
CHAPTER I Objectives or purposes of the law.......................................................................................13
COMMENTARIES ON CHAPTER I AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Objectives or purposes of the law............................................................................13
CHAPTER II Definitions and scope of application.................................................................................15
COMMENTARIES ON CHAPTER II AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Definitions and scope of application.......................................................................16
CHAPTER III Restrictive agreements or arrangements..........................................................................21
COMMENTARIES ON CHAPTER III AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Restrictive agreements or arrangements.................................................................22
CHAPTER IV Acts or behaviour constituting an abuse of a dominant position of market power..........33
COMMENTARIES ON CHAPTER IVAND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Acts or behaviour constituting an abuse of a dominant position of market power..34
CHAPTER V Notification........................................................................................................................45
iii
COMMENTARIES ON CHAPTER V AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Notification..............................................................................................................46
CHAPTER VI Notification, examination and prohibition of mergers affecting concentrated markets..49
COMMENTARIES ON CHAPTER VI AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Notification, examination and prohibition of mergers affecting concentrated
markets..................................................................................................................................................50
CHAPTER VII The relationship between competition authority and regulatory bodies, including
sectoral regulators................................................................................................................................55
CHAPTER VIII Possible aspects of consumer protection.......................................................................64
COMMENTARIES ON CHAPTER VIII AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Possible aspects of consumer protection.................................................................64
CHAPTER IX The Administering Authority and its organization...........................................................65
COMMENTARIES ON CHAPTER IX AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS The Administering Authority and its organization...................................................65
CHAPTER X Functions and powers of the Administering Authority......................................................68
COMMENTARIES ON CHAPTER X AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Functions and powers of the Administering Authority............................................68
CHAPTER XI Sanctions and relief..........................................................................................................72
COMMENTARIES ON CHAPTER XI AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Sanctions and relief.................................................................................................72
CHAPTER XII Appeals...........................................................................................................................75
COMMENTARIES ON CHAPTER XII AND ALTERNATIVE APPROACHES IN EXISTING
LEGISLATIONS Appeals.....................................................................................................................75
CHAPTER XIII Actions for damages......................................................................................................76
COMMENTARIES ON CHAPTER XIII AND DIFFERENTAPPROACHES IN EXISTING
LEGISLATIONS Actions for damages.................................................................................................76
ANNEXES...........................................................................................
iv
Introduction
(i) The Intergovernmental Group of Expert Meeting on Competition Law and Policy, at its
seventh session held from 31 October to 2 November 2006, requested the UNCTAD secretariat to
continue publishing as a non sessional document and to include in its website a further revised and up-
dated version of the Model Law on Competition, on the basis of submissions to be received from
member States no later than 31 January 2007.
(ii) As directed by the seventh session, (TD/RBP/Conf.5/7) has been prepared on the basis of
the written comments on the Model Law received from member States in 2006 and 2007. 1 It constitutes
a revised version of the 2004 version of the Model Law on Competition, (TD/RBP/Conf.5/7/Rev.2, Sales
No. 04.II.D.26), specifically Part II entitled “Draft commentaries to possible elements for a competition
law of a Model Law or Laws”. However, some comments which were received did not request specific
changes to Part II but raised general issues or made suggestions about how to proceed with future
revision of the Model Law, as summarized below. Peru has highlighted the similarities between the
Model Law and Peruvian legislation with respect to several areas and has also referred to the differences
between European and United States enforcement approaches. Serbia has commented that the Model
Law may be considered to be a comprehensive and successful model as it has managed to reconcile all
suggestions and recommendations made by experts from developed countries and countries in transition,
as well as those countries (regardless of the phase of their development) in which the concept and
awareness of the need to protect competition is in its initial stages. Serbia has suggested that special
importance should be attached to relations between regulatory bodies (including sectoral regulators) and
competition authorities, the advocacy role of competition authorities and, the detailed definition of
regulation, as well as provisions relating to recovery of damages in suits before the courts. The EU
Commission has made no specific comments on the Model Law, but has suggested that UNCTAD
schedule a meeting to discuss it, with a view to assessing where it need updating/amending. Hungary
has also suggested that the Model Law be revised in a two-step process: in the first stage, ideas of
UNCTAD Member States and relevant organizations relating to the revision might be built into the
Model Law so as to provide a comprehensive illustration of all the issues to examine, which would then
provide inspiration for ultimate suggestions regarding what might or might not be useful to mention
about competition laws in the further revised version of the Model Law.

v
This page intentionally left blank

vi
PART I

Substantive Possible Elements for a Competition Law
This page intentionally left blank
TITLE OF THE LAW:

Elimination or control of restrictive business practices:
Antimonopoly Law; Competition Act

and geographical lines within which specific groups
of goods, buyers and sellers interact to establish
CHAPTER I
price and output. It should include all reasonably
Objectives or purpose of the law
substitutable products or services, and all nearby
To control or eliminate restrictive agreements or competitors, to which consumers could turn in the
arrangements among enterprises, or mergers and short term if the restraint or abuse increased prices
acquisitions or abuse of dominant positions of by a not insignificant amount.
market power, which limit access to markets or
otherwise unduly restrain competition, adversely II. Scope of application
affecting domestic or international trade or
economic development. (a) Applies to all enterprises as defined above, in
regard to all their commercial agreements, actions or
transactions regarding goods, services or intellectual
CHAPTER II
property.
Definitions and scope of application

(b) Applies to all natural persons who, acting in a
I. Definitions
private capacity as owner, manager or employee of

an enterprise, authorize, engage in or aid the
(a) “Enterprises” means firms, partnerships,
commission of restrictive practices prohibited by the
corporations, companies, associations and other
law.
juridical persons, irrespective of whether created or

controlled by private persons or by the State, which
(c) Does not apply to the sovereign acts of the State
engage in commercial activities, and includes their
itself, or to those of local governments, or to acts of
branches, subsidiaries, affiliates or other entities
enterprises or natural persons which are compelled
directly or indirectly controlled by them.
or supervised by the State or by local governments

or branches of government acting within their
(b )“Dominant position of market power” refers to a
delegated power.
situation where an enterprise, either by itself or

acting together with a few other enterprises, is in a
position to control the relevant market for a
particular good or service or group of goods or CHAPTER III
services. Restrictive agreements or arrangements

(c) “Mergers and acquisitions” refers to situations I. Prohibition of the following agreements
where there is a legal operation between two or between rival or potentially rival firms, regardless
more enterprises whereby firms legally unify of whether such agreements are written or oral,
ownership of assets formerly subject to separate formal or informal:
control. Those situations include takeovers,
concentrative joint ventures and other acquisitions (a) Agreements fixing prices or other terms of sale,
of control such as interlocking directorates. including in international trade;

(d) “Relevant market” refers to the general (b) Collusive tendering;
conditions under which sellers and buyers exchange
goods, and implies the definition of the boundaries (c) Market or customer allocation;
that identify groups of sellers and of buyers of
goods within which competition is likely to be (d) Restraints on production or sale, including by
restrained. It requires the delineation of the product quota;
3