Legal ExpertSpeak: Mauritian business landscape must ensure equal opportunities to compete
Kiran Meetarbhan, Executive Director, Competition Commission of Mauritius (CCM), spoke to AfricaMoney on how the agency encourages the general public to come forward and denounce anti-competitive actions by enterprises. (Image: CCM)
Kiran Meetarbhan, Executive Director, Competition Commission of Mauritius (CCM), spoke to AfricaMoney on how the agency strives to sensitize a cross section of audiences ranging from well-established businesses to university students on the benefits of a competitive environment. Our legal expert emphasized that competition awareness will help tomorrow’s decision makers to intuitively pick up on competition issues as they come across them, whether at their workplace, in the course of running their own businesses or as consumers.
Edited excerpts from an exclusive interview:
As an Executive Director of the Competition Commission of Mauritius(CCM), how do you promote and advertise the provisions of the Competition Act and the activities of the Commission?
The Competition Act 2007 (the Act) mandates and empowers the Executive Director of the CCM to promote and advertise the provisions of the Act as well as the activities of the Commission.
Given that competition law is relatively new in Mauritius, the CCM has invested significantly in competition advocacy in order to reinforce the status, value and the benefits of a competitive environment. Most importantly, the CCM reckons the importance of advocacy as the beneficial link that bridges the gap between our authority and the citizens, businesses and policy makers.
Ever since its inception in 2009, the Competition Commission has maximized efforts in tailoring its advocacy campaigns to different audiences, from well-established businesses to small and medium enterprises to regulatory bodies, legal professionals such as judges and lawyers, and even University students.
The CCM also uses mass media campaigns, such as regular interventions on the radio and broadcasting of competition-related television clips to sensitize the public of the benefits of competition. The CCM also believes in maintaining an open-door policy towards members of the public. When filing the complaints from the public, our officers will also explain to them the different provisions of the Competition Act. In fact, we take this opportunity to encourage the general public to come forward and denounce anti-competitive actions by enterprises while at the same time, explaining the protection afforded to informants.
The CCM is in the process of revamping its website with the aim of rendering our website more user-friendly and thus, more accessible to members of the public who will be in a better position to follow the evolution of our investigations and decisions taken by the Commissioners.
Can you tell us more about the workshops that CCM organizes?
The CCM organises annual workshops for the business community in the presence of renowned competition practitioners and competition scholars in order to advocate on key developments in competition law. During our workshops, we have focused on a diverse array of competition issues such as the benefits of leniency programmes, the need for preemptive action on the part of enterprises through competition compliance programmes. We have equally advocated the benefits of seeking the Commission’s guidance prior to the implementation of a merger in spite of having a voluntary merger notification framework.In November 2011 for instance, the CCM issued an Ex-Post Evaluation Report of its first investigation into the FMCGs sector (INV 001) which was released during its 2011 annual Competition Workshop that crowned its second year of existence. Organized in collaboration with the Bar Council of Mauritius and the CFA Society Mauritius, the workshop provided the opportunity to raise awareness on the benefits of our intervention.
On at least three occasions, workshops were organized by the CCM specifically for Judges of the Supreme Court of Mauritius. One of them was lead by Sir Christopher Bellamy, who is a Queen’s Counsel and was theFirst President of the EU Competition Appeals Tribunal. Professor Frederic Jenny, Judge at the Supreme Court of France (Cour de Cassation), Chairman of the OECD Competition Law and Policy Committee and Mr William Kovacic, former US FTC Commissioner, and Chairman of the International Competition Network, as well as ProfessorEleanox Fox, an eminent scholar in competition law, was equally invited by the CCM to conductspecialized training for our Judiciary.
In February,the CCM launched a national contest for students on the theme “The benefits competition brings to the Economy.” How has this competition helped to raise awareness and generate greater understanding of competition laws in Mauritius?
The school contest organised by the CCM targets secondary level students studying for Cambridge ‘A levels’ and undergraduate students in Mauritius. The objectives of this sensitization project are, first, to raise awareness of Competition law in Mauritius amongst students. Secondly, to generate greater understanding of competition law in Mauritius; and finally, to inform students of the benefit of the CCM’s enforcement of competition law.
Recognizing that the students of today will rise to be leaders of tomorrow, the CCM, through the contest, is aiming to breed the spirit of competition in the younger generations; thus, laying the foundation for new impetus to our competition culture. The CCM strongly believes that competition awareness will help tomorrow’s decision makers to intuitively pick up on competition issues as they come across them, whether at their workplace, in the course of running their own businesses or as consumers.
Similarly, the CCM believes that a thorough understanding of competition law and economics cannot be limited to textbooks and until and unless this knowledge is translated and used in practical cases, a mastery of the subject matter will not be achieved. The purpose of this contest is also to allow our students to apply their academic knowledge of competition law and economics to build a case on the benefits that competition brings to a country.
The number of applications received amounted to 65 and this speaks volumes of the strong interest and enthusiasm of our students towards competition related issues. The CCM can thus rightly say that the efforts invested towards creating a learned generation in competition matters will surely yield the desired results.
What is the purpose of the recent investigation launched by CCM into the supply of ‘Automatic Electronic Ignition Key and Related Synchronising Devices’?
The investigation launched in relation to the pricing practices for high technology car keys, automatic electronic ignition keys (AEIKs), and the access that alternative suppliers have to the aftermarkets for replacement of those high technology car keys concerned three main parties, all of which are dealers of new cars in Mauritius.
The purpose of the investigation was to determine whether the policies relating to replacement of ignition keys and synchronising devices practised by each of the three main parties went against the monopoly provisions of Section 46 of the Act through either excessive pricingor any ‘exclusionary abuse’ in the aftermarkets.
In this context, ‘exclusionary abuse’ may be defined as impeding access to the multiple markets by withholding the ‘codes’ required for synchronising/installation of replacement AEIKs.
The investigation did not establish breach of the Act by any of the main parties and this finding was endorsed by the Commission.
The Competition Commission is conscious of the growing importance of high-tech products to consumers. The specific characteristics of the market under investigation (i.e. the few competitive constraints to the technology used in AEIKs) meant that there could have been an increased likelihood of positions of entrenched market power compared to the aftermarket supply of ‘traditional’ ignition keys.
At the same time, however, it is also often wrongly assumed that high prices are the result of anti-competitive practices on behalf of enterprises. It should be borne in mind that the Competition Commission is not mandated by law to operate as a ‘price regulator’ but functions in order to facilitate and preserve the competition dynamics of markets. The CCM ensures that merit-based competition is upheld even as it gears the Mauritian business landscape towards protecting consumer welfare and ensuring equal opportunities to compete.
What are the challenges faced by the CCM?
Like any other enforcement agency, the CCM has faced several challenges in the past which it has successfully surmounted. The competition world is constantly evolving and this requires dynamism in competition enforcement, which also means that there are always new challenges that need to be addressed. I will give you some examples of challenges faced by the CCM.
One major area that has proved challenging for the CCM is enforcement in cases that involve cross border conduct having a potential anti-competitive effect within Mauritius. With the advent of globalization, companies now operate in several markets and establish production sites in several countries. Thus, in certain cases, assessment of the cross border nature of those activities or operations may be important. This can pose a significant challenge for national agencies in relation to information gathering, enforcement and monitoring. In that direction and as the law provides, the CCM is working with other agencies, regional and international competition networks to enhance such our capabilities in dealing with such issues.
Another challenge faced by the CCM is that notification of merger is not mandatory in Mauritius. Thus, enterprises that are merging are not under an obligation to notify the CCM. However, the CCM may launch a merger review and take appropriate actions against such merger if thereare reasonable grounds to believe that they could result in a substantial lessening of competition. Thus it remains a continuing challenge for the CCM to keep track of activities among enterprises that may qualify as mergers. The CCM is addressing this challenge through its advocacy initiative to sensitize businesses of the benefits of merger notification. The CCM constantly undertakes market watch to identify mergers/intended mergers, from publicly available information sources, which could be reviewable under the Act.
These challenges are by no means exhaustive list of the hurdles which lie in the path of the CCM’s effective enforcement of the Act. It will take time and effort to address the challenges that we encounter, but the CCM, despite being a relatively young institution, is determined to tackle the impediments for a better Mauritius.
What are the measures taken if the Commission decides that a business’s conduct is anticompetitive?
The Act provides for various remedies or directions that the Commission may impose on an enterprise in the event that the Commission determines that a particular conduct on the part of the latter is in breach of the Act. The appropriate remedy or direction will however depend on the nature of the anticompetitive conduct. Generally the CCM is empowered to impose what is usually termed as behavioural directions, structural directions and fines, in the cases where restrictive business practices have been established.
The CCM can require an enterprise to:
- terminate or amend an agreement;
- cease or amend a practice or course of conduct, including conducts in relation to prices;
- supply goods or services, or grant access to facilities;
- separate or divest itself of any enterprise or assets;
- provide the Commission with specified information on a continuing basis;
- desist from completion or implementation of the merger insofar as it relates to a market in Mauritius; and
- in case of collusive agreement, the CCM may also impose fines up to 10% of the turnover of the enterprise in Mauritius during the period of breach up to a maximum of 5 years.
The appropriate remedy to be imposed depends much on the nature of the conduct and how best it can be remedied.
In addition to the above, the Act provides enterprises the opportunity to offer undertakings to the CCM,which are commitments on their part on actions they would take to resolve the concerns of the CCM. If accepted, such undertakings would have the effect of a direction of the Commission and would be legally enforceable.
What are the future activities organized by the CCM aiming to inform Mauritians of the benefit of the CCM’s enforcement of competition law?
On the occasion of its fifth year of existence and in an endeavor to further advocate the competition law and policy in Mauritius, the CCM is currently working on a series of activities geared towards informing Mauritians on the benefits of enforcement of competition law.
The national contest mentioned above is one of those initiatives. Further to that, the CCM is working on a magazine that it intends to publish by the end of this year. The magazine will inter alia, describe the works of the CCM and its impact and the benefits of enforcement of the Act.
The CCM is also planning to organize a workshop late this year. The workshop will be a medium to inform stakeholders of the enforcement activities of the CCM and its benefits.
Further to that, we are planning to organize a set of localized initiatives to inform small businesses and the community at large on the competition law and its benefits – this may take the form of a ‘roadshow’.
In a continued effort of advocacy, the CCM will continue to educate Mauritians on the benefit of competition law through its annual reports, news on its website and public relation activities.