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OVERVIEW

The Brunei Competition Order 2015, was gazetted in 2015 with the objectives to promote market efficiency and consumer welfare towards economic development in Brunei Darussalam.

On 1 August 2017, the Competition Commission of Brunei Darussalam was established as an independent body that is mandated to promote business competition in Brunei economic landscape through the enforcement of the Competition Order 2015. In line with the objectives of the Order, the Competition Commission is expected to oversee competition matters in the country through performing the duties entrusted under the Order. This includes adjudicating work on anti-competitive cases and imposing penalties on companies found to infringe the Competition Order 2015.

The Department of Competition and Consumer Affairs was also established on 1 August 2017 under the Department of Economic Planning and Development, to serve the Competition Commission as their investigative and administrative arms. The Department is responsible in carrying out Commission’s functions such as advocacy, receiving complaints and conducting market reviews.

The introduction of the Competition Order 2015 and the establishment of Competition Commission of Brunei Darussalam underscores the efforts of the Government of His Majesty the Sultan and Yang Di-Pertuan Negara Brunei Darussalam in achieving a sustainable economic growth in line with the economic goals of Wawasan (Vision) Brunei 2035.

The Competition Order 2015 will be enforced in phases starting with the prohibition of anti-competitive agreements and practices. This phased approach serves to give relevant stakeholders sufficient time to prepare for the orderly enforcement of this Order.              

 

COMPETITION ORDER 2015              

Competition Order 2015 is a primary legislation to promote and protect competition in markets in Brunei Darussalam.  The Order was passed in January 2015. The order has specific provision for phase implementation with some parts of the Order already commencing on 1 August 2017.

The Order has the objectives to enhance economic efficiency and to improve consumer welfare through prohibiting and preventing unfair and unhealthy commercial conducts. Specifically, it prohibits three key conducts which are

 
     1. Anti Competitive agreements

     2. Abuse of dominant power

     3. Anti competitive mergers

The Competition Order 2015 will be enforced in phases starting with the prohibition of Anti-Competitive Agreements. This phased approach serves to give all parties sufficient time to prepare for the orderly enforcement of this Order.

The Order is aimed to provide incentives for businesses to be innovative, efficient and productive; provide equal business opportunities; and create a pro-business and pro-investment climate for better Foreign Direct Investment (FDI) outlook.

KEY PROHIBITIONS

                 1. Anti-competitive Agreements (Section 11)

The Order prohibits agreements between undertakings, which have the object or effect of preventing, distorting or restricting competition within           Brunei Darussalam. These may be oral or written agreements and need not necessarily be legally binding (e.g. unwritten agreements’).

This includes agreements or decisions made by undertakings and associations such as agreements among competing firms to fix prices, control supply, share market or bid rig. Such agreements are also known as hard-core cartel:

i. Price fixing: Agreement made between businesses to fix, control or maintain the prices of goods and services that are charged onto consumers in order to reap very high profits. It may also happen indirectly, which is when businesses set similar credit terms and discounts.

ii. Supply control: This refers to the agreement made between businesses to limit the quantity of goods and services provided which will indirectly increase price.

iii. Market sharing: Agreement made between businesses to each sell to different segments of a market, either in terms of geographical area or size or type of consumer. Consequently, competition will be eliminated as each has its own allotted segments all to itself and as a result, consumers’ choices will be restricted.

iv. Bid rigging: This refers to agreement made between businesses to raise prices to purchasers through manipulating procurement process which then eliminate competition through pre-determined winner.

 

2. Abuse of Dominant Position (Section 21)

A firm is considered dominant when it has substantial market power/share which can be determined first by defining which market the firm falls under. Becoming dominant in the market itself is not prohibited. However, it is illegal when the firm abuses its power to engage in conducts that intent or effect the prevention, restriction or distortion of competition in Brunei Darussalam such as:

i. Predatory Pricing: This occurs when a firm sets their prices unreasonably low with the intent of driving competitors out of the market which would then enable the firm to set a higher price in the long run.

ii. Exclusionary dealings: This occurs when a dominant firm trades with another firm and restricts with whom the other firm trades with.

iii. Refusal to/restricting supply: This occurs when a firm intentionally refuse to or limit its supply so that prices would increase and so will  its profits.

 

3. Anti-Competitive Mergers (Section 23)

A merger occurs when two previously independent entities join together, as result of lasting joint venture or acquisitions. Not all mergers will give rise the competition issues as it may be pro-competitive or competitively neutral to the relevant market. Section 23 of the Order covers mergers, which have resulted, or expected to result, in a substantial lessening of competition in Brunei Darussalam market and absence of net economic efficiencies.

In Competition Order 2015, merger notification is voluntarily – no statutory requirement to notify mergers or anticipated mergers to the Commission. However parties may notify their agreement if they have concerns on whether the merger has infringed or whether the anticipated mergers may infringed the Order.
 

Click here to view the Competition Order 2015.

BENEFITS OF COMPETITION LAW
BUSINESS & ECONOMY
CONSUMER
KEY PROHIBITIONS
ANTI-COMPETITIVE AGREEMENTS
ABUSE OF DOMINANT POSITION

MERGER

     ​
COMPETITION ADVOCACY AND COMPLIANCE
HANDBOOK ON COMPETITION POLICY AND LAW FOR BUSINESS 2013
COMPETITION LAW IN ASEAN
 REGIONAL COOPERATION
 POST - 2015
  
        

CONTACT US

Tel No: +673 2233344 ext 230/341/362

Email: brunei.competition@jpke.gov.bn