FCA Guide Booklet
Tuesday 20 May 2008 - 08:36:50
August 2007
The Fair Competition Act (FCA), 2003
The Fair Competition Act, 2003 (FCA) came as an Act to promote and protect effective competition in trade and commerce, to protect consumers from unfair and misleading market conduct and to provide for other related matters.
Who will administer the FCA, 2003?
The Fair Competition Commission (FCC) and the Fair Competition Tribunal (FCA) have been set up to administer the FCA. In the first instance, most of the work will be done by the Commission. The Tribunal will hear appeals against the decisions of the Commission.
Overall purpose
The overall purpose of the new law is to remove obstacles to competition. This should have four effects:
(a) more efficiency for the economy
(b) lower prices for consumers
(c) more innovation
(d) faster economic growth.
What is the job of the Commission?
The Commission is there to promote competition. It has three main tasks:
(a) to study markets to identify obstacles to competition
(b) to intervene to prevent companies harming competition, and
(c) to act as an advocate for competition in government circles
How does the commission decide which cases to take up?
There are five possible ways in which the object of an investigation may be chosen:
(a) internal research of the Commission
(b) a complaint from a company
(c) a proposal from consumers
(d) the direction of a Minister
(e) a proposal of an official regulatory body.
How will consumers be affected?
Consumers are able to suggest topics and markets for the Commission to investigate. They can also play a valuable role in providing the Commission with evidence of markets that are not working well.
Consumers can also send in their views when the Commission announces an inquiry. When the Commission starts an inquiry, it will always put an advertisement in the newspaper.
How will business be affected?
All businesses are affected from sole traders through to large companies.
The law focuses on behaviour that harms competition, whether it takes the form of an agreement, a merger and or any other practice.
There are a few exceptions when it comes to agreements. The law does not apply to any agreements that:
(a) only affect sales abroad
(b) relate to employment or
(c) require adherence to technical standards.
Do you need to notify the Commission in advance about what you are doing ?
The general answer is `no’. The main exception is large-scale mergers, where the law requires you to notify in advance and that will mean you cannot lawfully go ahead with the merger until the Commission has approved it.
Are there any indications of how the Commission will interpret ‘harm competition’?
The Commission’s conclusion will be the result of economic analysis. One firm piece of guidance is that companies will not generally be seen as capable of `harming competition’ if their market share is less than 35 per cent. Bear in mind however that defining the market for the purpose of competition analysis can be a complex matter and not always straightforward.
Are there any exceptions to the test of ‘harming competition’?
Yes. There are four types of agreement that are always unlawful and for which the Commission does not need to conduct any economic analysis:
(a) price fixing
(b) collective boycott
(c) agreed output restrictions
(d) collusive bidding or tendering
Are there any factors that the Commission takes into account in addition to competition?
In the case of agreements and mergers (but not other practices) the Commission is allowed to take into account three other factors, which are:
(a) economic efficiency
(b) technical or economic progress
(c) protection of the environment
The Commission has to weigh up any harm to competition against any benefits.
Commission Authority Procedures[
FCC
The Commission’s procedures vary according to the task in hand. When the Commission is carrying out a study of a sector or a market or is operating as an ‘advocate’ of competition, its procedures are fairly informal. On the other hand, when it is investigating behaviour that may harm competition – and hence its conclusions may form the basis for taking action against companies – its procedures are much more formal (as set out in the Commission’s External Rules). One feature of these rules is the way in which the Commission takes care to protect the confidentiality of commercial information it gets from companies.
FCA
The Tribunal’s procedures are similar to those of a court. It can consider an appeal against a conclusion of the Commission on any basis. Its own verdict can take any one of five forms:
(a) confirm the conclusion of the Commission
(b) set it aside
(c) amend it
(d) send the case as a whole back to the Commission for it to consider again
(e) send one aspect of the case back to the Commission
Powers of the Fair Competition Commission
There are two main actions that can be taken as a result of an investigation by the Commission:
1) Require companies to take actions that will remedy the competition problem; this
could include:
(a) stopping behaviour that was damaging competition
(b) selling assets
(c) providing information
2) Apply a fine which has to be within the range 5 – 10 per cent of turnover
While the Commission would normally take action after its investigation is complete, it can require companies to take the requisite action during the course of the investigation. It would only do this if there was an imminent danger of substantial commercial damage being suffered by other companies.
In addition to the powers just described the Commission can also require a company that has been found guilty of harming competition to pay compensation to other companies that have suffered from its behaviour.
To bring about the requisite action by companies the Commission does not necessarily have to take the legal route of making an order – which can be enforced through the courts. Where it is likely to be effective, it can alternatively reach an agreement with a company about the changes in its behaviour that are needed.
( http://www.competition.or.tz/info.php?extend.116 )
Tuesday 20 May 2008 - 08:36:50
August 2007
The Fair Competition Act (FCA), 2003
The Fair Competition Act, 2003 (FCA) came as an Act to promote and protect effective competition in trade and commerce, to protect consumers from unfair and misleading market conduct and to provide for other related matters.
Who will administer the FCA, 2003?
The Fair Competition Commission (FCC) and the Fair Competition Tribunal (FCA) have been set up to administer the FCA. In the first instance, most of the work will be done by the Commission. The Tribunal will hear appeals against the decisions of the Commission.
Overall purpose
The overall purpose of the new law is to remove obstacles to competition. This should have four effects:
(a) more efficiency for the economy
(b) lower prices for consumers
(c) more innovation
(d) faster economic growth.
What is the job of the Commission?
The Commission is there to promote competition. It has three main tasks:
(a) to study markets to identify obstacles to competition
(b) to intervene to prevent companies harming competition, and
(c) to act as an advocate for competition in government circles
How does the commission decide which cases to take up?
There are five possible ways in which the object of an investigation may be chosen:
(a) internal research of the Commission
(b) a complaint from a company
(c) a proposal from consumers
(d) the direction of a Minister
(e) a proposal of an official regulatory body.
How will consumers be affected?
Consumers are able to suggest topics and markets for the Commission to investigate. They can also play a valuable role in providing the Commission with evidence of markets that are not working well.
Consumers can also send in their views when the Commission announces an inquiry. When the Commission starts an inquiry, it will always put an advertisement in the newspaper.
How will business be affected?
All businesses are affected from sole traders through to large companies.
The law focuses on behaviour that harms competition, whether it takes the form of an agreement, a merger and or any other practice.
There are a few exceptions when it comes to agreements. The law does not apply to any agreements that:
(a) only affect sales abroad
(b) relate to employment or
(c) require adherence to technical standards.
Do you need to notify the Commission in advance about what you are doing ?
The general answer is `no’. The main exception is large-scale mergers, where the law requires you to notify in advance and that will mean you cannot lawfully go ahead with the merger until the Commission has approved it.
Are there any indications of how the Commission will interpret ‘harm competition’?
The Commission’s conclusion will be the result of economic analysis. One firm piece of guidance is that companies will not generally be seen as capable of `harming competition’ if their market share is less than 35 per cent. Bear in mind however that defining the market for the purpose of competition analysis can be a complex matter and not always straightforward.
Are there any exceptions to the test of ‘harming competition’?
Yes. There are four types of agreement that are always unlawful and for which the Commission does not need to conduct any economic analysis:
(a) price fixing
(b) collective boycott
(c) agreed output restrictions
(d) collusive bidding or tendering
Are there any factors that the Commission takes into account in addition to competition?
In the case of agreements and mergers (but not other practices) the Commission is allowed to take into account three other factors, which are:
(a) economic efficiency
(b) technical or economic progress
(c) protection of the environment
The Commission has to weigh up any harm to competition against any benefits.
Commission Authority Procedures[
FCC
The Commission’s procedures vary according to the task in hand. When the Commission is carrying out a study of a sector or a market or is operating as an ‘advocate’ of competition, its procedures are fairly informal. On the other hand, when it is investigating behaviour that may harm competition – and hence its conclusions may form the basis for taking action against companies – its procedures are much more formal (as set out in the Commission’s External Rules). One feature of these rules is the way in which the Commission takes care to protect the confidentiality of commercial information it gets from companies.
FCA
The Tribunal’s procedures are similar to those of a court. It can consider an appeal against a conclusion of the Commission on any basis. Its own verdict can take any one of five forms:
(a) confirm the conclusion of the Commission
(b) set it aside
(c) amend it
(d) send the case as a whole back to the Commission for it to consider again
(e) send one aspect of the case back to the Commission
Powers of the Fair Competition Commission
There are two main actions that can be taken as a result of an investigation by the Commission:
1) Require companies to take actions that will remedy the competition problem; this
could include:
(a) stopping behaviour that was damaging competition
(b) selling assets
(c) providing information
2) Apply a fine which has to be within the range 5 – 10 per cent of turnover
While the Commission would normally take action after its investigation is complete, it can require companies to take the requisite action during the course of the investigation. It would only do this if there was an imminent danger of substantial commercial damage being suffered by other companies.
In addition to the powers just described the Commission can also require a company that has been found guilty of harming competition to pay compensation to other companies that have suffered from its behaviour.
To bring about the requisite action by companies the Commission does not necessarily have to take the legal route of making an order – which can be enforced through the courts. Where it is likely to be effective, it can alternatively reach an agreement with a company about the changes in its behaviour that are needed.
( http://www.competition.or.tz/info.php?extend.116 )