With the enforcement of the Competition Order’s Anti-Competitive Agreements prohibition beginning January 1, the Competition Commission Brunei Darussalam (CCBD) recorded an increase in businesses’ interests to learn about the Order.
The CCBD recently commended the initiative by Muara Maritme Services Sdn Bhd (MMS) in organising an awareness session involving more than 55 members of the management team and staff, to learn and discuss competition law particularly, procurement practices to ensure their business conducts are adhered to the Competition Order.
The CCBD Executive Secretariat began the dialogue session with an introduction on the concept and the importance of competition in economic growth and the key prohibitions of the Competition Order.
The session elaborated on how competition benefits everyone – businesses, consumers and the economy as a whole. It encourages businesses to compete for customers. Buyers of goods and services – from individual shoppers to businesses – benefit from competitive prices and having more choice and better quality. Competition results in open, dynamic markets, featuring increased productivity, innovation and better value. When there is a lack of competition, for example, where there is a price fixing cartel or a company abusing a dominant position, both businesses and consumers suffer. The cost of doing business goes up. While all businesses must comply with competition law, it is also there to protect businesses from anti-competitive behaviour by others.
The session explained the key anti-competitive conducts prohibited under the Order, including the four serious offences under the Anti-Competitive Agreements prohibition, namely (i) price fixing; (ii) market sharing; (iii) supply limitation; and (iv) bid rigging.
The dialogue session discussed in detail bid rigging prohibition and the importance of procurers to always be wary of collusive behaviours by bidders or potential bidders that may distort competition in procurement process through pre-determination of a bid winner. Bid rigging harms procurement process as it has the impact of undermining the objective of achieving value for money in the procurement of goods and services.
The session shed light on the different forms of bid rigging including (i) bid suppression where potential bidders refrain from participating in a tender to ensure the pre-determined winner can win the tender; (ii) complementary bidding where bidders deliberately submit high tender prices to establish a notion that the pre-determined winner’s price is competitive; and (iii) bid rotation where bidders take turns to win tender.
It was underscored that the prevention of bid rigging by procurement officials is crucial towards upholding competition in procurement process. Tenders should be carefully designed to minimise the risks of any unfair and anti-competitive bidding conducts through preventive measures such as setting clear criteria to allow for a fair competition process; and including a warning on sanction for infringement of the Competition Order in tender documents.
Concerns arisen from suspicious behaviour and statement of bidders are advised to be reported to the CCBD by completing a formal complaint form, with substantial evidence, either via email or through the CCBD website at www.ccbd.gov.bn.
The session saw an active dialogue discussing matters pertaining to application of the law, including some business practices are prevalent in the market such as sole distributorship arrangements, sub-contracting in projects and licensing issues. Based on the issues discussed, it was concluded that not all competition related issues can be resolved through applying the Competition Order. Many issues raised require policy and regulations reviews, to be coherent with the competition principles and to ensure a competitive process can be achieved with the desirable outcome.