Friday, April 16, 2004

a new draft competition bill?

this one's for all the Singaporeans -- and anyone else who gives a damn, really -- who read this blog: the Ministry of Trade and Industry is putting out the draft of a brand new competition law. (no, it's not what it sounds like; it's supposed to regulate anti-competitive behaviour, rather than enforce competitive behaviour, which is what i must confess immediately jumped to my mind.) more details can be found here, while the actual Draft Bill is a pdf document here.

i have a couple of quick, preliminary responses to it. (i doubt i will have enough to say to make a formal comment/recommendation in the style that MTI wants. see their site for more details. i just don't have the time or expertise to write up something that involves a table of contents.) i'm no expert -not even close- to the language of the law, so there's bound to be some confusion, albeit much reduced by the fact that said Draft Bill isn't really in lawyer-speak.

i don't object, in principle -and in general- to the creation of what amounts (in my mind) to an anti-trust law in Singapore. i think it's a good thing to protect against the actions of cartels and monopolies, particularly in our relatively small economy. i also don't think that their IP protection laws are going to get in the way - the solution is simple: if they're afraid that long patents and monopoly over technology will have an adverse effect on competition, then shorten the period where owners of IP rights have exclusive right to them. -shrugs- that's one ongoing debate in the US, for sure. however:

(1) the exemption for "any entity carrying out activities on behalf of the Government or statutory bodies" bothers me a little - i want to know who they mean by this. some examples would be nice. i mean, clearly they don't mean the postal service. if they do indeed mean the GLCs, then i take issue. the whole point of a competition law, in my mind, is to force our huge GLCs to make way for perhaps more efficient, more nimble players in the domestic market. the other standard exemptions i don't think i would take umbrage at -- defence and so forth. my reaction to those exemptions are 'doh.'

(2) i'm not sure i like the desire not to criminalise anti-competitive behaviour. ok, maybe criminal penalties are too severe for what is really a diffuse harm/concentrated benefit situation (as Mill would say, there is no 'assignable blame', no direct harm to one person, but rather general harm to society at large). it's not like fraud, for example. but surely the threats of fines and possible litigation are not enough to restrain a true monopolist? surely they'll make enough (a) by the time the Commission gets around to slapping fines on them and (b) after they get done paying the fines that the said fines will not be enough. they're certainly not punitive. 10% of turnover up to a maximum of three years isn't nothing, but what about the companies that are going to be able to sit out a three year maximum fine period?

i am, of course, thinking of major monopolists like our friend Bill Gates and Microsoft. the odds of such a situation arising in our little island are fairly low - ie a monopolist with the power to harm as many people as Gates does through higher prices and restricted quantities. however, wouldn't it be better for us to have the possibility of 'structural remedies' not in the form of litigation, as MTI suggests, but in the power to break up monopolies and cartels, like creating little Baby Bells out of the Big Bell in the US?

my two cents. perhaps there'll be more on this later. leave comments if you have them =) perhaps we can get up a joint response to MTI for this Bill.


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