Kiran Meetarbhan, Executive Director, Competition Commission of Mauritius (CCM), continued her interview to AfricaMoney on how the agency encourages the general public to come forward and denounce anti-competitive actions by enterprises, even as the CCM ensures that merit-based competition is upheld.
- 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 pricing or 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 there are 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.
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