Competition clauses in new Telecom Law - The Fine Print, Legal & Tax Insight

Fair competition seems to be one of the forgotten aspects of the new telecommunications law promulgated this October.

While most industry observers focus on such important elements of the law as the spectrum, length and conditions of concessions and so on, the clauses governing competition are just as important, not least from the consumers’ point of view.

In line with the general provision of article 36 of the Constitution, the new law (in chapter 11) stipulates that operators are not allowed to practise unfair conduct against other operators that could affect competition.

Based on my experience as a telecoms legal consultant, many companies do try to obtain benefits through unfair competition. Even governments often wink at controversial regulations in order to favour their own national telecoms companies (in which those governments are part-shareholders) against other companies. One of the commonest unfair practices is to restrict marketing campaigns or to set floor-pricing regulations. Or, much more brutal, permits to build new towers or to use land may be denied, thus slowing down the expansion of competing networks.

So the provisions in chapter 11 of the new law restraining telecoms companies from predatory pricing, cartel agreements with vendors/operators and so on came as a pleasant surprise, and appear to signal the intent of the authorities to create a productive and competitive market. If these provisions are applied in practice, a serious competitive market where consumers and subscribers can enjoy lower prices and better service could be the result.

At the moment, the legal system of Myanmar has no competition law (and no modern consumer protection laws). The only provision in this regard can be found in the Constitution, whose article 36 states, “the Union shall prevent acts that injure public interests through monopolisation and manipulation of prices by any individual or group with intent to endanger fair competition in economic activities”. What is needed now is to ensure that no company can take advantage of the lack of regulation.

More rules are expected soon to create a comprehensive regulatory framework. But so far, the only apparent sanction is that the regulatory body will only be entitled to warn alleged offenders to desist from bad conduct. It remains to be seen what would happen if the company concerned persists in the same unfair practices.

Alessio Polastri is managing partner of Polastri Wint & Partners. Karina Peng is a partner of Polastri Wint & Partners.

source: The Myanmar Times
http://www.mmtimes.com/index.php/business/8584-competition-clauses-in-new-telecom-law-the-fine-print-legal-tax-insight.html