Business

Regulation without enforcement

Thinking about building your dream home in a prominent real estate compound? Brace yourself for a mountain of rules that, surprise, primarily benefit the authority. RAJUK's official regulations? Think of them as background noise. Disobey real estate company rules, and you might lose your roof. Meanwhile, local "tough guys" across town enforce their own "law" with truly more consistency than the country's actual rules, which exist for show. And guess what? The big fish in other industries do the same thing, taking full advantage of law enforcement whenever possible.

The Bangladesh Competition Act 2012 ensures fair competition, consumer protection, and market innovation. It created the Bangladesh Competition Commission (BCC) to combat anti-competitive practices like collusion, cartels, and dominance abuse. The act aims to prevent restrictive agreements, curb predatory power, safeguard consumers, and foster economic growth through transparent markets.

However, the BCC, formed in 2016, consists solely of administrative bureaucrats, lacking experts in law or economics -- a clear non-compliance with Section 7(3) of the act. Calls for reconstitution demand specialists to ensure the commission operates effectively. After all, fair competition needs referees well-versed in the rulebook.

For eight years, the BTRC was the sole regulator addressing competition, introducing the Significant Market Power (SMP) concept for one MNO and one tower company. However, this failed to support smaller players. In mobile financial services (MFS), the once-praised market leader is now seen as a competition barrier. Commodity discussions focus more on talk than action. Despite concerns, the central bank or commerce ministry hesitates to intervene while the BCC and other regulators remain silent. This inaction harms consumer welfare, allowing unchecked dominance in key markets and stifling fair competition, ultimately limiting consumer choices and innovation.

Many, including regulators, often misunderstand the purpose of competition law. During my tenure as CEO of a telecom company, the leading telecom operator was designated as having significant market power. However, some, including BTRC officials, argued the dominance was a result of being "smarter" and making faster strategic investments, like their fibre deal with Bangladesh Railway, questioning why success warranted regulatory intervention. Despite the SMP declaration, the leading MNO's market share remained unaffected.

This reflects a fundamental misinterpretation of competition law. It doesn't penalise success but prevents undue dominance that harms consumers and marginalises smaller competitors. Currently, other operators struggle to profit despite significant investments. If unchecked, Bangladesh risks following India's path, where 12 telecom providers consolidated into four, potentially shrinking further to two major players. This would allow the dominant player to dictate prices, harming consumers and deterring investors. Protecting smaller operators ensures a fair market, benefiting consumers and encouraging healthy competition and investment.

Competition authorities worldwide impose hefty fines to curb anticompetitive practices. The EU penalised Google, Microsoft and Intel billions while in the US, Apple paid $400 million for e-book price-fixing and airlines faced collusion fines. India's CCI enforces fair competition, fining Google $162 million (Android) and $113 million (Play Store), DLF $110 million for unfair homebuyer terms, and automakers $400 million for restricted spare parts.

Strengthen the BCC by appointing independent experts in law, economics, and industry. Establish transparent investigation guidelines, penalise violations swiftly, and encourage regulator collaboration. Conduct market studies to remove barriers, foster competition and safeguard consumer interests by ensuring fair prices and genuine choices through strict monitoring.

The BCC remains nothing more than a showpiece -- loud when needed but powerless in reality. While other countries actively crack down on big players, we are still debating if market dominance is just "smart business". Fair prices? Real innovation? Consumer protection? Keep dreaming. And let's not forget that both the biggest players in telecom and MFS are backed by NGOs, which aligns with the interests of today's NGO-minded advisors. So, it's safe to say the BCC will stay in its deep, comfortable sleep for a long time.

The author is president of the Institute of Cost and Management Accountants of Bangladesh and founder of BuildCon Consultancies Ltd

Comments

Regulation without enforcement

Thinking about building your dream home in a prominent real estate compound? Brace yourself for a mountain of rules that, surprise, primarily benefit the authority. RAJUK's official regulations? Think of them as background noise. Disobey real estate company rules, and you might lose your roof. Meanwhile, local "tough guys" across town enforce their own "law" with truly more consistency than the country's actual rules, which exist for show. And guess what? The big fish in other industries do the same thing, taking full advantage of law enforcement whenever possible.

The Bangladesh Competition Act 2012 ensures fair competition, consumer protection, and market innovation. It created the Bangladesh Competition Commission (BCC) to combat anti-competitive practices like collusion, cartels, and dominance abuse. The act aims to prevent restrictive agreements, curb predatory power, safeguard consumers, and foster economic growth through transparent markets.

However, the BCC, formed in 2016, consists solely of administrative bureaucrats, lacking experts in law or economics -- a clear non-compliance with Section 7(3) of the act. Calls for reconstitution demand specialists to ensure the commission operates effectively. After all, fair competition needs referees well-versed in the rulebook.

For eight years, the BTRC was the sole regulator addressing competition, introducing the Significant Market Power (SMP) concept for one MNO and one tower company. However, this failed to support smaller players. In mobile financial services (MFS), the once-praised market leader is now seen as a competition barrier. Commodity discussions focus more on talk than action. Despite concerns, the central bank or commerce ministry hesitates to intervene while the BCC and other regulators remain silent. This inaction harms consumer welfare, allowing unchecked dominance in key markets and stifling fair competition, ultimately limiting consumer choices and innovation.

Many, including regulators, often misunderstand the purpose of competition law. During my tenure as CEO of a telecom company, the leading telecom operator was designated as having significant market power. However, some, including BTRC officials, argued the dominance was a result of being "smarter" and making faster strategic investments, like their fibre deal with Bangladesh Railway, questioning why success warranted regulatory intervention. Despite the SMP declaration, the leading MNO's market share remained unaffected.

This reflects a fundamental misinterpretation of competition law. It doesn't penalise success but prevents undue dominance that harms consumers and marginalises smaller competitors. Currently, other operators struggle to profit despite significant investments. If unchecked, Bangladesh risks following India's path, where 12 telecom providers consolidated into four, potentially shrinking further to two major players. This would allow the dominant player to dictate prices, harming consumers and deterring investors. Protecting smaller operators ensures a fair market, benefiting consumers and encouraging healthy competition and investment.

Competition authorities worldwide impose hefty fines to curb anticompetitive practices. The EU penalised Google, Microsoft and Intel billions while in the US, Apple paid $400 million for e-book price-fixing and airlines faced collusion fines. India's CCI enforces fair competition, fining Google $162 million (Android) and $113 million (Play Store), DLF $110 million for unfair homebuyer terms, and automakers $400 million for restricted spare parts.

Strengthen the BCC by appointing independent experts in law, economics, and industry. Establish transparent investigation guidelines, penalise violations swiftly, and encourage regulator collaboration. Conduct market studies to remove barriers, foster competition and safeguard consumer interests by ensuring fair prices and genuine choices through strict monitoring.

The BCC remains nothing more than a showpiece -- loud when needed but powerless in reality. While other countries actively crack down on big players, we are still debating if market dominance is just "smart business". Fair prices? Real innovation? Consumer protection? Keep dreaming. And let's not forget that both the biggest players in telecom and MFS are backed by NGOs, which aligns with the interests of today's NGO-minded advisors. So, it's safe to say the BCC will stay in its deep, comfortable sleep for a long time.

The author is president of the Institute of Cost and Management Accountants of Bangladesh and founder of BuildCon Consultancies Ltd

Comments

ধর্ষণের মামলার বিচার দ্রুত-যথাযথ হবে, কঠোর হচ্ছে আইন

ধর্ষণ মামলার বিচার কেবল দ্রুতই নয়, বিচারটা যাতে নিশ্চিত ও যথাযথ হয় সে লক্ষ্যে নারী ও শিশু নির্যাতন দমন আইন কঠোর করা হচ্ছে বলে জানিয়েছেন আইন উপদেষ্টা ড. আসিফ নজরুল।

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