WHAT IS COMPETITION ?
TheGlossary of Industrial Organisation Economics and Competition Lawof OECD defines competition as “a situation in a market in which firms or sellers independently strive for the patronage of buyers in order to achieve a particular business objective, e.g., profits, sales and/or market share. Competition in this context is often equated with rivalry. Competitive rivalry between firms can occur when there are two firms or many firms. This rivalry may take place in terms of price, quality, service or combinations of these and other factors which customers may value”. For the companies, the chances of winning or losing favour of customers are equal and reciprocal.
Competition Lawtherefore organises the conditions under which rivalry between economic operators is practised.
The competition policy is known, in different countries, under the name “antitrust” policy, “anti monopoly” policy or fair trade policy.
WHY IS COMPETITION IMPORTANT?
Competition is seen as a key process which compels companies to be efficient and to market at the least price a wide range of products and services; this is translated by profit for the consumer. It also contributes to dynamic efficiency for innovation, technological change and technical progress.
- It offers reduced prices and widens the choice of the consumer ;
- it ensures maximum economic efficiency both statically (equal prices at marginal costs) and dynamically (an optimum rate of innovation and/or adoption of new technologies ultimately);
- it makes it possible to overcome obstacles which prevent countries from benefiting from the opportunities offered by the liberalization of trade.
However, a clear distinction should be made between anti-competitive practices which are under the jurisdiction of the National Competition Committee and unfair competition which is under the jurisdiction of ordinary courts.
WHAT IS THE POSITION OF COMPETITION IN THE ECONOMIC POLICY OF CAMEROON?
Competition is one of the basic principles of the economic policy in Cameroon. Competition law compliance is guaranteed by the Investment Charter. All the laws made in the economic domain since 1990 guarantee the free practice of competition in all sectors.
WHICH ARE THE BASIC TEXTS THAT GOVERN COMPETITION
- Law No. 98/013 of 14 July 1998 on competition ;
- Decree No. 2005/1363/PM of 6 May 2005 to fix the composition and procedures for the functioning of the National Competition Committee ;
- CEMAC Community texts.
WHAT IS THE NATIONAL COMPETITION COMMITTEE?
The National Competition Committee is the competition Authority in Cameroon. Its mission is to see to it that, all the economic operators of the various sectors respect competition rules. Established by law No. 98/013 of 14 July 1998 on competition whose organizational and operating procedures are laid down by decree No. 2005/1363/PM of 6 May 2005, it is attached to the Ministry in charge of competition issues. Presently, it is the Ministry of Trade.
An authority in charge of competition is imperative in any market economy country. The names vary from one country to another. We can list :
Competition Authority (France), Competition Board (Tunisia, Algeria, and Madagascar), Antitrust Division (USA), Anti Monopoly Division (China), Egyptian Competition Agency, Monopolies and Prices Commission (Kenya), National Competition and Consumption Committee (Burkina Faso), Fair Competition Commission (Tanzania) …
WHERE IS IT SITUATED?
The head office of the National Competition Committee is in Yaoundé, on the 2ndfloor of the Cameroonian Red Cross building (behind the former buildings of the Ministry of Public Health).
B.P. 5082, Yaoundé-Nlongkak
Telephone: 22 09 43 37
WHAT ARE ITS ATTRIBUTIONS?
The National Competition Committee is in charge of:
- examining and expressing opinion on all matters on national competition policy as well as on draft laws and regulations that may have an impact on the practice of competition in the domestic market;
- investigating, detecting, pursuing and punishing competition law infringements ;
- providing its expertise to courts as far as decision-making on competition is concerned ;
- inspecting mergers and acquisitions (of companies).
The Committee shall hear claims lodged by :
- any public or private natural or legal person concerned ;
- regulatory agencies on competition infringements committed in their respective sectors ;
- finally, the Committee can on its own decide on any issue that it has known in all the sectors of the national economy.
WHAT IS ITS COMPOSITION?
Chaired by a personality appointed by the Prime Minister, it is made up of fifteen (15) members representing :
- public administrations (MINCOMMERCE, MINIMIDT, MINPMEESA, MINJUSTICE, MINEFI) ;
- socio – professional organisations (CCIMA, GICAM, SYNDUSTRICAM, CHAGRI, SCIEC, chartered accountant association and bar association);
- the civil society especially consumer associations.
WHAT ARE THE OFFENCES WHICH ARE IN ITS AREA OF JURISDICTION?
Anti- competitive practices, that is to say, all practices that would effectively prevent, distort or restrict significantly competition in the domestic market. These may include:
- anti-competitive agreements between firms (pricing agreement or collusive tendering concerning invitations to tender for example);
- abuse of dominant positions (price fixing, discriminatory pricing, predatory pricing, refusal to sell or provide service, limiting production, etc.;
- concentrations (mergers and acquisitions). As they may distort competition, concentrations should be controlled by the competition authority that may prohibit those that reduce competition or may result in reducing competition.
SANCTIONS WHICH MAY BE IMPOSED BY THE COMMITTEE
The Committee may :
- issue injunctions to stop the offending practices, possibly accompanied by penalties and payment of damages and interest for abuse of dominant position;
- impose fines of around 50% of the profit and 20% of sales (particularly in respect of agreement). Failure to pay the fine within 60 days from the date of notification shall be punished by a penalty whose amount per day of delay is equal to one hundredth of the original fine;
- cancel the agreement in issue in whole or in part in mergers and acquisitions.
The above fines are doubled if the offence is repeated.
In addition, the Committeemay also order the temporary closure of the company in the following cases:
1- non-compliance with injunctions by the Committee concerning the abuse of dominant position or mergers and acquisitions ;
2- failure to pay the fine.
ARE THE DECISIONS OF THE COMMITTEE SUBJECT TO APPEAL?
The decisions of the Committee may be appealed to the Court of First Instance of the Committee's registered office (Yaoundé - Administrative Centre). The offender may challenge the decision of the Commission by letter to the President within 45 days of notification of the decision. If no agreement is reached with the Committee within fifteen (15) days of receipt of the letter of objection, the case may be brought before the Court of First Instance, whose decision is final.
The Committee may award damages.Its decisions are published in two widely circulated newspapers and broadcast through radio at the expense of the offender.
NB : The appeal does not suspend enforcement.
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