The Law on Competition in Cambodia, known as “LOC”, was promulgated on 05 October 2021, to govern any activities that prevent, restrict or distort competition through establishing and determining the authority of Cambodia Competition Commission (“CCC”) aiming at encouraging fair and honest business relations, increasing economic efficiency, encouraging new businesses, and helping consumers to access to high-quality, low-cost, diverse and versatile products and services. In this article we cover the key main points that the law covers, what needs to be done to adhere to the law and what consequences will be faced if it is not adhered too.
What is the definition and scope of the law on competition in Cambodia?
Competition means any acts carried out by any person operating the business in the market to get a greater number of customers, who consume by purchasing their goods and services, market share and market dominance.
This law applies to all persons conducting business activities, or any supporting business activities, which significantly prevent, restrict or distort competition in the market in the Kingdom of Cambodia regardless of whether the activities take place inside or outside the territory of the Kingdom of Cambodia.
The penalties under the law on competition are as follows:
- Written warnings;
- Revocation or withdrawal of business licenses;
- Monitories fines and
- and more, depending on the court ruling
What is a prohibited action under the law on competition in Cambodia?
Any action that are considered to restrict, restrain or distort competition shall be prohibited and it consists of the three types of activities as follows:
- Any type of agreement, either horizontal or vertical, on (i) fixing, controlling or maintaining the price of goods or services, (ii) preventing, restricting or limiting the quantity, type, developments of goods and services, (iii) allocating geographic areas between competitors and customers between competitors; and (iv) favoring one bidder in bids for a contract in private procurement (v) requiring a purchaser to resell purchased goods or services only within a defined geographic area, only to specified customers or specified categories of customers etc.;
- Any unlawful activities on dominant position in a market which includes (i) the requiring or inducing a supplier or customer not to deal with a competitor; (ii) refusing to supply goods or services to a competitor; (iii) selling goods or services on the condition that the purchaser purchases separate goods or services unrelated to the object of the contract; and (iv) selling goods or services below the cost of production etc.; and
- Any business combination which has or may have the effect of significantly preventing, restricting or distorting competition in a Market as may be determined by the CCC.
What are the exemptions under the law on competition in Cambodia?
The law on competition in Cambodia provides certain rules and conditions for the exemption by considering to the (i) significant identifiable technological, economic or social benefits; (ii) benefits significantly outweigh the effects caused by preventing, restricting, and distorting competitions; and (iii) non elimination of the competition on any important aspects of goods or services etc.
Who is in charge of the law on competition in Cambodia?
The CCC, led by the Minister of Commerce, with the involvement of other relevant ministries and the Directorate General in charge of competition (“Directorate”), shall be competent to initiate or to accept any complaint on any violation of the LOC, and to decide on the matter based on the investigation result produced by the investigating officer of the Directorate.