● <B>Monopoly: </B> A monopoly situation appears, according to the Bill, if 40% or more goods or services are supplied on the market by one enterprise or 70% are supplied by three or fewer companies.

However, such a situation of monopoly does not constitute a problem in itself. It becomes an issue only if the competition commission, responsible for making operators abide by the law, believes that the companies involved in a situation are exploiting it to prevent competition.

However, the commission will also have to make sure that consumers will not be the losers with the end of the monopoly situation. The commission will first have to make sure that substitutes exist or competitors are able to supply the goods before taking any action.

● <B>Merger: </B>The Competition Bill extends the notion of merger beyond the idea of shareholding. It could be any form of partnership where a company can have control on the policy of another.

A merger can become a problem if the partnership between two companies leads to a situation of monopoly ? that is, if the merger results in the control of at least 40% of goods and services. If the merger is believed to prevent any competition, then the commission will be responsible for taking action.

● <B>Horizontal agreement: </B>Two suppliers or dealers will not be authorised to agree on price fixing in a way that it hampers competition. Likewise, no one should be authorised to share markets or sources or restrict the supply of goods or services.

However, other non-collusive agreements can also be seen as a way of distorting or restricting competition especially if the parties to the agreement together supply or acquire 30% or more of the goods or services on the market.

● <B>Vertical agreement: </B>The law will also look into possible agreements between suppliers and dealers, i.e. vertical agreement. The recommendation made by a supplier to a reseller of goods or services for a minimum resale price is still possible ? as long as this recommendation is not binding.

● <B>Bid rigging: </B>The law makes it illegal for potential bidders to exchange any information on the price, terms or conditions of a bid or tender in response of an invitation for bids or tenders. Hence the commission will have to take action if it believes there is collusive agreement in such cases.

● <B>Cross-shareholding: </B> This notion is not present in the draft of the Bill but could be part of the version to be presented next Friday to the Cabinet. If a company has shares in different companies in one sector, a situation of monopoly may be created and may thus abuse its position.

REGULATORY BODY

<B>The prerogatives of the competition commission</B>

■ The Bill makes it clear that a competition commission will interfere only when it has reasonable grounds to believe that a company or group of companies are preventing competition. The final winner of this piece of legislation, if voted, should be the consumer. The commission will have to take action against any company that controls or intends to control the market. But, before resorting to extreme measures ? it can impose a financial penalty that shall not exceed 10 % of the company?s turnover ? the commission can give recommendations to try and remedy any obstacle to competition. In merger cases, the commission will be given the authorisation of requesting that a company withdraws.