a tripartite report - Unctad

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of appreciably preventing, restraining or
distorting competition; and
(b) the agreement results or is likely to result in
following ways:
(i)
production or distribution;
(ii) by promoting technical or economic
progress;
(iii)
the allocation of resources; or
(iv) by protecting the environment; and the
agreement:
(v) prevents, restrains or distorts competition
no more than is reasonably necessary to
(vi)
the agreement outweigh the detriments
caused by preventing, restraining or
distorting competition.
Section 12(2) of the Act holds that the FCC may
grant a block exemption, either unconditionally
or subject to such conditions as the FCC sees
cumstances
that the agreement does not contravene
Section 9 or has not, or is not likely to
have, the effect of appreciably preventing, restraining
or distorting competition. The period
ceeding
5 years.
It is noteworthy that conduct that is subject of
block exemption is one which would not offend
Section 9 of the Act, which deals with anticompetitive
agreements that are hard core cartels/
per se anticompetitive. This is clear from the
wording in Section 12(2). However, there appears
to be a contradiction under Section 12(4) which
states that:
An agreement exempted under this section is not
prohibited by section 8 or 9 during the period of the
exemption.
Where a block exemption was granted in contravention
of Section 12 (2) of the FCA, it would simply
have to be withdrawn. After the withdrawal,
companies would have to adapt their agreements
to the new legal situation. Based upon this read-
51
ing, subsection 4 actually does not contradict subsection
2 of Section 12 of the FCA.
Under PART VI of the Act (rule 59–61), the FCCPR
have provided guidance on the procedures of
handling exemptions. Furthermore, Section 68(1)
of the Act stipulates that the FCC shall conduct a
public inquiry before varying or revoking an exemption.
2.3.2 Misuse of Market Power
The concept of dominance or substantial market
power limits the scope of application of most
unilateral conduct laws. Making dominance or
substantial market power a prerequisite for intervention
under unilateral conduct laws serves as a
itive
conduct 51 . Misuse of market power, or abuse
of dominance, is a central theme in competition
policy administration. The FCA contains the respective
prohibition in Section 10. While the subheading
under Section 10 denotes the wording
“Misuse of market power”, the actual legislative
text introduces “a person with a dominant position
in a market and stipulates that such person
shall not use his position of dominance if the object,
effect or likely effect of the conduct is to appreciably
prevent, restrict or distort competition.”
The words “misuse” or “market power” have not
-
the Act:
(6) A person has a dominant position in a market if
both (a) and (b) apply:
materially restrain or reduce competition in
and
(b) the person’s share of the relevant market
exceeds 35 per cent.
The provision ties both unilateral conduct and
market share i.e. the conduct/behavioural and
structural test are mutually inclusive. It is noteworthy
that unlike some legislations that deal with
“collective dominance”, dominance under the FCA
legislative intention or perhaps the lacuna thereof
may be dealt with under Section 8(1) which ap-
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