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Framework for Presentation of Individual Action Plans by Economies

1. How well IAPs for competition policy and for deregulation conform to the format guidelines that were agreed to by the CTI and subsequently the SOM last year; and
2. What improvements members intend to make to plans over the coming year. Examples of improvements might include the adoption of new or improved competition laws, putting in place other policies to improve competitive pressures in markets and the implementation of new deregulation initiatives.

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1. Competition Policy

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OBJECTIVE

APEC economies will enhance the competitive environment in the Asia-Pacific region by introducing or maintaining effective and adequate competition policy and/or laws and associated enforcement policies, ensuring the transparency of the above and promoting cooperation among APEC economies, thereby maximizing, inter alia, the efficient operation of markets, competition among producers and traders, and consumer benefits.

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GUIDELINES

Each APEC economy will:

1. review its respective competition policy and/or laws and the enforcement thereof in terms of transparency;

2. implement as appropriate technical assistance in regard to policy development, legislative drafting, and the constitution, powers and functions of appropriate enforcement agencies; and

3. establish appropriate cooperation arrangements among APEC economies.

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¢º. DEREGULATION

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OBJECTIVE

APEC economies will

1. promote the transparency of their respective regulatory regimes; and
2. eliminate trade and investment distortion arising from domestic regulations which not only impede free and open trade and investment in the Asian Pacific region but also are more trade and/or investment restricting than necessary to fulfill a legitimate objective.

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COMPETITION POLICY

Australia	Canada	Chile
Chinese Taipei	Hong Kong, China	Indonesia
Japan	Republic of Korea	Malaysia
Mexico	New Zealand	Papua New Guinea
People's Republic of China	Republic of the Philippines	Singapore
United States of America

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DEREGULATION

Australia	Brunei Darussalam	Canada
Chile	Chinese Taipei	Hong Kong, China
Indonesia	Japan	Republic of Korea
Mexico	New Zealand	Papua New Guinea
People's Republic of China	Republic of the Philippines	Singapore
United States of America

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Australia has a sophisticated competition policy which has undergone significant development in recent years. Competitive conduct rules are set out in the Trade Practices Act 1974 (a Federal law) and the Competition Code (State and Territory law). These rules prohibit specific types of anti-competitive conduct namely:

• anti-competitive agreements (eg collusive price fixing)
• misuse of substantial market power
• exclusive dealing
• resale price maintenance
• anti-competitive acquisitions.

The competitive conduct rules are administered by a general regulator, the Australian Competition and Consumer Commission (ACCC) which is charged with enforcing the rules, private action is also available.

Australian competition policy also extends to:

• laws for access to essential facilities
• laws for price oversight of firms with substantial market power
• principles for review and reform of anti-competitive regulation
• principles for structural reform of public monopolies
• principles for competitive neutrality between government owned and privately owned businesses.

These constituent elements inter-lock to create a cohesive policy fostering market access, with the goal of increasing efficiency through greater competition.

From 21 July 1996, the competitive conduct rules will cover all business activity in the Australian economy including government business activity. Conduct is exempted from these rules on a case-by-case basis:

• an administrative process managed by the ACCC whereby conduct can be protected on public benefit grounds. These exemptions are reviewable by the ACCC
• a parliamentary process whereby legislation can protect conduct.

Australia's competition laws are widely available. Further, the ACCC publishes guidelines on specific aspects of the law (including administrative procedures) and on its enforcement priorities.

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Objective

To enhance the competitive environment in the Asia-Pacific region by introducing or maintaining effective and adequate competition policy and/or laws and associated enforcement policies, ensuring transparency of the above, and promoting cooperation among APEC economies, thereby maximizing, inter alia, the efficient operation of markets, competition among producers and traders, and consumer benefits.

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Australia will:

Remain committed to maintaining effective and transparent competition policy and laws and associated enforcement policies.

Develop a timetable to review legislative exemptions to the competitive conduct rules.

Continue to provide assistance in regard to policy development and technical issues to APEC economies as requested (subject to resource availability).

In addition to existing mutual assistance agreements with the United States and New Zealand, pursue negotiations with the United States and Taiwan on cooperation in the enforcement of competition laws.

Continue to establish cooperation agreements with other APEC countries as appropriate. Seek to encourage the exchange of information on developments between APEC economies and develop a forum for dialogue to deepen understanding of competition policy within APEC.

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COMPETITION POLICY

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CURRENT STATUS

Canada has had legislation restricting anti-competitive behaviour since 1889. The current legislation, the Competition Act, is one of the key framework business laws in Canada. The Act is administered by the Competition Bureau, the Canadian competition authority. Active enforcement of the Act has created a competitive marketplace in Canada, allowing for lower costs and prices, greater incentives for product innovation and development and better quality goods and services. The Act is regularly scrutinized in order to ensure that it remains abreast of domestic and international developments. It was last substantially amended in 1986.

The Act applies to most Canadian industries and levels of trade, establishing basic principles for the conduct of business to promote competition and efficiency in the Canadian economy. The Act contains provisions addressing both:

1. criminal offenses, including conspiracy, bid-rigging, discriminatory and predatory pricing, price maintenance, misleading advertising, and deceptive marketing practices; and
2. matters subject to civil review, such as mergers, abuse of dominant position, refusal to deal, consignment selling, exclusive dealing, tied selling, market restriction, and delivered pricing.

Transparency of the competition policy regime in Canada has been well-served through the advisory opinion program (which has been used extensively by businesses looking for the competition authority's views on proposed arrangements or transactions) and the availability of advance ruling certificates, which are more binding than advisory opinions.

Enforcement transparency is also enhanced through public distribution of a variety of written materials, including pamphlets, bulletins, and enforcement guidelines.

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INDIVIDUAL ACTIONS

1. Legislative Amendments to the Competition Act

In June of 1995, public consultations aimed at updating the Competition Act were undertaken. As a result of these consultations, Bill C-67, an Act to amend the Competition Act, was introduced in Parliament on November 7, 1996. The Bill died on the Order Paper when Parliament was prorogued. The Bill dealt with the following subjects:

• notifiable transactions;
• misleading advertising and deceptive marketing practices;
• regular price claims;
• prohibition orders; and
• deceptive telemarketing solicitations.

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2. Regulatory Reform

The Competition Bureau is currently participating in the Government of Canada's deregulation and privatization initiatives to ensure the efficient provision of goods and services in Canada. Recent sectoral initiatives include: telecommunications, transportation, electricity, energy, financial services, and postal services. In the longer term, Canada is committed to continuing to adapt its competition regime as necessary to accommodate the changing domestic and international environment.

3. International Technical Assistance

Canada has a long history of offering technical assistance to other economies, including some APEC members, bilaterally through the OECD, the World Bank, and UNCTAD. Canada will continue to offer such assistance, in coordination with other APEC economies, the OECD, the World Bank, and UNCTAD.

4. International Cooperation

Canada has been active in seeking effective international cooperation. The 1995 Canada-U.S. Agreement sets a framework for bilateral cooperation for the enforcement of competition law. This agreement has proven successful in a number of international prosecutions. Canada and the European Union are currently in the process of negotiating a similar enforcement cooperation arrangement.

Reflecting a long-standing commitment to the international aspects of competition policy, Canada has participated and will continue to participate in the discussion of international competition issues in the following fora:

• APEC Competition Policy forum;
• The NAFTA, both in general and through its Trade and Competition Policy Working Group;
• The FTAA Competition Policy Working Group;
• The OECD Committee on Competition Law and Policy, and Joint Group with the Trade Committee;
• UNCTAD's work on Restrictive Business Practices
• WTO Working Group on Trade and Competition.

Canada will also seriously consider participation in other international fora considering competition policy.

Canada is prepared to explore the development of an APEC-wide mechanism patterned on the 1995 OECD Revised Recommendation.

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The present law for the protection of competition is in effect since 1973. This law created an antitrust commissions and a Fiscalia Nacional Economica (National Economic Prosecutor's Office), with strong powers to prevent and resolve about anticompetitive conducts and market structure.

Chilean economy is operating under competition, with no barriers to trade or foreign investment, and a low tariffs level.

Chile has made a great effort to promote competition in key areas of the economy like telecommunications and other.

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COMPETITION POLICY

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1. Heading Statement

Chinese Taipei has adopted the principle of "Competition policy in prime and industrial policy in aiding" since 1995 as the guiding principle in the shaping of its economic policy. The intention is to introduce a competition-based economic order to every possible sector of the economy. To complement this policy compaign. Chinese Taipei is undergoing a series of review of its laws and regulations which may impede market competition.

Chinese Taipei's "Fair Trade Law" was promulgated in 1991 and implemented in 1992. The Law regulates a wide range of business practices, including abuse of monopoly power, mergers, horizontal collaboration and other restrictive trade practices, unfair trade practices, and multi-level sale schemes.

The Fair Trade Commission (FTC) was established in 1992 as the enforcement agency of the Fair Trade Law. In addition to conducting investigations, the FTC also coordinates and consults with other relevant agencies with a view to reducing the scope of exemptions from the FTL which are sanctioned by other laws and fall within the jurisdictions of other agencies. The Commission also conducts compliance educational programs to increase the public's and the business sectors' awareness and understanding of the Law.

To comply with the transparency principle in the Guidelines of Competition Policy in the Osaka Action Agenda, Chinese Taipei plans to strengthen its educational programs for the general public, and domestic as well as foreign firms, and to continue to review and establish operation guidelines. Complete consultation services related to current competition policy and competition law enforcement are also offered by the Fair Trade Commission. In addition, the Commission is in the process of establishing a "Competition Policy Information and Research Center" to facilitate research in the area of competition law and policy.

Chinese Taipei is prepared to offer, where appropriate, technical assistance to other member economies in the respect of enactment of competition law and public compliance educational program, subject to available resources. Also, Chinese Taipei will continue its cooperation with other members' competition agencies through the exchange of information and consultation.

Chinese Taipei is pro-active in the enforcement of the Fair Trade Law with a view to eliminating market entry barriers and ensuring that domestic markets are under free and fair competition. Chinese Taipei has offered to be the responsible economy for establishing the "APEC Competition Policy Database" as part of its contribution to the APEC process; in particular, the achievement of the goal of free trade and investment in the region as envisioned in the Boger declaration.

2. Current Position

Chinese Taipei enacted the Fair Trade Law (FTL) in 1991 and effectively enforced with the founding of the Fair Trade Commission, Chinese Taipei (FTC) in February 1992.

The FTC regulates anticompetitive practices such as monopolies, collusion, mergers, resale price maintenance and other activities which cause restraints to fair competition. In addition, the FTC monitors and corrects unfair trade practices such as false or misleading advertising, passing-offs, trade disparagement, multi-level sales as well as other deceptive market behaviors or practices which violate the law. Furthermore, the FTL extends protection to foreign parties on a reciprocal basis.

The FTC, in addition to its responsibilities outlined above, is active in public compliance education programs. A multi-dimensional approach is adopted which includes holding public seminars on the application and the enforcement of the FTL; the distribution of educational pamphlets; the regular organization of 72-hours of lectures for employees of managerial-level and above; as well as the use of public media, e.g. television, radio broadcasts, multi-media and regular newsletters. All these efforts serve as a bridge towards fulfilling the aim of greater transparency in the application of the FTL.

3. Objective (a) ¡V to enhance transparency

Chinese Taipei will,

Short/Medium/Long Term (1997 ~ 2005)

• review guidelines for application of the law in respect of various anti-competitive and unfair trade practices;
• establish a task force to examine all other relevant laws, to compliment the trade liberalization process;
• strengthen compliance education programs;
• establish operational guidelines for investigative procedures and ensure legal rights of the parties involved.
• establish a "Competition Policy Information and Research Center" and continue the sourcing and updating of the relevant information;
• continue to establish and review guidelines.

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Objective (b) ¡V to strengthen technical assistance

Chinese Taipei will,

Short/Medium/Long Term (1997 ~ 2005)

• offer our experiences to other APEC members where appropriate, in

1. the making of the relevant laws, regulations and working guidelines;
2. inter-agency coordination relating to enforcement of the law, and
3. compliance education.

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Objective (c) ¡Vto strengthen cooperation

Chinese Taipei will:

Short/Medium/Long Term (1997 ~ 2005)

• set up "windows" for communication with competition authorities of other APEC members;
• continue cooperation with other members through the exchange of information, staff members, technical assistance, as well as other informal arrangements;
• establish bilateral agreements/arrangements.

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Short/Medium/Long Term (1997 ~ 2010)

discuss and analyze non-binding principles relevant to competition policies/laws as contemplated in the Osaka Action Agenda, through established bilateral coordination and cooperation agreements / arrangements.

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Competition Policy

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1. Current Position

Hong Kong is fully committed to the promotion of free trade and competition. We firmly subscribe to the basic principle of minimum government intervention, and adopt pragmatic and appropriate measures to safeguard competition and protect consumer interests on a sector-specific basis. We regularly review such measures to ensure they still meet the needs of the current economy.

2. IAP Progress of Implementation

Serial No.	Commitment	Responsible Branch/ Department	Progress of Implementation
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8.1	Review its competition policy in the light of the findings of the competition studies conducted by the Consumer Council and consider if additional administrative or legislative measures are required to promote competition in Hong Kong further	Trade and Industry Branch	Currently examining public feedback on the final Consumer Council Report which recommends enacting a comprehensive competition law and establishing a competition authority; will issue a Government Response to the Report this summer.
8.2	Review the Telecommunication Ordinance to promote fair competition and prevent anti-competitive practices by developing further the legal framework which safeguards competition and governs interconnection, accounting separation and sharing of essential facilities among competitors in the market	Economic Services Branch	Completed public consultation on Telecommunications Review in April 1997; currently examining public feedback to prepare the final Report. The Review will focus on examining the state of development of Hong Kong's telecommunications industry since opening up the industry to competition, formulating policy options to respond to future technological developments and developing strategic options to maintain HK's leading position in this area.
8.3	Study the feasibility of introducing a common carrier system in Hong Kong for the supply of fuel gas for domestic water heating and cooking to promote competition	Economic Services Branch	Commissioned a consultancy study in September 1996 on the project; will carefully consider recommendations once available.
8.4	Seek to enact legislation to abolish mandatory fee scales for conveyancing and probate work in order to promote competition and enhance consumer interests	Legal Department	Introduced a Bill in June 1996 to, inter alia, abolish the mandatory scale fees for conveyancing and probate work.
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8.5	Continue to participate actively in competition policy dialogues among APEC economies to enhance mutual understanding of competition policy / laws	Trade and Industry Branch / Trade Department	Have participated in various competition workshops and training seminars; will continue to participate actively in competition policy dialogues.

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COMPETITION POLICY

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1. CURRENT STATUS

• Indonesia's law contains several provision on competition in the economy and provide the necessary precedents for the enactment of a more comprehensive/codified competition law in the future. Existing Indonesian law takes steps to protect consumers and businesses from unfair competition in business activities. These provision are laid down in various laws such as Criminal Code (article 382 of the Criminal Code), the Civil Code (i.e. Article 1365 of the Civil Code), the Capital Market Law, and the law pertaining to the protection of Intellectual Property Rights.

• In support of the law pertaining to fair competition, the government has enacted various laws concerning the protection of intellectual property, such as the Patent Law (1991), the Copyright Law adopted in 1982 and amended in 1989, the Trademark Law which was revised in 1992.

• Indonesia's laws affecting competition in the economy were significantly strengthened with the adoption of 7 March 1995 of Law no. 1 of 1995. This law, which primarily sets out the rules governing the creation and operation of companies, contains a legislative statement that promotes fair competition among business and prohibits monopolistic business combinations if they result from mergers, consolidations and other acquisitions.

• Indonesia's efforts over the past ten years to deregulate foreign trade and investment regime have substantially increased competition in the Indonesian economy. The Government efforts to carefully deregulate and privatize state owned enterprises in various sectors, such as banking, has also increased competitive forces in the economy.

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2. INDIVIDUAL ACTIONS

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Short/Medium/Long Term

• Indonesia will continue its efforts to promote competition through further deregulation of its economy.

• Indonesia will participate in competition policy dialogues among APEC economies to enhance mutual understanding of competition policy laws.

• Indonesia will review its competition environment for the purpose of identifying areas where policy changes could improve the welfare of its citizens.

• Indonesia will enhance transparency with regard to competition policy.

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COMPETITION POLICY

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1. Current Position

Reforms of Japan's economic structure are now being sought through fuller application of market principles, promoting launch into new business, and technological innovation. The Japanese government, in a series of cabinet decisions, has accordingly made deregulation and active implementation of competition policies its top priority, with a view to rendering the Japanese market more competitive and internationally open by further promoting fair and free competition. In addition to pursuing Antimonopoly Act violations such as bid-rigging and price cartels proactively and rigorously, the government has taken the measures summarized as follows:

• Transparency:

To enhance the transparency of law enforcement and to prevent possible violations, a variety of guidelines are issued and made public internationally. The Fair Trade Commission also publishes and distributes FTC/Japan Views, an English-language publication which reports on the enforcement of the Antimonopoly Act, etc.

• Technical assistance:

The Fair Trade Commission and JICA have conducted training program for personnel at competition authorities in developing economies (including the following four members of APEC: People's Republic of China, Thailand, Malaysia, Republic of Korea). The training programs are scheduled to take place annually for a five-year period, from FY 1994 to FY 1998.

• Exchange of views and information with foreign competition authorities:

Japan has held bilateral meetings for exchange of views with foreign competition authorities annually. (including those of the following three members of APEC: the United States, Canada, and Republic of Korea.)

• Exchange of views and information with foreign competition authorities:

The Conference on Competition Policies among Asian and Oceanic Countries (attended by members of the Asia-Oceanic region, including the 10 APEC members) has been held since 1979.

• Exchange of views and information with foreign competition authorities:

The Fair Trade Commission has established and operates the Information Center on Competition Policies among Asian and Oceanic Countries, which acts as a clearing house for materials outlining the application of competition legislation in, and annual reports by, members of the Conference on Competition Policies among Asian and Oceanic Countries. (including 10 APEC members)

• Developing understanding in the business community:

The Fair Trade Commission periodically holds explanatory sessions to inform industry about the Antimonopoly Act and exchange of views with economic organizations. Companies are being encouraged to develop Antimonopoly Act compliance programs. Handbooks (in English and Japanese) and videos about the Antimonopoly Act are being produced and distributed.

• Other

Regulations that were established in accordance with the types of premiums have been revised, and notifications and application criteria relating to general provisions in premium regulations have been amended. (April 1996)

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1. Objectives

To enhance the competitive environment in the Asia-Pacific region by introducing or maintaining effective and adequate competition policy and/or laws and associated enforcement policies, ensuring the transparency of the above and promoting cooperation among APEC economies, thereby maximizing, inter alia, the efficient operation of markets, competition among producer and traders, and consumer benefits

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II-1 Review respective competition policy and/or laws and their enforcement in terns of transparency

• The Fair Trade Commission will continue to publish and distribute FTC/Japan Views, an English language publication reporting on the enforcement of the Antimonopoly Act, etc.

• Japan will undertake the following measures for more vigorous implementation of competition policy:

• Strengthen the structure of the Fair Trade Commission (in terms of organization and personnel, etc.)

• Together with strengthening ability to enforce the Antimonopoly Act, measures including criminal accusation will be taken to vigorously pursue violations. In addition, to ensure fair competitive order in markets after deregulation, strict measures will be taken against unfair trade practices that cause unjust disadvantages against small and medium-sized businesses and others will be treated severely.

• Prevent anti-competitive administrative guidance through prior coordinations between the ministries and agencies concerned and the Fair Trade Commission.

• Make known to the public, especially trade associations the Antimonopoly Act Guidelines Concerning the Activities of Trade Associations (revised in October 1995) for the purpose of thoroughly preventing the Antimonopoly Act violations by trade associations.

• Issue revised or new guidelines, as appropriate.

• Review of exemption systems from Antimonopoly Act:

In line with a review of the systems permitting the exemption of the Antimonopoly Act for cartels and others under individual laws, 33 of the 47 exemption systems will be abolished or undergo revision of legislation. An effort will be made to limit the scope of four of the exemption systems by the end of fiscal 1998. The other 10 systems will be continue to be reviewed.

Furthermore, necessary studies will be continued and conclusions will be obtained with regard to other exemption cartel systems, etc.

• The required procedures for revocation of designated items will be implemented during fiscal 1996 for all designated items under the resale price maintenance system. With regard to copy righted works for which resale price maintenance exemption are authorized, the scope thereof is to be limited and clarified by the end of fiscal 1997.

• The system for notification of mergers, and acquisition of businesses, etc., the system for reporting of stock holdings, and the system for notification of interlocking directorates will be reviewed from such viewpoints as the fundamental reasoning and purpose of the systems, easing the burden of requirements on companies, ensuring harmonization with international standards, etc.

• The international contract notification system will be considered from the standpoints of economic globalization and easing the burden on business operators and reviewed with a view to abolishing the system in principle. A conclusion regarding this matter will be reached by the end of fiscal 1996.

• Necessary reviews will be made and measures will be taken to lift the ban of holding companies, to the extent consistent with the Antimonopoly policy.

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II-2 Implement technical assistance in regard to policy development, and the constitution and function of enforcement agencies

Short term (1997-2000)

• Personnel training projects relating to competition policy will be implemented as Partners for Progress (PFP) projects.

• Existing competition policy training programs will be improved with a broader range of targeted participants and enhanced content.

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II-3 Establish cooperation arrangements among competition authorities in APEC members

Short/Medium/Long term (1997-2010)

• Continued implementation of annual bilateral exchange of views with foreign competition authorities (as for APEC members, Japan has held annual meetings with United States, Canada, and Republic of Korea)

• Hold the Conference on Competition Policies among Asian and Oceanic Countries periodically.

• Study the feasibility of making information provided by the Information Center on Competition Policies among Asian and Oceanic Countries available on an APEC database on competition policies.

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II-4 Develop understanding in the APEC business community of competition policy and/or laws and administrative procedures

Short term (1997-2000)

• Brief the industrial community on Japan's Antimonopoly Act, and provide exchanges of views with economic organizations.

• Encourage companies to develop Antimonopoly Act compliance programs.

• Update and distribute handbooks (in Japanese and English) and videos on the Antimonopoly Act.

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II-5 Dialogue with International Organizations

Short term (1997-2000)

• Contribute to promote cooperation between APEC and the Conference on Competition Policies among Asian and Oceanic Countries.

• Contribute to foster cooperation between APEC and international organizations such as OECD and UNCTAD.

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KOREA'S INDIVIDUAL ACTION PLAN

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COMPETITION POLICY

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1. Current Status

• Legal and Institutional Mechanisms

• In 1980, Korea established the "monopoly Regulation and Fair Trade Act" which formed the legal framework of the fair trade rules and regulations.
• In 1981, the Korea Fair Trade Commission (KFTC) was established under the Economic Planing Board (EPB) as the administrative organization in charge of competition laws and policies.
• In 1994 however, the KFTC was separated from the EPB and elevated into an independent, central administrative agency. In March 1996, the status of the Commission's chairman was elevated from the vice-ministrial level to the ministrial level, while the organization and its staff were enlarged. Thus, the Commission came to be structured to effectively enforce competition policies.

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• Establishment of the Fair Trade Order

• In order to guarantee "free and fair competition," the KFTC places policy priority on prohibiting abuse of market-dominating position, preventing excessive concentration of economic power, and regulating undue collaborative activities and unfair business practices.
• The KFTC enacted the Fair Subcontract Transactions Act in 1984 to establish order in subcontract transactions. Under the act, unfair delays of payment, unreasonable refusals in the receipt of subcontracted goods, and the like are prohibited.
• Since the enactment of the Standardized Contract Act in 1986, the KFTC has taken corrective measures on enterprises that have taken advantage of their market-dominating positions to force unfair stipulations on consumers.

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• Deregulation

• To establish a competitive structure in all industries, the Commission has been exerting efforts to abolish anticompetitive government regulations with respect to market entry, prices, and business operations.

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• Enhancing transparency of policies

• The content of KFTC decisions and judgments on cases are disclosed in judicial precedence reports.
• In order to eradicate anticompetitive trade practices, the KFTC offers and reinforces programs to raise awareness of competition laws among entrepreneurs and consumers.
• The KFTC has exerted efforts to prevent government ministries from adopting new restrictive laws and regulations by reviewing their legislation drafts and requesting that anticompetitive elements be corrected before enactment.
• The KFTC holds seminars on competition law and policy in cooperation with the academia.

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• Strengthening international cooperation

• The KFTC regularly holds annual competition policy meetings with the competition authorities of Japan, France, and the United States in which information is exchanged and constant efforts are made to strengthen bilateral cooperation.
• The KFTC also actively participates in competition policy ¡V related discussions at APEC and at such international organizations as the OECD and UNCTAD.

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2. Individual Action Plans

1. Review its respective competition policy and/or laws and the enforcement thereof in terms of transparency.

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Short Term (1997~2000)

• Strengthening enforcement of the Fair Trade Act

• The KFTC plans to reduce the areas which are exempted from the application of the Fair Trade Act to a minimum as well as to reduce the scope of granting exceptions to anticompetitive collaborative activities.

• The KFTC plans to strengthen the examination of anticompetitive corporate mergers and to bring up Korean merger examination standards to the international level.

• Strengthening deregulatory functions

• The KFTC will continuously make efforts to eliminate anticompetive elements in existing laws and regulations and to prevent the introduction of new competition ¡V restricting laws and regulations by intensifying the prior examination of newly established laws and revised laws.

• Enhancing fairness, transparency, and professionalism of KFTC affair procedures

• The KFTC will strive to minimize public inconveniences that may arise in the process of filing complaints, and it will establish a "Consumer Satisfaction Administrative System" to make KFTC affairs more consumer-oriented.

• Beginning in 1997, the KFTC will establish a Fair Trade Monitor System in which fair trade monitors will be chosen from the general public who will be responsible for reporting unfair business practices to the KFTC.

• Also beginning in 1997, the KFTC will build a Fair Trade Information Network System in which the KFTC will provide information of fair trade laws and regulations to the general public through PC network and through which the general public can also file reports of unfair business practices.

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Medium/Long Term (2001~2010)

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• To effectively enforce competition policies, the KFTC will be reorganized and the procedures and methods of law enforcements will be improved.

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2. To implement appropriate technical assistance

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Short Term (1997~2000)

• Based on the experience accumulated from the competition policy training program in Seoul in September 1996, the KFTC will improve on the substance, induce more APEC members' participation and yield more results in the upcoming programs, which the KFTC plans to hold on an annual basis.

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1. To establish cooperation arrangements among competition authorities in APEC members.

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• The KFTC will constantly promote bilateral cooperation with Japan, France, and the US.

• The KFTC will actively participate in exchange of information and dialog us with APEC members to enhance knowledge of competition policies.

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COMPETITION POLICY

1. Current Position

At the moment, Malaysia has no specific Act on Competition or Anti-Trust. The intention to have such a law was first stated in 1993 and efforts have been undertaken to draft a Competition or Trade Practices law which is now in its sixth draft. Nevertheless, the draft has not been tabled as implications and issues or some concerns expressed in having such a law are still under the study of the Ministry of Domestic Trade and Consumer Affairs.

As a free enterprise economy, Malaysia encourages healthy competition and a fair play of the market forces of supply and demand. The Malaysian Government has, since the 1980's, embarked on policies of de-regulation and liberalization of the economy. Malaysia is a signatory to the agreements made under GATT or the World Trade Organization (WTO) and is therefore fully committed to the liberalization efforts to dismantle tariff and non-tariff restrictions on trade. In addition, privatization of some public or state-owned enterprises in traditionally monopolistic sector such as electricity, telecommunications, transport and postal services have been carried out. As of this date, over 400 projects have been privatized, including in construction, manufacturing, infrastructure, transportation.

Malaysia currently has about 30 laws to regulate certain activities of enterprises and to protect consumer interests. These include The Companies Act 1965, the Control of Supplies Act 1983, the Food Act 1983, the Trade Descriptions Act 1972, the Direct Sales Act 1993, etc. However, such laws cannot prohibit or control restrictive business practices (RBPs) such as collusive tendering, market or quota allocation, refusal to supply, cartel price fixing, predatory pricing, transfer pricing, etc, including the abuse of market power by dominant enterprises. The Securities Commission also has no anti-trust policies per se with respect to the capital markets. The regulation of public listed companies by the Commission is done primarily with the objective of ensuring investor protection and to ensure that the capital markets are fair, efficient and transparent. The Panel on Take-overs and Mergers, which has been absorbed into the Securities Commission, is bound to observe the Malaysian Code on Take-overs and Mergers 1987. The Code essentially governs situations where there is an acquisition of voting shares in a company such that there is a change in control of the company concerned.

2. Objective

Encourage or maintain effective competition through relevant and adequate policies and laws.

3. Actions

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Short/Medium Term

Malaysia will: -

1. continue to enhance its competitive environment through liberalization, deregulation and privatization policies which recognize the importance of the role of the private sector and of trade and investments, both by local and foreign;
2. study the need and implications in having a competition law, including on national policies such as to promote local industries, small and medium scale enterprises or enterprises of the indigenous community, etc, and not forgetting the concerns of the private sector;
3. seek technical and financial assistance in conducting a seminar or workshop involving the private sector, NGOs and other interested or related government agencies;
4. participate in competition policy dialogues, training sessions/workshops and bilateral discussions among APEC economies to enhance mutual understanding of competition laws and policies.

Long-term Direction

To continually review existing competition policy to identify areas where changes are needed and such changes which bring improvements to the nation will be implemented.

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Current Position

During the past years, Mexico has gone through an intense process of economic changes leading to a more participative economy that has required a revision of the regulatory framework in which economic activity takes place. The Federal Law on Economic Competition (FLEC), which took effect on June 1993, is an integral part of Mexico's new economic policy.

This Law regulates Article 28 of the Constitution regarding economic competition, monopolies and free market participation. Its main objective is to protect the process of competition in the Mexican market and enhance economic efficiency through the prevention and elimination of monopolies, monopolistic practices and other restraints to the efficient operation of markets of goods and services.

At the same time the FLEC created the Federal Competition Commission (FCC) as an agency with technical and operation independence responsible for enforcement.

To achieve its goals the FCC is empowered to:

• conduct investigations of competition violations initiated at the request of interested parties or by the Commission itself;
• issue administrative rulings and assess penalties for non-compliance;
• render advisory opinions regarding competition policy issues; and
• participate in the negotiation of international agreements regarding competition policy.

The FLEC distinguishes two broad categories of illegal behavior: (i) absolute and (ii) relative monopolistic practices.

Absolute monopolistic practices are often referred to as "horizontal practices" and are prohibited "per se". The principal absolute monopolistic practices considered in the Law are the following agreements between competitors: price fixing; output restriction; market division; and bid rigging.

Relative monopolistic practices are often referred to as "vertical practices" and are evaluated under a "rule of reason" because they may imply procompetitive effects as well as anticompetitive effects in the market. The principal relative monopolistic practices considered in the Law are the following: vertical market division; resale price maintenance; tied sales; exclusive dealing; refusal to deal; boycott; and others with similar consequences in the market.

For these practices to be considered illegal, the FLEC requires that the presumed responsible parties must have substantial market power in the relevant market.

Regarding mergers and acquisitions the Law's approach is basically preventive. There is a pre-merger procedure to aid the Commission in detecting anticompetitive mergers. The Commission may prohibit a merger or acquisition if its effect would be to fix prices unilaterally or to limit supply, or could otherwise, facilitate any of the absolute and relative monopolistic practices considered in the FLEC.

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Action Plan

In the short term, Mexico will continue its efforts to foster a free and competitive market, inter alia, by means of:

1. adopting complementary rules and/or guidelines to facilitate the implementation of the existing legal framework. At present, a secondary regulation to the Federal Law of Economic Competition is in the process of elaboration;
2. undertaking periodical evaluations of its competition policy and legislation, particularly in connection with the on-going privatization and deregulation processes, including those of important sectors such as telecommunications, rail transports, basic petrochemicals, natural gas and airport services;
3. ensuring the transparency of its competition laws through the publication of competition laws and regulations, annual reports of the Mexican competition authorities, including policy and enforcement developments. The Federal Competition Commission has already made available on the Internet a "home page" that may be further expanded in the future;
4. pursuing a greater advocacy role of the Mexican competition authority (FCC) in order to deepen the understanding of the competition policy and legislation among the different economic agents, professional associations and the academic community, as well as pursuing a greater advocacy role with other governmental agencies and regulatory bodies;
5. participating in the discussions of international cooperation aspects of competition policy within the framework of:

• OECD's Committee on Competition Law and Policy;
• NAFTA Trade and Competition Working Group;
• FTAA Competition Policy Working Group;
• APEC Competition Policy forum; and
• UNCTAD's work on competition policy;

6. following the 1995 OECD Revised Recommendation concerning cooperation between member countries on anticompetitive practices affecting international trade; and
7. promoting bilateral technical assistance and, where appropriate, the negotiation of bilateral or plurilateral international cooperation agreements with foreign competition authorities in particular those of APEC members.

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¡@NEW ZEALAND'S INDIVIDUAL ACTION PLAN

COMPETITION POLICY AND DEREGULATION

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For more than a decade successive New Zealand governments have made wide¡Vranging reforms aimed at increasing the competitiveness and efficiency of the New Zealand economy. The general approach is to avoid industry¡Vspecific regulations as much as possible and to rely on general rules which apply across all sectors. These rules include a modem competition law (the Commerce Act 1986) and modern consumer protection laws (including the Fair Trading Act 1986 and the Consumer Guarantees Act 1993). These have been essential for ensuring that repealed government regulation has not been replaced by private restraints. The process of deregulation has been assisted by the presence of these laws.

The reforms have included:

1. the widespread removal of industry¡Vspecific regulation with the aim of providing businesses with a clear, consistent operating environment which relies mainly on market forces to allocate resources. These reforms have extended to all sectors of the economy including financial markets, the professions and labour markets.
2. the separation of trading and non-trading functions within government. Most trading functions have been transferred to State-owned enterprises, which have a statutory obligation to operate principally as successful businesses.
3. separation of monopoly and competitive activities in network industries.
4. the privatization of State¡Vowned enterprises which an aim of improving performance.

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New Zealand's policy and laws will be maintained. New Zealand has a consistent, transparent competition policy which recognizes the importance that imports and foreign investment have in constraining market power in the concentrated markets typically found in a small economy. New Zealand also has a modern and effective competition law and a well-resourced expert enforcement agency.

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Short term

1. New Zealand will continue to focus on regulatory reform of utility and essential facility markets. It is currently considering the implications of a Commerce Act case. Telecom Corporation v Clear Communications for the regulatory regime applying to the communications industry and for other natural monopolies that participate in related contestable markets.
2. Parliament is in the process of considering a Government¡Vsponsored bill on the regulation of airports. The bill is aimed at limiting the potential for monopoly pricing by enhancing requirements that airport companies consult before fixing aeronautical charges, coupled with information disclosure requirements that will expose inefficiencies and monopoly pricing and inform the negotiation process.

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Medium Long Term

New Zealand will consider the reform options for essential facilities that are largely owned and operated by local governments and will continue to consider the scope for further privatizations of State-owned businesses and assets.

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Papua New Guinea's Individual Action Plan

Competition Policy

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¡@ Competition Policy

Formulation of a consumer protection law, introduction of business practices act. National competition policy and appropriate technical assistance and policy development, legislative drafting powers and functions of appropriate enforcing agencies.

¡@ Implementation and continuous review.

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COMPETITION POLICY

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1. Current Position

In 1980, China's State Council promulgated the Regulations on Development and Protection of Competition, which is China's first specific regulation on competition. Later, several regulations and rules relating to competition were issued and implemented in 1980's. In 1993, the People's Congress of China adopted "The Law of the People's Republic of China for Countering Unfair Competition". The acts of unfair competition prohibited by the law are summed up as follows:

• to deceive consumers by passing off a register trade marks of another person, etc;
• to abuse administrative powers;
• to force others to by goods designated by public utility enterprises or enterprises having monopoly status;
• to make tie-in sales;
• to sell products with prizes attached by fraudulent methods or bribery;
• to damage competitor's reputation by falsehood;
• to squeeze competitors out by selling goods at price below cost; etc.

In addition, "the Law of the People's Republic of China for Protecting Consumer's Rights and Interests" was promulgated in 1993.

Industrial and Commercial Administration of China (ICA) at all level is the agency to enforce the above countering unfair competition law. The concrete punishment rendered against activities of unfair competition include ordering to stop illegal acts, confiscating illegal proceeds; imposing a fine of less than 3 times the amount of illegal proceeds, revoking the business license or being prosecuted for criminal liability.

Up to now, the ICAs have handled more than ten thousand unfair competition cases in China.

China's first anti-trust law and protecting commercial secrets law are in the process of intensive drafting.

2. Objectives

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Short-term (1997-2000):

• Draft and enact the law and regulations concerning anti-monopoly, perfect the legal system, e.g. strengthening the drafting and research work on the anti-trust law;
• Draft and promulgate relevant regulations concerning anti-dumping, countervailing and safeguard measures;
• Enhance the legal exchange concerning the fair competition with other APEC economies or international organizations. Study the advanced experience of other APEC economies;
• Enhance the enforcement and supervision of laws and regulations, e.g. strengthen the supervision on the price, quality and measure. Crack down on the illegal activities of producing and selling fake and inferior commodities, take strong measures against fraudulence and monopoly over price. Protect the producer and consumer's legitimate rights and interests; and
• Enhance the training for relevant personnel.

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Mid-and Long-term (2011-2020):

• Transform the traditional planned economy system into market economy system. Reorganize the state-owned enterprise by way of joint operation, merger and joint stock cooperation in order to make them become the true competitive participants in the market. Set up a market system with unified, opening and fair competition;
• Through the legal and economic methods, regulate the market circulation order, break the regional blockade and sector separation; and
• Further perfect the legal system in order to meet the needs of the Chinese market economy and world economic development.

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TILF AREAS

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COMPETITION POLICY

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Current Position

The Philippines, through constitutional and statutory provisions, encourages competition for a healthier business environment. The Philippine Constitution mandates that the state must protect Philippine enterprises against unfair foreign competition and trade practices. The Constitution also prohibits monopolies and combinations in restraint of trade or unfair competition.

The basic statute which prohibits unfair trade practices, monopolies and combinations in restraint of trade is the Law on Monopolies and Combinations under RA 3247, as amended and the Revised Penal Code as amended by RA 1956. The law deters any person, firm or entity from monopolizing or attempting to monopolize, or from taking part in any conspiracy or combination in the form of trust in restraint of trade or commerce or from restraining free market competition. The objective is to promote efficiency by effectively promoting desirable competition resulting in increased output, faster economic growth and lower prices of goods and services.

Although the country has statutes which prohibit unfair trade practices, the Philippines does not have a comprehensive anti-trust legislation.

Alongside, the Philippines pursues outward-oriented and free market strategies e.g., trade and investment liberalization, deregulation and privatization directed at leveling the economic and business playing field.

time line	1997-2000	2001-2020
Obj.	enhance the competitive environment in the Asia-Pacific region by introducing or maintaining effective and adequate competition policy and/or laws and associated enforcement policies, ensuring transparency and promote cooperation in APEC
¡@	The Philippines will review existing laws on competition with the end in view of improving the competition environment. To this end, the Philippines will, among others, endeavor to enact an anti-trust, anti-monopoly law, including the establishment of a Fair Trade Commission to enforce competition laws.	The Philippines will continue to review and further improve its competition policy regime.
¡@	The Philippines will also: avail of technical assistance within APEC to review and develop its competition policies and laws. participate actively in dialogues, exchange of information among APEC economies to ensure transparency and enhance mutual understanding of national competition laws and policies.

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COMPETITION POLICY

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Singapore's Competitive Regime

Singapore does not maintain competition laws but depends on its free and open market to ensure a competitive environment in the domestic economy. For services which the Government has traditionally been the sole provider, the Singapore Government has commenced a programme of corporatization and privatization to subject the provision of such services to competition and market discipline. For example:

1. corporatization of broadcasting: The Singapore Broadcasting Corporation (SBC), the former national broadcasting agency, was corporatized on 1 October 1994 into a number of privatized successor companies (which compete among themselves), regulated by the Singapore Broadcasting Authority.
2. Privatization of the telecommunications sector: In 1992, the former Telecommunication Authority of Singapore (TAS) was corporatized, and the reconstituted TAS is now the regulatory authority while Singapore Telecom (ST) is the public telecommunication licensee.

Although ST was given a 15-year monopoly ending in the year 2007, Singapore will introduce competition before the expiry of this period of exclusive rights. This includes allowing competition in the provision of radio-based services from 1997 and wire-based services from 2000.

Under the WTO negotiations for telecommunication services, Singapore has made broad pro-competitive commitments in the areas of interconnection, competitive safeguards, transparency in regulations and independence of regulators.

3. Privatization of power and gas: The Singapore Public Utilities Board (PUB) was corporatized in September 1995 with the reconstituted PUB taking the role of the regulatory authority and Singapore Power (SP) as the holding company of 2 power generation companies, 1 transmission and distribution company, 1 electricity supply company and 1 gas company. Public listing of SP is expected to take place within the next few years.

The aim of this structure is to introduce competition in electricity generation and supply.

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COMPETITION POLICY

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OBJECTIVE

APEC economies will enhance the competitive environment in the Asia-Pacific region by introducing or maintaining effective and adequate competition policy and/or laws and associated enforcement policies, ensuring the transparency of the above, and promoting cooperation among APEC economies, thereby maximizing, inter alia, the efficient operation of markets, competition among producers and traders, and consumer benefits.

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GUIDELINES

Each APEC economy will:

1. review its respective competition policy and/or lass and the enforcement thereof in terms of transparency;
2. implement as appropriate technical assistance in regard to policy development, legislative drafting, and the constitution, powers and functions of appropriate enforcement agencies; and
3. establish appropriate cooperation arrangements among APEC economies.

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(a-b) Current position and policy context:

1. Legal Framework

The three principle federal antitrust laws are the Sherman Act, 15 U.S.C. ¡±¡±1-7; the Clayton Act, 15 U.S.C.¡±¡±12-27; and the Federal Trade Commission Act, 15 U.S.C.¡±¡±41-51. Numerous other federal statutes, however, govern the antitrust treatment of particular sectors of the economy. Finally, 49 states have enacted antitrust laws, which are similar to the federal laws.

2. Objectives of the Law

The Supreme Court stated in Northern Pacific Railway Co. v. United States, 356 U.S. 1, 4 (1958), that "[t] he Sherman Act was designed to be a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade. It rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic political and social institutions."

Other objectives have at times been expressed in earlier periods in the history of U.S. antitrust law enforcement: fairness, dispersion of economic power, and distribution of economic opportunities. A strong consensus currently exists, however, that promotion of economic efficiency and maximization of consumer welfare are the appropriate objectives of U.S. antitrust policy.

3. Scope of Application

From the beginning of U.S. antitrust history in 1890, there has been a strong presumption against exempting economic sectors from the application of the antitrust laws. Accordingly, the vast bulk of U.S. commerce is subject to antitrust discipline, and no sector is totally excluded from the antitrust laws. Over time, however, some economic sectors or types of behavior have been partially exempted from the antitrust laws, through explicit statutory authorization or judicial decisions based on statutory interpretation, as described in the next section.

The U.S. antitrust laws apply to anti-competitive business conduct that affects U.S. domestic or foreign commerce. Under the effects doctrine, jurisdiction exists for import commerce when there are actual or intended effects on the U.S. market; for non-import commerce, when there is a "direct, substantial, and reasonably foreseeable effect" on U.S. trade and commerce, or on U.S. export trade and commerce.

4. Exceptions to the Scope of Application

Exceptions to the application of the antitrust laws exist for certain activities in some sectors. In many cases a specialized regulatory agency with sector-specific responsibilities applies competition rules analogous to the federal antitrust laws, and the antitrust agencies retain an advisory, competition advocacy role. Sectors that retain some form of exemption from, or special treatment under, the antitrust laws include: agricultural cooperatives; fishermen's cooperatives; banks and other financial institutions; securities and commodities industries; insurance (to the extent it is regulated by state law); newspapers; professional sports; interstate motor, rail, and water carriers; ocean shipping; organized labor; and air transportation. The clear trend is to reduce these exceptions, which are narrowly construed by the courts; as noted above, the vast bulk of U.S. commerce remains subject to antitrust disciplines.

The federal government and its instrumentalities are immune from the antitrust laws. Under the state action doctrine, private action taken pursuant to a clearly articulated policy of one of the U.S. states and subject to the active supervision of the state is immunized from antitrust liability.

Congress has enacted special laws relating to export activities. The jurisdictional reach of the U.S. antitrust laws does not extend to U.S. export activities unless they have a "direct, substantial, and reasonably foreseeable effect" on trade or commerce within the U.S., on U.S. import trade or commerce, or on the export trade of exporters in the U.S. The principal effect of the export-related legislation in this area is to provide greater advance certainty regarding the federal and state antitrust implications of export conduct.

5. General Prohibitions
   

Sherman Act ¡±1 states that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is declared to be illegal." Sherman Act ¡±2 makes it unlawful to "monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations." The Federal Trade Commission Act ¡±5 prohibits "unfair methods of competition in or affecting commerce."

6. Prohibited Behavior, Including Definitions
   

The broad terms of the Sherman Act, which have been read into section 5 of the FTC Act, prohibit agreements or understandings, express or implied, between two or more persons or firms that unreasonably restrain trade in any product or service. To determine whether an agreement unreasonably restrains competition, courts have applied on of two methods of analysis, depending on the type of agreement at issue. Certain agreements (called "per se" offenses") are deemed to be so inherently anticompetitive that they are always illegal, regardless of the intent of the parties or the actual effect of the agreements on competition. These agreements include agreements between competitors to fix prices or the terms and conditions of credit and sales, to allocate customers or territories, not to deal with any person or persons ("group boycotts"), and, in certain circumstances, to sell one product conditioned on an agreement by the buyer to purchase a second, distinct product ("tying"). Resale price maintenance is also per se unlawful.

The offense of unlawful monopolization has two elements: possession of market power in the relevant market, and the willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident. Market power has been defined as the power to control prices or exclude competition, and market share is the most important factor in measuring market power, with shares exceeding 70 percent usually considered sufficient for a finding of market power, and shares of less than 40 percent generally insufficient. For the second element, courts have required a showing of anticompetitive or predatory conduct ¡V efforts to exclude rivals on some basis other than efficiency. Examples of such conduct include below cost-pricing, filing of baseless litigation against competitors, or denial of access to an essential facility.

The offense of attempted monopolization has three elements: specific intent to control prices or destroy competition, predatory or anticompetitive conduct directed at the unlawful objective, and a "dangerous probability of success" in achieving a monopoly in the relevant market.

7. Exceptions to Prohibited Practices
   

Potentially anticompetitive practices which do not fall into the per se category (exclusive dealing or requirements contracts and other non-price vertical restraints, cooperative marketing activities, etc.) are analyzed under a "rule of reason" standard, which requires an in-depth analysis of the effect on competition in the relevant market. In rule of reason analysis, competitive intent and effect are weighed along with the business justification of the challenged activities to determine their legality. It should be noted that a rule of reason analysis does not "exempt" prohibited conduct, but rather determines whether conduct which is not "per se" prohibited should fall within the prohibitions of the antitrust laws.

8. Rules Applicable to Economic Concentrations (mergers, acquisitions, joint ventures, etc.)

Clayton Act ¡±7 prohibits mergers and acquisitions "in any line of commerce or in any activity affecting commerce in any section of the country, (where) the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly¡K" Mergers and acquisitions may also be challenged under sections 1 an 2 of the Sherman Act and section 5 of the FTC Act.

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, notification to the FTC and Department of Justice is required before the consummation of an acquisition of stock or assets exceeding specified size of firm and size of transaction thresholds. Generally, premerger notification is required if all of the following conditions are met:

1. either the acquiring person or the acquired person is engaged in interstate commerce,
2. one of the parties has annual net sales or total assets of $100 million or more, and the other has annual net assets or total sales of $10 million or more, and
3. as a result of the acquisition, the acquiring party will hold either (i) voting securities or assets of the acquired firm valued at more than $15 million, or (ii) 50% or more of the voting securities or assets of a firm with annual net sales or total assets of $25 million or more.

For transactions other than cash tender offers or acquisitions of bankrupt firms, the waiting period prior to consummation is 30 days. When a second request for additional information has been issued by the antitrust authorities within that period, the merger cannot be consummated for 20 days after compliance with the request (in practice, the time it takes to respond to a second request can very widely depending on the scope of the request and the merging parties' decision as to how quickly to respond, among other factors). Cash tender offers and acquisitions of bankrupt firms have a shorter waiting period ¡V 15 days (plus 10 days after compliance with a request for additional information). The agencies' enforcement policy is outlined in the 1992 Horizontal Merger Guidelines. If an agency concludes that a proposed merger would violate the antitrust laws, it must apply to a court to enjoin a merger prior to its consummation.

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9. Agencies Responsible for Law and Policy

9.1 Structure

The two federal agencies responsible for enforcing the antitrust laws are the Department of Justice (DOJ), through its Antitrust Division, and the Federal Trade Commission (FTC), an independent agency established in 1914. The FTC is composed of five Commissioners appointed for seven-year terms by the President with the advice and consent of the Senate; the FTC is not part of the Executive Branch. A clearance procedure between the two agencies ensures that the same parties or conduct are not subject to investigation by both agencies at the same time.

The antitrust laws are enforced principally through proceedings brought in the federal courts, either by the Department of Justice, by private parties, or by attorneys general of the various states. The FTC conducts its own internal administrative proceedings to adjudicate violations of the antitrust laws; but in those cases as well, the FTC must go before the courts to obtain preliminary injunctive relief or to enforce violations of its remedial orders. The courts thus have a major role in the enforcement and interpretation of the U.S. antitrust laws, although the vast majority of enforcement actions brought by the DOJ and FTC are settled prior to contested proceedings in the courts.

The state governments also play an important role in antitrust enforcement: each of the fifty states may sue to enforce federal antitrust laws when an antitrust violation causes injury to the state itself or to its citizens. In addition, 49 states have their own antitrust laws, which may be enforced through suits brought by states in the state courts.

9.1 Functions and Responsibilities; 9.3 Powers

The DOJ is an Executive Branch Department; it enforces the antitrust laws (Sherman and Clayton Acts, but not the FTC Act) through criminal prosecutions and civil law suits in the federal courts. The DOJ has sole authority to prosecute federal criminal violations.

The FTC is an independent regulatory agency; it enforces the antitrust laws (Clayton Act, FTC Act provisions on "unfair methods of competition", but not the Sherman Act) principally through administrative proceedings. The FTC also enforces provisions in the FTC Act that protect consumers against unfair or deceptive acts or practices. In addition to its adjudicative authority, the FTC has the power to promulgate industry or trade regulation rules primarily for consumer protection matters; in some cases, violation of such rules may result in civil monetary penalties. The FTC's ultimate recourse for enforcement of its orders is through the federal courts.

Both agencies have the power to compel testimony and the production of evidence for use in antitrust investigations, subject to strict rules for the protection of confidentiality. The agencies' powers with respect to mergers are noted in section 8 above.

10. Procedures (administrative and/or legal)
    

As noted above, the antitrust laws are enforced principally through proceedings brought in the federal courts. The FTC conducts its own administrative proceedings to adjudicate violations of the antitrust laws; but in those cases as well, the FTC must go before the courts to obtain preliminary injunctive relief or to enforce violations of its remedial orders. For federal criminal prosecutions, standard criminal procedures ¡V including the grand jury and use of immunized testimony ¡V are used by the DOJ. In DOJ criminal prosecutions, defendants may request a jury trial; in DOJ civil proceedings, ordinary rules of civil procedure apply, but defendants are not entitled to a jury trial.

11. Systems for administrative and/or legal sanctions (including possible civil

damages)

Criminal penalties: criminal violations of the Sherman Act are punishable by fines of up to $10 million for corporate defendants and $350,000 for other defendants. Fines may also be set at double the gross amount gained from violation of the law or lost by the victim. Criminal violations of the Sherman Act are also punishable by up to three years' imprisonment.

Injunctive relief: federal courts have the power to order a party to do or refrain from doing a particular act, which can include prohibiting repetition of past violations. Such orders may be entered either after a contested proceeding or by consent of the parties. The DOJ can obtain injunctive relief only through the courts; the FTC can issue cease and desist orders, following either the respondent's consent to the FTC's finding of facts or after an administrative trial on the merits, enforceable by court-imposed civil penalties.

Damages: the private cause of action for violations of the antitrust laws is a critical component of the U.S. antitrust system, and is independent of any government action. If a private suit follows a government action under the Sherman or Clayton Acts in which the defendant has been found liable, however, the plaintiff may use the earlier judgment as prima facie evidence of a violation. Private parties can obtain injunctive relief and are generally entitled to treble damage relief for violations of the antitrust laws, as well as recovery of reasonable attorney's fees. The U.S. Government can also use for treble damages to recover for injury to its business or property resulting from an antitrust violation.

Other relief: courts can order the restoration of competitive conditions, including divestiture of assets and rescission of contracts. Courts have broad power to order injunctive relief barring prospective or ongoing violations of the antitrust laws. Specific financial penalties, imposed by the courts, exist for failure to comply with pre-merger notification rules. The FTC has broad discretion in fashioning remedial cease and desist orders, enforceable by court imposed civil penalties for non-compliance.

Remedies available under the state antitrust laws vary, but are generally similar to federal antitrust law provisions; in addition, many states provide for criminal penalties for violations of their antitrust laws.

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12. Appellate Powers

All DOJ and some FTC enforcement actions are brought in the federal district courts and are subject to normal appellate review in the federal circuit courts of appeals. FTC administrative decisions are appealable directly to the federal courts of appeals. Private suits are also brought in the courts and subject to appellate review. In rare cases the Supreme Court exercises its discretionary jurisdiction to review the judgment of a federal appeals court in an antitrust case.

(c-d) outline of how the economy intends to move towards te bogor targets and major contributions to Bogor targets

1. The United States will continue to ensure the transparency of federal competition laws and enforcement policies through publication of antitrust laws, enforcement policy guidelines of the federal enforcement agencies, judicial opinions related to antitrust matters, advisory opinions or "business review letters," annual reports of the antitrust agencies, and public statements concerning enforcement policy by senior policy officials. Information regarding enforcement actions taken by the agencies and appellate judicial opinions are already available on the Internet.
   
2. The United States will continue its strong commitment to effective enforcement of the antitrust laws and to procompetitive regulatory reform. The federal enforcement agencies do not discriminate in the enforcement of the antitrust laws on the basis of nationality of the parties. Foreign firms or individuals have access to the U.S. enforcement agencies for information and advice. Foreign complainants also have access to the enforcement agencies to present evidence of alleged anticompetitive conduct in violation of the antitrust laws and to the courts to seek redress for alleged injuries therefrom.
   
3. United States enforcement agencies will continue to apply the antitrust laws to the broadest range of economic activity possible under the laws, and to reevaluate the appropriateness of any exceptions to the coverage of the antitrust laws. The agencies will continue their role as advocates of competitive outcomes in the regulatory reform process.
   
4. The United States will enforce its competition laws to ensure the US markets are free of harmful unilateral and concerted anticompetitive private conduct. Anticompetitive conduct that creates or maintains monopoly power will be investigated and pursued to the full extent of the law.
   
5. The United States strongly believes that national legislation covering restrictive agreements, anticompetitive conduct that creates or maintains monopoly power, and mergers, acquisitions and joint ventures, along with appropriate and effective investigatory instruments and penalties, are essential elements of a competition policy designed to ensure the efficient operation of markets, competition among producers and traders, and consumer welfare. Access to the judicial system, transparency, and non-discrimination are also essential to a fair and effective competition policy.

Technical Assistance

6. The United States has had an active bilateral technical assistance program, has participated in and supported multilateral efforts through the OECD and elsewhere, and will continue to provide assistance to the extent of available resources. Efforts have focused on furthering a culture of competition and sound economic analysis through exchanges of personnel, participation in seminars organized by international organizations, on-site visits to advise on particular issues, and assistance from the federal competition law enforcement agencies in the drafting of laws and regulations and, to the extent permitted by law, in the conduct of specific investigations.

Cooperation

7. The United States is a strong advocate of effective cooperation in the enforcement of competition policy. The U.S. has bilateral cooperation agreements with Canada, Australia, Germany, and the European Communities. The U.S. recently enacted legislation which would allow for even greater cooperation, including the exchange of confidential information on a reciprocal basis, pursuant to mutual antitrust assistance agreements to be negotiated with partners demonstrating an equivalent commitment to effective enforcement of competition laws and protection of confidential business information.
   
8. The United States participates actively in several international fora addressing cooperation in competition policy, including:

• the APEC competition group
• the NAFTA Trade and Competition Working Group
• the FTAA Competition Policy Working Group
• the OECD's Committee on Competition Law and Policy
• the work of UNCTAD related to competition policy

U.S. antitrust agencies comply with the terms of the OECD's revised 1995 recommendation on cooperation between member countries on anticompetitive practices affecting international trade, and have followed the notification practice called for by that recommendation in certain situations involving non-OECD APEC economies.

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DEREGULATION

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Current Position

As part of its competition policy, Australia has laid down principles and processes for legislation review.

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Guiding Principle

The guiding principle in review is that legislation should not restrict competition unless it can be demonstrated that:

• the benefits of the restriction to the community as a whole outweigh the costs; and

• the objectives of the legislation can only be achieved by restricting competition.

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Process

Australia's Federal, State and Territory governments have agreed to develop a timetable by June 1996 for the review and, where appropriate, reform of all existing legislation that restricts competition by the year 2000 to ensure compliance with the guiding principle. Proposals for new legislation that restricts competition must be accompanied by evidence that the legislation is consistent with the above principles.

Once existing legislation has been reviewed, each government is committed to systematically reviewing the legislation at least once every ten years. This regulation review exercise, by examining the objectives of legislation, will promote the transparency of Australia's regulatory regime, and, by contributing to a more open and competitive economy, will help to eliminate trade and investment distortion arising from domestic regulations.

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Principles

As noted above, Australia has developed principles for deregulation, which balance competition and other public interest considerations.

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Annual reports

Each government will publish an annual report on its progress towards achieving the above objective.

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Objective

To promote the transparency of regulatory regimes and eliminate trade and investment distortion arising from domestic regulations which not only impede free and open trade and investment in the Asia-Pacific region but also are more trade and/or investment restricting than necessary to fulfil a legitimate objective.

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Australia will:

Participate in policy dialogue between APEC economies about experiences in deregulation, including the use of individual case studies; and participate in regular dialogue with the business community, including a possible APEC symposium.

Use this dialogue to develop APEC principles and 'best practice' for domestic deregulation.

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Examples of deregulation programs:

Telecommunications

From July 1997 the Australian telecommunications industry will be subject to full and open competition. There will be no hurdles on entry to the telecommunications market and open access arrangements will be established for carriers and service providers.

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DEREGULATION

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The Government of Brunei Darussalam is undertaking and will continue to undertake steps to eliminate or reduce the negative impact of any domestic regulations which impede free and open trade and investment. The current five-year National Development Plan aims to diversity the economy through broadening the industrial and commercial base, including undertaking liberalisation and deregulation measures. A number of public services in the telecommunications and transportation sectors have recently been privatised and other services may also transferred to licensed private operators.

Brunei Darussalam will endeavour to deregulate whenever appropriate.

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Current Status

Canada has a modem, transparent and open standards and regulatory system, and is an active participant in international standardization fora. Information on standards development activities is publicly available, and participation on standards development bodies is open to both Canadians and non-residents. Proposed regulations are published in advance and subject to public comment.

It is the policy of both the Government and Canada's National Standards System to develop regulations, standards and conformity measures that are, to the extent possible, consistent with international requirements and/or practices. As a consequence, many Canadian standards in key sectors are already based on, or consistent with, international standards or requirements.

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Individual Actions

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1. Regulatory Reform:

In 1992, the Government of Canada launched a regulatory reform initiative to enhance the competitiveness of Canadian firms by eliminating, consolidating, simplifying and/or harmonizing regulations. A key objective was to reduce regulatory burden and compliance costs for domestic and foreign producers in a manner consistent with the principles of sustainable development. As a direct result, by mid-1995, more than 150 federal regulations were revoked and another 170 revised. It is expected that, by the end of 1996, an additional 100 regulations will be revoked and 200 more will be significantly revised.

A second initiative, "The Priority Regulatory Review". Is intended to improve efficiency in six priority sectors in consultation with producers and other stakeholders. These sectors are biotechnology; health, food and therapeutic products: mining; automotive and auto parts manufacturing; forest products and aquaculture.

In a third initiative, The Priority Regulator Review, major rederai regulatory department and agencies must meet new "quality assurance standards" governing the way they regulate by December 1996. Audits will be conducted to verity conformity with these new standards.

Bill C-62, The Regulatory Efficiency Act, is expected to be modified and reintroduced into the House of Commons during the fall of 1996. The Act is intended to help federal agencies regulate more efficiently and effectively without reducing the public protection that regulations are intended to provide. It encourages partnerships between regulators, businesses and the public designed to encourage sensible regulation conducive to business growth thereby enhancing Canada's global competitiveness.

The Act would allow regulated businesses and individuals to make proposals for achieving the goals of existing regulations through alternative compliance plans designed to reflect changing realities, such as new products or processes, or special circumstances that impact on regulated parties. Compliance plans would have to meet the goals of existing regulations, and conform with principles of sustainable development and protection of health and safety in order to comply with the Act. The Act contains stringent procedural safeguards to ensure openness and accountability in its implementation ¡V including requirement for public consultation.

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Chile has privatized most of the public utilities, and is promoting private investment in infrastructure. In general, there are no barriers to private investment deriving from regulatory regimes.

An important objective is to review regulatory regimes for promoting private investment and competition. Chile is trying to implement pro-competitive regulatory frameworks for the public utilities or natural monopolies.

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¢º. Objective (a) ¡V to promote transparency of regulatory regimes

Chile will:

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Short/medium term (1997-2005)

• modify regulatory laws for water companies, allowing private investment and protecting consumers. This law should be approved no later than early 1997.

• improve regulatory rules for the electricity sector, promoting competition in generation and bringing new forms of energy to Chile, such as natural gas.

• draft a new law for ports and airports, allowing the private