Provisions of Competition Law in Fiji

The Fijian Competition and Consumer Commission (“FCCC”) has been established under Section 7 of the Fijian Competition and Consumer Commission Act 2010 (“FCCC Act 2010”). The provisions of Competition and Consumer Law in Fiji are covered under Part 3, 4, 6, 7, 8 and 9 of the FCCC Act 2010.

Part 6 of FCCC Act 2010 :Contracts, Arrangement or Understanding: - What Does these Terms Mean!

A contract is a formal agreement between two or more parties that is enforceable under the law.

An arrangement describes something less formal than a contract. Legally, what is required is a "meeting of minds" that leads to an agreed course of action. This simply means there must have been communication between at least two or more parties that has led to a shared expectation about what each of them will or will not do.

An understanding is less formal again. It also requires a "meeting of minds" leading to an agreed course of action, but merely a "nod and a wink" between parties can be evidence of an understanding.

This means that a business does not need to have a formal written contract with a competitor or non-competitor to breach the FCCC Act 2010. It can be any understanding reached between competitors or non-competitor about how each of them will behave.

Section 61: - Contracts, arrangements and understandings in relation to prices!

The contracts, arrangements and understandings can be in many different forms, which can affect or restrict delings or competition in the Fijian Market place.

While referring to Section 61 of the FCCC Act 2010, contracts, arrangements and understandings can be in relation to prices as well. Section 61 of the FCCC Act 2010 prohibits making or giving effect to a contract, arrangement or understanding in relation to prices (or a provision of a contract, arrangement or understanding in relation to prices), if it has the purpose, or is likely to have the effect, of substantially lessening competition.

Without limiting the generality of section 61, a provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be deemed for the purpose of that section to have the purpose, or to have, or to be likely to have the effect, of substantially lessening competition, if the provision has the purpose, or has or is likely to have the effect, as the case may be, of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, the prices for, or a discount, allowance, rebate or credit in relation to, goods or services supplied or acquired or to be supplied or acquired by the parties to the contract, arrangement or understanding, or by any of them, or by any body corporate that are related to any of them, who are in competition with each other.

The subsection (1) of Section 61 does not apply to a provision of a contact or arrangement where a joint venture involves in the supply of goods or services.

The subsection (1) of Section 61 also does not apply to a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding being a provision:

In relation to the price for goods or services to be collectively acquired, whether directly or indirectly by the parties to the contract arrangement or understanding or by proposed parties to the proposed contract arrangement or understanding; or

For the joint advertising of the price for the re-supply of goods or services so acquired.

For the purpose of FCCC Act 2010, a provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall not be taken not to have the purpose, or not to have or to be likely to have the effect, of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, the prices for, or a discount, allowance, rebate or credit or credit in relation to, goods or services by reason only of:

The form of, or of that provision of, the contract, arrangement or understanding or the proposed contract, arrangement or understanding; or

Any description given to, or to that provision of, the contract, arrangement or understanding or the proposed contract, arrangement or understanding by the parties or proposed parties.

The Section 61 of FCCC Act 2010 declares that any sort of contracts, arrangements and understandings that has effects or is likey to have the effects leading to price fixing arrangement, such arrangements and contracts are declared illegal under the above section.

The Section 61 of FCCC Act 2010 also prohibites any recommended price agreement, relating both to small business and professional trade associations (multinatio firms).

It is deemed that multi-national firms may include all or most of the firms in the relevant market, which would make anti-competitive consequences of prices recommendation more probable; thereby dictating the prices to other small business in the relevant market. This type of conduct is considered ant-competitive agreements as the business would not be able to compete in the relevarms. This further affect consumers, when consumers make choices about what products and services to buy, they expect that the price has been determined freely on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices. Competition in relevant markets depends on services, location and conviences as much as or more than price; these of course are aspects of efficiency that individual businesses may best be able to judge for themselves and relate their cost to the competition that they have to face.

Public benefit is most likely to be established where it can be shown that association recommended prices assists the efficiency of small business by saving them valuable time and costs through providing them with information that helps their competitiveness and viabilities.

Effects of fixing, controlling or maintaining under contracts or agreements!

Section 61 of FCCC Act 2010 declares provisions illegal which have the purpose or effect of “fixing controlling or maintaining, or providing for the fixing controlling or maintaining of, the prices for, or a discount, allowance, rebate or credit in relation to, goods or services”.

In determining whether or not an agreement is a price fixing agreement, it is the substance and not the form which is the relevant consideration under section 61 of FCCC Act 2010. A price may be “fixed” for the purpose of section 61, even if all that is proposed is an increase to certain figure, without any provision as to when, by what machinery or what amount, a further change may take place.

Advise to the Traders:

It is an offence to engage in Contracts, arrangements and understandings in relation to prices, which restricts or lessens competition.