Sign In

Anti-Competitive Agreements (Section 11)


The Order prohibits agreements between undertakings, which have the object or effect of preventing, distorting or restricting competition within Brunei Darussalam. These may be oral or written agreements and need not necessarily be legally binding (e.g. unwritten agreements).

This includes agreements or decisions made by undertakings and associations such as agreements among competing firms to fix prices, control supply, share market or bid rig. Such agreements are also known as hard-core cartel.

​1.

Price fixing​

​Agreement made between businesses to fix, control or maintain the prices of goods and services that are charged onto consumers in order to reap very high profits. It may also happen indirectly, which is when businesses set similar credit terms and discounts.


Hypothetical Case Study


Alfro Transport Association was was found to have made an agreement to a 10% increase on the transport charges of goods delivery by land from the port, in their Annual General Meeting in 2016.


The decision of the Annual General Meeting was published in the local newspaper.

When investigated, the Association stated that the agreement to increase prices was due to increase in fuel charges. While this may be a reason for price increase, it does not justify a collective decision to make agreement to increase price in a collective manner. Any decision to price increase must be made independently.

 

Price fixing agreement is prohibited under Section 11 of the Competition Order 2015.


​2.

​Supply Control

This refers to the agreement made between businesses to limit the quantity of goods and services provided which will indirectly increase price.


Hypothetical Case Study

 

Five competing steel suppliers, who were also members of Steel Association, had reached an agreement during their Annual General Meeting to restrict the volume of steel production.

 

The chairman of the Association voiced his concern regarding the supply of steel that outstripped the market demand.  He argued that increasing the volume of output will only drive prices lower and suggested to reduce the production output by at least 20 percent, in order to drive the prices of steel up.  This was agreed upon by all members of the Association.

 

This agreement of controlling supply is in breach of Section 11 of Competition Order 2015.


 

 

3.

Market Sharing

 

Agreement made between businesses to each sell to different segments of a market, either in terms of geographical area or size or type of consumer. Consequently, competition will be eliminated as each has its own allotted segments all to itself and as a result, consumers’ choices will be restricted.

 

 

Hypothetical Case Study

 

In six significant meetings between 2012 and 2014, three fund management companies were found to reach a series of agreements, with the object to divide the market between themselves based on geographic areas and agree not to poach each other's clients.

 

The conduct has impacted in consumers having less choice in the fund market and to buy with less bargaining power.


This agreement to divide customers and share the market falls under the prohibition of Section 11 of anti-competitive agreements of the Competition Order 2015.


 

 

4.

Bid Rigging

 

This refers to agreement made between businesses to raise prices to purchasers through manipulating procurement process which then eliminate competition through pre-determined winner.

 

 

Hypothetical Case Study

 

Four companies namely Vela Inc, Winark, Rua, and IED colluded during a tender and intentionally submitted losing bids and predetermined the winner. Vela Inc sent its tender information to the other companies for reference via email. Their collusion was detected by the presence of common spelling mistakes in all four tender applications.

 

Colluding any agreement (written or oral) between bidders that limits or reduces competition in a tender is prohibited under Section 11 of Competition Order 2015.



Competition Info.pdf