Unfair Trade Practices – Conceptualisation, Significance and Regional Perspectives Comments Cassey Lee

Concept and Meaning Deconstructing “Unfair trade practices” Parties: B2B, B2C, C2C Unfair: – Motivation: Fraud, deception, confusing consumers Exercise market power to increase profit – Source: Information asymmetry Bargaining power Market power – Unfair: Consequence / outcome – price, contract terms (distribution of surplus)  Behavior Process  Structure

Competition Policy & Consumer Protection Competition Policy/Law Consumer Protection ObjectiveConsumer welfare (competition) Consumer welfare TransactionsB2B, B2CB2C, C2C (?) Demand / SupplySupply Side (Seller) Demand Side (Buyer) Motivation / SourceMarket PowerFraud, Deception, Confusion Market CharacteristicsConcentration Market Power Information Asymmetry Bounded rationality LegalPer-se, rule of reasonPer-se? (regulation) Enforcement/ResolutionMarket structure Conduct Courts Conduct Information Regulation?

Situating Unfair Trade Practices “Unfair Trade” is a general term: – Depends on national legislation – Can mean competition policy-law or consumer protection Competition law & consumer protection – complementarities as well as potential conflicts  need separate the two (law, enforcement agencies) “Unfair trade” as residual / catch all  problematic even as a ‘temporary solution’ due to path dependence, focus, consumer confusion etc. Sectoral / specific: IP, e-commerce, distributive trade? Enforcement challenges may also differ

ASEAN Uneven progress in competition law implementation and enforcement Country differences in legislation, institutions, political economy Most countries have separate consumer protection laws / consumer policy Raises interesting issues about: – whether competition agencies should take on residual unfair trade practices – If so, how? If not, how to deal with such practices? – whether countries should/can harmonize