The Section 74A-74D is providing particular powers so that the Commission will obtain orders against anti-competitive behavior. The Cease and Desist Commissioners can make orders in restraining anti-competitive conduct, or requiring a person to do something to be able to restore competition or the potential for the competition in markets. Cease and desist order can be made in which the Cease and Desist Commissioners are satisfied that on the face of evidence at first sight, there is anti-competitive conduct contravening the Commerce Act, and it is important to urgently act to prevent a certain customer or person suffering serious damage or loss, as well as in the public interest.
Behavior subject to Cease and Desist Order Regime
The Commissions believe that provisions of cease and desist order have the potential of applying to a large range of anti-competitive behavior, which include the following:
- Acquisitions and mergers that are likely to lessen the competition substantially (S 47)
- Leveraging a considerable degree of market power for the purpose of preventing, restricting, eliminating, or deterring competition (S 36)
- Arrangements, contracts, or understanding that are likely to lessen the competition substantially (S 27)
The orders could be made for stopping cartels, which include deals between the competitors in setting the cost of goods they compete in, joint action, or market rigging by a group of businesses in order to block the competitors coming into the market. It could be made to stop the arrangements among businesses with the effect of lessening the competition like discounting arrangements. Furthermore, cease and desist orders could be made for stopping exclusive dealings in particular circumstances by market power.
The kind of case that may be dealt with by this order is where a business that has considerable market power refuses dealing with a prospective or current customer, since that customer also deals with a competitor of the business that has market power, or because that prospective customer will agree dealing with competitors with market power.
Moreover, the cease and desist order can also be used with relation to acquisitions and mergers in which parties intend on carrying out their transaction without a need to seek clearance from the Commission, considering that the transaction is more likely to lessen the competition considerably. The Commission will also be able to seek orders from where the transaction occurred, but has to be undone to be able to make sure that the competition is not lessened. The use of cease and desist will serve to promote competition.
This article was supplied by Newsletter Ready.