The government on March 6 issued an antitrust sub-decree establishing terms and procedures for mergers involving local and international businesses operating in Cambodia.

Comprising 20 articles and seven chapters, the legal instrument is designed to supplement the Kingdom’s competition laws, for monitoring and assessing any impacts of potentially unfair and monopolistic practices that are deemed to be particularly detrimental to consumer interests.

To recap, the Kingdom’s first-ever Law on Competition was promulgated on October 5, 2021, and also laid the framework for the establishment of the Competition Commission of Cambodia (CCC), which came early last year.

The CCC is the governing body in charge of enforcing the law and is tasked with generally ensuring fair consumer access to a wide variety of high-quality yet affordable goods and services.

The sub-decree addresses direct and indirect business mergers with the perceived potential to significantly obstruct, restrict or undermine competition in Cambodian markets, whether the agreement originates at home or overseas, except those in specific sectors or fields where other provisions may apply.

“Within six months after this sub-decree goes into force, the parties to business mergers have to comply with the sub-decree’s provisions. Any provisions in opposition to the sub-decree will be deemed null and void,” an excerpt of Chapter 7 reads.

The sub-decree warned of administrative and other disciplinary action against parties found in violation under its provisions.

Consumer Protection Competition and Fraud Repression (CCF) director-general Phan Oun told The Post on March 8 that the sub-decree requires businesses to notify the CCC prior to any merger or acquisition activities.

The commission is to identify and evaluate the costs, benefits, and other effects of business mergers on competition, and especially consumers, he said.

“Before authorisation, the CCC will review the requests made by companies in business mergers to determine whether they’d be monopolistic in nature or not in its market as a whole. If we find that the merger doesn’t restrict or adversely affect competition, then we’ll give the green light,” Oun said.

He classified these mergers into four categories: two or more companies combining into a single one; and the acquisition of any part of another firm. The remaining two are, respectively, the total or partial granting of particular rights from one business to another.

Giving an example, he said: “Let’s say that there were just four companies in the Cambodian telecoms sector – A, B, C and D – and then company A bought, and then combined with the other three, either keeping its name as A or taking a new one. Doing so would mean the creation of a monopoly.

“A, B, C and D used to compete against each other, but that won’t be the case anymore, there’ll just be a single new firm with the exclusive control over what telecoms services are provided, with prices set at its discretion. The sub-decree will not allow such a situation to occur,” he added.