Status of Competition in Nepal

1. Status of Competition in Nepal Neelu Thapa South Asia Watch on Trade, Economics & Environment (SAWTEE)

2. Interviewees • 25 Policymakers • 25 Government officials • 50 consumers - including economic journalists, academicians, civil society activists, and lawyers

3. Background and Methodology • Separate questionnaires for each group • Multiple choice • Initial focus to probe extent of public awareness • Focus of survey thus changed to fairly informed population

4. Results Overview • Large population without a clear concept of “competition.” • All groups viewed anticompetitive practices to be prevalent in Nepal • Overwhelming majority in favour of Comprehensive Competition Law

5. Extent of Anti-Competitive Practices in Nepal • Anticompetitive practice (significant): • Consumers- 88%, • Policymakers-64%, • Business Community-36% • Anticompetitive practice (moderate): • Consumers-10% • Policymakers-20% • Business community-44% • Monopoly as most common practice • Others: entry barriers, tied selling, collective price fixing and resale price maintenance

6. Action Taken • Consumers • 50% ignore and deal • 24% go to another supplier • 18% argue and deal • 6% complain to government authorities • Business Community • 35% match move of anticompetitive practitioner • 35% talk to business peers and settle issue • 25% negotiate directly with anti competitive practitioner • 5% complain to government authorities

7. Awareness of legislation Majority could not relate laws to anticompetitive practices Consumer Awareness 34% Business Community Awareness 44% Policy makers Awareness 76% Most referred law: Consumer Protection Act 44% aware of Consumer Protection Act Majority were Policy Makers

8. Competition Law • 92% of all respondents opine law should be enacted Only 8 consumers were not sure if such a law was needed. • Objective of law • Consumers: regulate business activity and promote consumer welfare • Business community: promote efficiency NOT regulate business activity • Policymakers: all three

9. Structure of Competition Authority • Majority favoured independent authority • Consumers 94% • Policymakers 40% • Business Community 64% • Investigative and Adjudicative Powers • Consumers 76% • Policymakers 72% • Business Community 64%

10. Implementation of Law • Majority agreed to phase wise manner • Policymakers: per se approach • Business Community: Rule of Reason • Consumers: per se approach • 84% monopoly itself not anticompetitive • 73% mergers and acquisitions should be reviewed