Stranglehold of Monopoly

December 29, 2012 - 2:10:49 am

Qatar enforced a law in 2006 to curb monopolistic business practices and encourage fair competition in line with its goal of becoming a free market where the flow of goods and services that are either locally produced or imported is unrestricted, and monopolies do not exist.

But monopolistic practices still exist and one example is the car dealerships which have refused to fall in line and reduce their rates despite repeated warnings by the state to mend their ways.

Lawyers say the content of the law (Number 19 of 2006) is general, hinting at the need to amend the legislation and make it more specific by including provisions that define monopolistic businesses of all types, small and big.  “The provisions of this law (No 19 of 2006) are general,” said Dr Saud Al Azba, a prominent lawyer.

He said car agencies do exist but they do not prevent anyone from importing cars of any brand. The rule applies to all products and services, said Al Azba.

The role of the Consumer Protection Department (CPD) of the Ministry of Business and Trade, according to him, is restricted to monitoring food prices.

The law has several articles that specify that businesses must be run in a way that encourages competition, and prevent commercial deals that can pose hurdles to introduction of competition.

It makes hoarding and manipulation that could lead to price fluctuations illegal, and also paves the way for setting up of a committee that would act as a watchdog against monopolistic trade practices.

The law specifies deterrent penalties for violating its provisions, and the fines range from QR100,000 to a huge QR5m, depending on the nature of the violation.

In 2008, an apex committee was set up with members from various ministries, and it was headed by the chairman of Qatar Chamber, the representative body of the private sector, Sheikh Khalifa bin Jassem Al Thani.

The 10-member committee had two experts, and a representative each from the Ministry of Economy and Finance, Ministry of Justice, Ministry of Energy and Industry, Qatar Central Bank and the customs and ports authority. The Ministry of Business and Trade had two members on this key panel.

A year later, the committee announced that it had begun receiving complaints from individuals and corporate entities against monopolistic trade practices and prevention of fair competition.

The panel said it had received at least 10 complaints till then, but didn’t elaborate on the nature of the complaints. The law authorizes it to conduct checks when tipped about any violation or suspicions, but no one knows what action it has taken on the complaints.

One of the main tasks of the committee is to issue guidelines and to make the public aware of its role, rights and duties, and explain to people and businesses how they can lodge complaints.

The panel is legally bound to submit annual reports to the Ministry of Business and Trade, but it is not known if this committee has ever submitted a report and if it has, their contents have never been made public.

Critics say it is not even known if the committee is still operational or has become defunct. “If monopolistic trade practices are to stop and fair competition is to be introduced, the committee must play its role effectively. This is the first key step towards implementing the anti-monopolies law of 2006,” a critic said.THE PENINSULA

 
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