Cambodia | Competition Law Enacted

Cambodia’s long-awaited Competition Law (“Law”) was signed into law by the King on 5 October 2021. While the Law has been enacted, the principal regulator, the Cambodia Competition Commission (“CCC”) has not yet been appointed and it is not clear how the Law will be enforced prior to a) such appointment and b) the issue of required regulatory instruments and decisions.

The Law addresses the basic three pillars of traditional competition law (being anti-competitive agreements, abuses of dominance and anti-competitive business combinations) and sets the framework for investigations, decisions, penalties and the regulatory authorities. Unlike its neighbours, Cambodia has chosen not to address unfair trade practices in the Law and regulates these solely through other legislation. However, a degree of uncertainty remains as numerous details have been left for future regulatory instruments and decisions and significant guidance will be required on how the relevant provisions will be interpreted and implemented by the regulatory authorities and judiciary. 

Overall, while a number of areas need to be clarified and may need to be reviewed once Cambodia has some experience with its competition regime, this is solid start as Cambodia moves to join its fellow ASEAN members with competition regimes in place.

Scope

The Law will govern any activities that prevent, restrict or distort competition (“Requisite Anti-Competitive”) and apply to all ‘Persons’ conducting business activities, or any actions supporting business activities, which have the Requisite Anti-Competitive effect in a Cambodian market. The Law explicitly applies to conduct occurring outside of Cambodia which affects competition in the Kingdom of Cambodia. The Law defines ‘Persons’ to mean natural or legal persons carrying on business activities regardless of whether for profit or non-profit, registered or unregistered.

Substantive Prohibitions

The Law prohibits anti-competitive agreements, abuses of dominance and anti-competitive business combinations. Individual or block exemptions are contemplated for otherwise prohibited anti-competitive conduct or agreements if the following conditions are satisfied:

  • There are significant identifiable technological, economic or social benefits;
  • Such benefits would not exist without those agreements or activities;
  • Those benefits significantly outweigh any determined Requisite Anti-Competitive effect; and
  • The conduct or agreement does not eliminate competition in any important aspect of goods or services.

The procedures for exemptions will be established by the CCC. Leniency from pecuniary fines relating to Horizontal Agreements may be granted where a Person gives evidence or important information.  The details of the leniency policy will be established by the CCC.

Penalties

The Law provides for the following penalties: written warning, suspension, revocation or withdrawal of business registration certificates, business licenses, or business permits, pecuniary fine, financial penalty and imprisonment. The CCC has the authority to issue written warnings and impose pecuniary fines.

Persons who violate the prohibitions on anti-competitive Vertical Agreements, abuse of dominance or competitive business combinations shall be subject to a written warning and a fine of 3% to 10% of total turnover in the year of the infringement up to 3 years. Repeated violations after these penalties have been imposed may lead to revocation or withdrawal of business registration certificates or permits, or business licenses.

A natural Person violating the prohibition on anti-competitive Horizontal Agreements shall be subject to a term of imprisonment from 1 month to 2 years, and a fine from 5,000,000 to 100,000,000 Riels (approximately 1,220-24,500 USD); whereas a legal Person shall be subject to a fine from 100,000,000 to 2,000,000,000 Riels (approximately 24,500-489,000 USD).

The CCC may also order additional measures including:

  • prohibiting continuation of unlawful actions;
  • requiring sale of shares or assets at market price;
  • requiring licensing of intellectual property rights;
  • compensating for damages or disgorging unlawfully obtained profits; or
  • taking other necessary measures to restore the competition.
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