This presentation by Fiji was made during the break-out Session 3, “Techniques and evidence for assessing predatory pricing, margin squeeze and exploitative abuses” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.

1. ECONOMIC ANALYSIS IN ABUSE CASES
FIJIAN COMPETITION AND CONSUMER COMMISSION

2. OVERVIEW
 This presentation will focus on exploitative abuses – specifically with respect to abusive pricing
practices.
 This will cover:
 The relevant legal frameworks in Fiji
 Important recent developments in our enforcement priorities
 Our approach to dealing with recent circumstances
 We believe that there are lessons we can draw from recent experience during the pandemic,
which can be applied more generally.

3. LEGAL FRAMEWORK IN FIJI
 Competition law in Fiji is governed by the Fijian Competition and Consumer Act 2010.
 The FCCC Act bans prohibits abuses of dominant positions under Part 6: Restrictive Trade
Practices.
 However, the anti-abuse provisions of the FCCC Act are focused on exclusionary abuses,
rather than exploitative abuses.

4. LEGAL FRAMEWORK IN FIJI
 We have two central provisions which are designed to help us tackle abuses:
 Section 66 – Misuse of Market Power: prohibits taking advantage of market power for the purpose of
eliminating competitors, deterring competition or deterring entry.
 Section 67 – Anticompetitive conduct: prohibits taking advantage of market power with the effect of
substantially lessening competition.
 Both require the perpetrator to have a “substantial degree of market power”.
 These are clearly focused on addressing exclusionary abuses, as they focus on preventing
conduct aimed at limiting competition.

5. EXPLOITATIVE ABUSES
 There are no provisions in the FCCC Act 2010 which deal explicitly with exploitative abuses by
dominant businesses which directly harm consumers through abuse of their market power.
 This could potentially be a problem for us: we have become aware of a number of matters
which are clearly abusive, but which are not covered explicitly in the FCCC Act.
 Many of these cases have in recent times related to products connected to Covid-19.

6. WHAT ARE EXPLOITATIVE ABUSES?
 For the purposes of this discussion, its worth being clear about the kind of abuse we are
discussing when we talk about “exploitative abuse”. We have in mind something along the
lines of Article 82 of the Treaty establishing the European Community:
 Such abuse may, in particular, consist in:
 directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
 limiting production, markets or technical development to the prejudice of consumers;
 applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing
them at a competitive disadvantage;
 making the conclusion of contracts subject to acceptance by the other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection with the
subject of such contracts.

7. WHAT ARE EXPLOITATIVE ABUSES?
 We have particularly been concerned with the first two of these types of abuse:
 Such abuse may, in particular, consist in:
 directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
 limiting production, markets or technical development to the prejudice of consumers;
 applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing
them at a competitive disadvantage;
 making the conclusion of contracts subject to acceptance by the other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection with the
subject of such contracts.

8. WHAT ARE EXPLOITATIVE ABUSES?
 We have particularly been concerned with the first two of these types of abuse:
 Such abuse may, in particular, consist in:
 directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
 limiting production, markets or technical development to the prejudice of consumers;
 applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing
them at a competitive disadvantage;
 making the conclusion of contracts subject to acceptance by the other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection with the
subject of such contracts.

9. EXPLOITATIVE ABUSES
 Given a number of cases we had become aware of regarding extremely high prices being
charged for goods relating to Covid-19 (masks, hand sanitiser etc.) we appreciated the
importance of tackling excessive pricing.
 However, we faced a difficulty in that our anti-abuse provisions are focused on exclusionary
abuses and not exploitative abuses.
 We decided to tackle these problems using our provisions against unconscionable conduct.

10. UNCONSCIONABLE CONDUCT
 A person shall not, in trade or commerce, in connection with the supply or possible supply of
goods or services to a person…engage in conduct that is, in all the circumstances,
unconscionable.
 Assessed with reference to:
 Relative bargaining power of supplier and consumer
 Whether the conduct was reasonably necessary to protect the legitimate interests
 Whether the transaction was comprehensible to the customer
 Whether any undue pressure was exerted on the buyer
 The amount for which the good could have been acquired from an alternative supplier.

11. UNCONSCIONABLE CONDUCT
 This is a reasonably flexible provision, because it covers anything deemed unconscionable.
 As such, we are applying a slightly unusual test to the conduct we assess under this provision:
rather than a competition analysis, we are looking at whether an agent could have decided
to engage in the conduct in good conscience.
 In this case, this means that we’re trying to establish whether conduct could have a legimitate
business rationale.

12. COVID-19 IN FIJI
 Fiji’s experience with Covid-19 was highly unusual – we essentially had no local transmission between
April 2020 and April 2021, and then a significant outbreak for the subsequent 6 months.
 Consequence of this:
 sudden need for masks/hand-sanitiser etc. from April 2021 onwards, which had not been needed
previously
 Restrictions on movement

13. COVID-19 IN FIJI
 This had a significant impact on consumer demand:
 Increase in demand for some products – especially hand-sanitiser, masks etc
 Demand for these products further increased by government regulations mandating mask-
wearing and so on.
 Significant restrictions on movement – imposition of containment areas, guidance to stay at
home

14. RELEVANCE FOR ENFORCEMENT
 Movement restrictions dramatically change appropriate geographic market definitions –
generally the proper geographic market definition shrank as a result of movement restrictions.
 Change in relative bargaining power:
 Consumers now more anxious to acquire masks quickly, less worried about shopping around
 Markets take a little while to react to outbreak – transient shortages of masks etc. in some areas.
 Movement restrictions reduce availability of outside options.

15. ISSUES WE DETECTED
 Significant increases in the prices of some goods, especially masks and hand sanitiser.
 Many of these were clearly unreasonable and likely to constitute unconscionable conduct:
 Extremely high prices for face masks – e.g. selling individual disposable masks for > FJD10
 Other issues around businesses making misleading claims about the characteristics of their
products, exaggerating their effectiveness against Covid-19.

16. OUR APPROACH
 Given how widespread these issues were, we decided to adapt the way we do economic
analysis for these cases:
“Normal” approach Adapted approach
Primarily responsive to complaints More intensive pro-active monitoring
Case-by-case analysis Central analysis that can be applied
repeatedly
Enforcement primarily aimed at charging
offenders to deter future offending
Enforcement aims to catch problems as they
occur

17. CORE ECONOMIC ANALYSIS
 Given that we were witnessing conduct repeatedly which shared some essential features, we
were able to build a central analysis that we could re-apply repeatedly to similar cases.
 As such, we had a central analytical framework, based on a number of considerations, which
we could apply repeatedly:
 Price of the goods
 Cost of getting the goods to market
 Travel times required to reach alternatives
 Number of alternatives available
 We were able to implement this approach because of a number of advantages we could use
in this case.

18. CORE ECONOMIC ANALYSIS
 Basic question for our analysis: are the goods being sold well above cost?
 Advantages we could make use of:
 The FCCC administers Fiji’s price control regime for essential goods – we have a good idea of
transportation costs and the landed costs of goods generally;
 We have existing monitoring teams who are experienced at monitoring prices anyway;
 Goods affected are relatively homogenous
 Our analyses in these cases revolved to a much greater extent around travel-time isochrones
than is usually the case:
 We were essentially dealing with large numbers of relatively small local markets.
 Much greater focus on distances between alternative providers

19. IMPLEMENTATION
 Our core focus was on rapid, proactive implementation of our anti-abuse strategy:
 we hired a large number of temporary extra staff to assist our enforcement and monitoring teams,
 additional 45 monitoring staff – an expansion of around 50% in our total monitoring workforce.
 As part of our focus on flexibility in implementation, we temporarily merged two previously
separate departments, creating a single unit aimed at protecting consumers from exploitative
practices
 This has been a feature of our response to each outbreak of Sars-CoV-2, as well as to other
natural disasters.
 For example, in the first wave of the disease, between the 22nd of April and 27th July 2020, we carried
out 8,351 inspections. This led to 345 businesses being charged, predominantly under price-gouging
offences.

20. IMPLEMENTATION
 In 2021, we were able to take action against more than 30 traders for price-gouging in relation
to products such as masks and hand sanitiser.
 We were able to address these problems rapidly and stamp these harmful practices out as
they occurred
 We issued 22 warning letters for price-gouging and brought charges against 9 businesses in key areas
at a crucial time in the progress of the outbreak.

21. IMPLEMENTATION
 We were especially able to take this approach for two reasons:
 firstly, we had broad pre-existing oversight of supply chains
 secondly, we broadly took a cooperative approach with businesses where possible,
 helping the businesses to comply with competition law in Fiji, rather than always acting punitively

22. LESSONS FOR FUTURE ENFORCEMENT
 Firstly, economic analysis should be couple with a flexible, adaptable and dynamic framework
for implementation, enforcement and information gathering.
 This is especially true in crisis scenarios, but is true even in normal times.
 By having the ability to track down even low-level abusive practices quickly and efficiently,
consumers can be protected before serious harm has been allowed to occur.

23. LESSONS FOR FUTURE ENFORCEMENT
 Secondly, economic analyses should be based around flexible frameworks which can be
adapted repeatedly to similar cases.
 While every market is unique, there are categories of problem which are likely to repeatedly
occur across many markets.
 Having broad frameworks that can be adopted easily by implementation and enforcement
teams, can allow regulatory bodies to cast a much wider net.

24. LESSONS FOR FUTURE ENFORCEMENT
 Thirdly, competition authorities should be willing to use various enforcement tools as
complements to one another.
 The manner in which this is done should be informed by careful economic assessments of the
effects of these tools.
 Primary objective: averting the worst abuses while avoiding unintended harms from over-enforcement

25. LESSONS FOR FUTURE ENFORCEMENT
 Finally, we must recognise the trade-off between deep-dive economic analyses,
implementation speeds.
 A dynamic approach can allow us to retain staff capacity to work on the highest-public-return
assignments, while still allowing for rapid implementation across the board..
 Key point: importance of avoiding excessive complexity in economic analysis when returns to
extra depth are low.