Merger of Public Entrprises Vis-À-Vis Trade and Consumers’ Protection in Ethiopia: Analysis of Regulatory and Supervisory Aspects
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Date
2018-01
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Addis Ababa University
Abstract
In contemporary word of business merger is one devise design by business organization to earn more profit in a given business sector. Such act of the market participant in some instance may negatively affect the economy of state creating dominant position in the economic sector. To avoid this unnecessary act of business entities different countries design a mechanism of approval of merger by competition authority and determine the governance under the competition law. Other than the merger case of private/ordinary business organizations there may be State-owned enterprises merger case. Such public enterprise may endanger the economy using government’s fiscal and legislative power. Because of their nature and potential different government ensure merger regulation and general application of competition law on public enterprises. In Ethiopia public enterprises are formed, merged or dissolved by the decision of the Council of Ministers. The COMs reaches on final decision of merger upon the merger proposal of the Ministry of Public Enterprises or respective supervisory organ of the public enterprises. From the general experience of most jurisdictions when we come to the Ethiopian competition law and practice, though the current Trade Competition and Consumer Protection Proclamation envisage the merger regulation provisions, it is not clear as to the application of such law on public enterprise. There is no clear exemption of the law on the public enterprises. Pertaining to the TCCPP the TCCPA is the enforcer of the merger provisions of the law. Apart from the general application of the TCCPP, there is special governance of merger in relation to merger of banks or insurance company, which requires the merger approval of the National Bank of Ethiopia. Both the Insurance and Banking Business proclamation requires the written merger approval of the NBE. This also creates the conflicting power between the TCCPA and NBE over the merger cases which involves banks and Insurance service providers. Therefore the paper triers to show the legal and practical problems existed in merger regulation of business entities in particular public enterprises in light of the current TCCPP.
Key words: merger, public enterprises, trade competition, competitive neutrality, consumer protection
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Keywords
merger, public enterprises, trade competition, competitive neutrality, consumer protection