Price-Fixing, Cartels, and the “Abnormal Price” Problem in Bangladesh Competition Law
Bangladesh’s competition law framework was enacted to protect markets from collusion, abuse of dominance, and other practices that distort fair trade. Yet one of its most important provisions on price-fixing still raises a difficult interpretive problem: should the law prohibit all horizontal price-fixing among competitors, or only those arrangements that produce or determine an “abnormal” price? The answer matters because in competition law, the difference between banning the act of collusion and debating the “reasonableness” of a collusive outcome can determine whether enforcement is swift and credible or hesitant and ineffective. The Competition Act, 2012 was enacted to promote and sustain competition in trade and to prevent anti-competitive conduct, and section 15 is the core provision dealing with anti-competitive agreements.
At Tahmidur Remura Wahid (TRW) Law Firm, our view is that Bangladesh should move toward a clearer, stricter, and more enforceable rule against horizontal price-fixing. Competing sellers should not be allowed to jointly decide what the market price will be and then defend that arrangement by arguing that the resulting price was somehow “normal.” That is not how competitive markets are meant to function, and it is not how the leading competition regimes approach cartel behavior. U.S. antitrust law has long treated price-fixing agreements as unlawful per se, and EU law expressly prohibits agreements that directly or indirectly fix purchase or selling prices.
Why price-fixing is treated so seriously
A cartel in competition law is not merely a dramatic media label. It refers to an arrangement among market participants to restrain competition, often by coordinating price, output, market sharing, or bid behavior. Among these, horizontal price-fixing is one of the most serious violations because it strikes at the heart of the competitive process. When rival sellers agree on the price at which goods or services will be sold, consumers no longer benefit from genuine market rivalry. Price ceases to be a product of independent decision-making and becomes a product of agreement.
The danger is not limited to higher prices. Once competitors no longer need to compete on price, incentives to improve quality, innovate, reduce waste, and serve consumers better can also weaken. A fixed-price environment often protects inefficient players, rewards coordination over productivity, and encourages a market culture where business actors look sideways at rivals rather than forward to consumers. That is why courts and regulators in mature jurisdictions usually regard horizontal price-fixing as among the clearest forms of anti-competitive conduct. In United States v. Trenton Potteries, the U.S. Supreme Court held that agreements among sellers to fix and maintain uniform prices violate the Sherman Act whether the fixed prices are reasonable or unreasonable. Later U.S. cases reiterated that price-fixing is unlawful per se.
The structure of section 15 of the Competition Act, 2012
Bangladesh’s Competition Act, 2012 identifies anti-competitive agreements and prohibits conduct that has an adverse effect on competition. Section 15 is particularly important because it addresses arrangements among market participants that distort competition. Commentary and review materials on the Act note that section 15 covers conduct such as price-related collusion, bid-rigging, output restrictions, and market-sharing type arrangements.
The debate arises from the wording around price-fixing. As highlighted in recent commentary, there is a discrepancy between how the relevant rule reads in Bengali and how the authentic English text has been discussed in policy and academic circles. One formulation suggests that a practice is prohibited if it abnormally determines purchase or sale prices. Another suggests it is prohibited if it determines abnormal purchase or sale prices. That is not a small drafting issue. The first focuses on the process of collusion. The second focuses on the result. Those are very different legal ideas.
“Abnormally determining price” versus “determining abnormal price”
This distinction deserves careful attention.
If the law prohibits abnormally determining price, the emphasis is on the conduct of competitors jointly setting the price through an improper process. That approach is closer to mainstream competition law, because the core harm lies in the agreement itself. Competitors are meant to set prices independently, not collectively.
If, however, the law prohibits only determining abnormal price, enforcement becomes much harder. It requires the Competition Commission or an adjudicatory body to decide what counts as an “abnormal” price. That invites uncertainty, expert disagreement, sector-specific disputes, and endless arguments about market conditions, inflation, input costs, import shocks, consumer demand, profit margins, and what a “normal” benchmark ought to be. A price that looks abnormal in one month may appear commercially rational in another.
In practical terms, a result-based test weakens enforcement. Businesses accused of cartel conduct may argue that their agreed prices were not abnormal because of rising costs, global supply disruptions, or local distribution problems. Regulators then become trapped in a valuation and economics exercise before they can even reach the real question: why were competitors discussing and aligning prices in the first place?
That is why the process-based reading makes more legal and economic sense. Competition law should be concerned first with whether rivals coordinated their pricing behavior, not whether the coordinated outcome can later be dressed up as commercially defensible.
Why the “abnormality” qualifier is problematic
There is a deeper issue. Even a process-based reading still leaves the word abnormal in place. But what does abnormality add here? If competing sellers agree on price, that agreement itself is already abnormal from the perspective of competition law. It is the departure from independent rivalry that makes the conduct objectionable.
Many major jurisdictions do not burden cartel enforcement with a normality qualifier. Article 101 of the TFEU prohibits agreements that directly or indirectly fix purchase or selling prices. U.S. antitrust law treats horizontal price-fixing as a per se violation. The Philippine Competition Act also prohibits agreements among competitors that restrict competition as to price, or components thereof, without inserting an “abnormal price” filter.
The comparative lesson is straightforward. Once competitors are found to have coordinated price, the law should not require a second inquiry into whether the coordinated price was too high, too low, or abnormal in some separate sense. The coordination is the offense.
Bangladesh’s law should not normalize cartel defenses
A dangerous side effect of ambiguous drafting is that it normalizes the wrong debate. Instead of asking whether businesses colluded, people start asking whether the agreed price was “fair.” But cartel law is not a fairness-of-price code. It is a market-process code. It protects the conditions under which prices are formed, not merely the numerical output of those conditions.
This matters greatly in Bangladesh, where public concerns around “syndicates” and coordinated market behavior often arise in relation to essential goods and everyday consumer products. Competition law should give the Commission a strong tool to investigate and sanction collusion without requiring it to solve the impossible puzzle of identifying a theoretically normal price for every sector and every period. Review materials on Bangladesh’s framework have already noted implementation weaknesses and the need to strengthen enforcement capacity.
Predatory pricing is not a reason to tolerate price-fixing
One possible defense of the current ambiguity is that markets also face the opposite danger: a firm may cut prices too low, incur losses temporarily, drive out rivals, and later raise prices after gaining dominance. That is the classic predatory pricing concern. Bangladesh’s Competition Act addresses abuse of dominant position separately, and commentary on the Act notes that below-cost pricing intended to eliminate competition can fall within section 16.
But predatory pricing does not justify horizontal price-fixing. The legal answer to one anti-competitive practice is not to create room for another. A market can prohibit collusion among rivals while separately policing abuse of dominance by a powerful firm. These are distinct theories of harm and require distinct legal tools.
In reality, horizontal price-fixing typically presents a more immediate and systemic danger to consumers than predatory pricing. Predatory pricing is difficult, expensive, and risky to sustain. Cartels, by contrast, can distort markets quietly and profitably for long periods if detection is weak.
Enforcement is not just about legal text
Even the best statutory wording will struggle without effective enforcement architecture. That is another area where Bangladesh can improve. One of the most effective anti-cartel tools used internationally is a leniency programme: the first cartel participant to confess and cooperate receives reduced penalties or immunity. This destabilizes cartels from within because every member knows another may defect first.
Bangladesh’s current framework is widely understood to lack a formal leniency programme of that kind. Multiple review and diagnostic materials have recommended introducing one to improve detection of complex anti-competitive conduct and to encourage whistleblowing.
For Bangladesh, a meaningful anti-cartel reform agenda should include at least the following:
■ clearer statutory wording on horizontal price-fixing;
■ stronger investigative powers and technical capacity within the Competition Commission;
■ a formal leniency regime;
■ protection for whistleblowers and cooperating parties;
■ sector guidance on trade associations, parallel conduct, and prohibited competitor communications;
■ faster adjudicatory pathways for core cartel cases.
The role of the Competition Commission
Bangladesh’s Competition Commission was established to enforce the Act and take action against anti-competitive practices. Yet policy reviews and institutional studies have repeatedly pointed out that enforcement has been slower and weaker than the market requires, especially against coordinated conduct affecting consumers. That does not mean the law is useless. It means the institution needs sharper tools, greater confidence, and statutory clarity.
Cartel enforcement cannot be purely symbolic. If businesses conclude that price coordination will be debated endlessly as a matter of “abnormality” rather than condemned as a market-rigging practice, the deterrent effect of the law will shrink.
What Bangladesh should do next
In our view, Bangladesh should seriously consider amending section 15 to remove the ambiguity around “abnormal” price-fixing and bring the law closer to the mainstream rule: horizontal price-fixing among competitors should be prohibited as such, without requiring proof that the agreed price itself was abnormal. That would better protect consumers, simplify enforcement, and align with comparative practice.
A sensible amendment could do three things at once.
First, it could clarify that any agreement, understanding, concerted practice, or decision among competitors to fix, maintain, stabilize, raise, lower, or coordinate purchase or sale prices is prohibited.
Second, it could preserve careful treatment of vertical restraints and resale-price issues, which are often more nuanced and may require effects analysis depending on the circumstances.
Third, it could add a leniency framework and stronger investigatory provisions so that the law is not only well-drafted but operational.
TRW Law Firm’s view
At Tahmidur Remura Wahid (TRW) Law Firm, we believe Bangladesh’s competition law should protect the market process, not invite excuses for cartel conduct. The stronger legal principle is simple: competitors should compete. They should not jointly decide what the market price will be and then force consumers, retailers, or downstream businesses to live with that decision.
The current “abnormal price” wording debate shows why precision in statutory drafting matters. A poorly framed cartel rule can weaken an entire enforcement system. Bangladesh does not need to reinvent the law of price-fixing. The better path is to clarify the statute, strengthen the Competition Commission, add leniency protections, and treat hard-core horizontal price-fixing as the serious anti-competitive offense it already is in economic reality.
Summary table
| Issue | Present concern | Better approach |
|---|---|---|
| Horizontal price-fixing | Ambiguity around “abnormal” pricing language | Ban competitor price-fixing clearly and directly |
| Legal interpretation | Risk of focusing on outcome instead of collusive process | Focus on the agreement or concerted practice itself |
| Enforcement difficulty | Hard to define “abnormal price” across sectors and time | Avoid requiring a “normal price” benchmark |
| Comparative alignment | Bangladesh wording appears less clear than major regimes | Align more closely with EU, U.S., and regional practice |
| Predatory pricing concern | Sometimes raised as a counterpoint | Address separately under abuse of dominance rules |
| Detection of cartels | Weak without insider cooperation mechanisms | Introduce a formal leniency programme |
| Institutional capacity | Enforcement remains challenging | Strengthen Commission powers, expertise, and procedures |
Contact TRW Law Firm
Tahmidur Remura Wahid (TRW) Law Firm
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