'I can't recall'

We commend the Fair Trading Commission (FTC) for seeking to act on the Digicel-Claro merger under Section 17 of the Fair Competition Act (FCA). In his article titled 'Clarifying the FTC's jurisdiction', Delroy S. Beckford, senior legal counsel of the FTC, claimed that statements suggesting that the FTC is limited in its power to act under, and enforce the FCA, is misleading. I will present some evidence below and let you, the reader, be the judge of the potency of the FTC.

While we can all agree that the big-stick approach will not always create the optimal solution and set of relationships between actors, we are compelled to articulate that a carrot should not always be waved in order to induce particular behavioural outcomes. However, since the 2001 court ruling that the FTC was operating in breach of natural justice, the FTC has been travelling with carrots to encourage the 'right' behaviour. The specifics of the court ruling, as outlined in an October 8, 2004 FTC document titled 'Competition Advocacy in Jamaica', reads:

"A 2001 ruling by the Court of Appeal established that the failure of the FCA to properly distinguish between the role of the staff, as investigators, and that of the commissioners, as adjudicators, conduces to a breach of natural justice. Thus, following an investigation and staff report pointing to the existence of an anti-competitive practice, the offending firm can only be encouraged to correct its behaviour. Fortunately, there is some significant degree of cooperation from businesses. The act is being appropriately amended. While waiting for the legislative process to take its course, the commission has thrown its energies largely into consumer protection and the task of competition advocacy."

Competition advocacy

The referenced FTC document goes on to provide a definition of 'competition advocacy' as:

"Competition advocacy refers to those activities conducted by the competition authority related to the promotion of a competitive environment for economic activities by means of non-enforcement mechanisms, mainly through its relationships with other governmental entities by increasing public awareness of the benefits of competition."

Further, the same FTC document reads:

"The commission is gaining ground in its struggle to establish a competition culture in Jamaica. This is evident in the fact that although it is currently unable to enforce the competition provisions of the FCA, many companies have been anxious not to violate the spirit of the FCA. Companies are increasingly seeking the opinion of the commission as to whether proposed changes in their operations would offend competition. Firms have also begun to complain about false and misleading advertising by their competitors, signifying that they are more aware of what actions are likely to have an impact on the competitive process."

Section 4.2 of the document reads:

"The advocacy work of the commission is far from over, however, as even among persons who are aware of the commission's existence and the FCA, there is ignorance as it relates to the benefits which can arise from competition. It is highly anticipated that when the FCA is amended the agency will have the ability to more effectively enforce competition law, thus demonstrating the benefits of competition. This should build the agency's credibility and contribute to the building of a competition culture in Jamaica."

Amendments not made

To date, the suggested amendments to the FCA have not been borne out, and as recently as 2009 the natural-justice ruling was front and centre as articulated by the FTC's executive director, David Miller, in his July 16, 2009 opening remarks of the FTC Symposium. On this occasion, Mr Miller remarked:

"Since the 2001 Court of Appeal decision in the matter of the Jamaica Stock Exchange v Fair Trading Commission, we at the FTC have been discussing ways to address the issues raised in the judgment, specifically, the most appropriate structure not only for the FTC but also for other bodies which have adjudicating functions.

" ... We intend ... , therefore, to look at several of the considerations involved in determining the optimal structure for such bodies, and the merits and demerits of each of the three possible adjudicative avenues, namely, the court; a specialised independent tribunal; and the commissioners, sitting as a quasi-judicial body." Please be the judge!

For evidence on entities, sectors or sections of the economy of Jamaica that are not bound by the FCA, see the ruling in the case between the General Legal Council and the FTC. Need more be said about the FTC's ability to enforce the FCA? As stated in 'Power and privilege', given a similar set of circumstances and similar set of facts, the courts are almost obligated to rule consistent with precedent. As such, until the FCA is amended to change the circumstances, whether it is a 'case' or 'cases' in which natural justice has been breached, the precedent applies. To sum up the position of the FCA and the FTC I will quote from an article 'The Case For Maintaining A Single Competition Agency For Investigation And Adjudication Of Anti-Trust Cases', the work of Dr Peter-John Gordon, one of the commissioners of the FTC. Dr Gordon writes:

"The Fair Competition Act and the structures it creates were ruled to be in breach of natural justice in the appeal court in Jamaica. An adjustment to the FCA and the support structure is, therefore, required." Need I say more!

Darron Thomas is a lecturer at the School of Business Administration, University of Technology, Jamaica. Email feedback to columns@gleanerj.com and darron.thomas@gmail.com.