University of Reading
School of Law
TITLE:
Tackling the Gaps in Competition Policy Enforcement in the three selected CARICOM Countries
Alicia Wondacey Primo
1
No of Words: 13, 623 words
This is a dissertation submitted to the School of Law as part of the
requirements for the award of an LLM.
Statement of Original Authorship
I declare that I have read the notes on plagiarism including its definition and
cheating in the Postgraduate Programme Handbook and that this work is
entirely free from plagiarism. I understand the consequences of committing
plagiarism. I have acknowledged all quotations and ideas as advised in the
Handbook. Where I have been in doubt about how to acknowledge an idea or
quotation I have consulted my supervisor. Neither this piece of work nor any
part thereof has been submitted in connection with another assessment.
Signature Date
_____________________________ _________________
ALICIA WONDACEY PRIMO 6th October, 2016
2
ACKNOWLEDGEMENTS
To my loving parents, Mr Courtney and Ingrid Primo and my very supportive
partner, Samuel Cunnigham words cannot express the gratitude I owe to you
for your support to me throughout my academic career. It is my greatest hope
that one day you all will reap fully the fruits of labour you have instilled in
me.
Special thanks to my supervisor Dr Despoina Matzani and proposal project
supervisor Dr Jorge Guira both of the University of Reading for your words of
advice and useful input that steered me in the right direction as I began to
develop this dissertation.
I would like to say a special thank you to my classmate Dr Josiah De Gershon
De Graft Quansah who provided useful advice to me throughout my studies at
the University of Reading. Josiah, you are my biggest inspiration.
Finally, I would like to thank the British High Commission of Guyana for
awarding me a Chevening1 Scholarship for the period 2015/2016 and making
it possible for me to produce this intellectual piece of work.
THANK YOU ALL!
TABLE OF CONTENTS1 Chevening Scholarships, the UK government’s global scholarship programme, funded by the Foreign and Commonwealth Office (FCO) and partner organisations.
3
Title of Dissertation...........................................................................................1
Statement of Original Authorship......................................................................2
Acknowledgements.............................................................................................3
Table of Contents...............................................................................................4
Abstract...........................................................................................................5-8
Methodology......................................................................................................9
Abbreviations..............................................................................................10-11
Introduction.................................................................................................12-14
Chapter 1 Competition Protection under the European
Union...................................................................................15-20
Chapter 2 Transmission of Competition Policy to the Caribbean
Community..........................................................................21-27
Chapter 3 Engineering of NCAs to enforce Competition Laws...........28-36
Chapter 4 Gaps in the Transmission of Competition Laws to the
Caribbean Community........................................................37-50
Chapter 5 Gaps in the Engineering of NCAs for
Caribbean Community........................................................51-56
Chapter 6 Remedying the Gaps...........................................................57-64
Conclusion ....................................................................................65
Bibliography .................................................................................66-69
Appendices ......................................................................................70
Appendix 1: Map of Caribbean Community ................................................71
ABSTRACT
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Market failure and the collapse of competition is the most likely result if
countries do not pass competition laws to prohibit the anti-competitive
conduct of businesses.2 Competition law has been enacted since it creates a
level playing field upon which businesses can compete and competition
countries show significant growth in the level of gross domestic product
(GDP), The level of total factor productivity (which is used to measure
competitiveness in countries) has also shown massive increases.3
In the EU, competition laws evolved as a way to safeguard the single
European community market by protecting free competition in trade in goods
and services. Ultimately the EU has developed an extensive competition law
regime of a range of offences. Member states of CARICOM implemented the
Revised Treaty of Chaguaramas (RTC) and more specifically the CARICOM
Competition Commission (CCC) to deal with competition concerns of the
Region. Chapter VIII within the RTC identified the CARICOM Competition
Commission as responsible for protecting cross-border competition complaints
and the National Competition Authorities of members’ states to enforce
competition claims within their jurisdiction.4
This essay will discuss the gaps in the development of a regional competition
policy for the Caribbean Community namely gaps in the transmission of the
law to the RTC and national legislation and shortcomings in the engineering of
NCAs to enforce competition policy.
2 Taimoon Stewart, ‘The Role of Competition Policy in Regional Integration: The case of the Caribbean Community’ Salies UWI 2 <https://sta.uwi.edu/salises/workshop/papers/tstewart.pdf> accessed 1October 2016, 2 3 ibid 4 Maher Dabbah, International and Comparative Competition Law (1st Cambridge University Press 2010) 400
5
On the shortcomings of the transfer of competition policy to the RTC, that will
be discussed is the fact that the CCC does not have decisional autonomy.
Decisions to conduct investigations are based on a request of a member state
or a request through the Caribbean Council for Trade and Development
(COTED).5 Further, the Commission only has ‘Proprio Motu’ powers after
asking an NCA to undertake a preliminary examination and not being satisfied
with the outcomes of its application to that member state.6 Gaps in the
national legislation of the Region arise for example, on the other hand,
because there are limited competition law offences that have been prescribed.
Of the three jurisdictions that will be discussed only one has provisions
concerning the control of merger control, but no country, however, has made
provisions for the allocation of illegal state aid.
On the engineering of National Competition Authorities (NCAs) in the
Caribbean Community, we see possible shortcomings in their enforcement as
a result of the traditional model followed by most agencies. The European
Union (EU) is a seminal jurisdiction that follows the traditional model, and it
has been subject to a variety of human rights concerns. Moreover, the structure
of many agencies are linked to other ministries or salaries are equated to that
of the public service which additionally causes other gaps.
Authors such as Maher Dabbah, Arlen Duke, and Taimoon Stewart have all
written on these topical issues as such their writings will we considered in
these discussions.
5 RTC Article 175 (1) and (2) 6 RTC Article 176 (1) and (3) RTC
6
There are a variety of ways to remedy the gaps faced by the Region. Member
states can choose to revisit the lack of decisional autonomy of the CCC in the
RTC towards a more supranational approach as in the EU. Member states can
begin to expand their range of competition offences to include merger control
and illegal state aid.
On the other hand, the engineering and structure of NCAs could also be
revisited. To safeguard effective enforcement of competition policy, there
needs to be autonomy of an agency from government ministries, no mixing of
investigative from adjudicative roles in the structure of agency and a revamp
in the setting of salaries at the same level of workers in public service
ministries in the Region, among other solutions. Moreover, solutions will also
be discussed on how agencies can become more effective by marketing an
effective brand, ensuring that the public is kept up to date with the activities of
the commission.
Additionally, in solving issues such as the low enforcement of international
cartels, political influence as a result of lack of autonomy, training, and
technical assistance, authors Michal Gal and Taimoon Stewart suggest the
implementation of Joint Enforcement and Advocacy Agreements or
cooperation agreements among member states.
Additionally, solutions to the gaps can also be learned from the EU. In the EU,
the Directorate-General of the European Commission has broad powers in the
detection and investigation of competitor cases, such as provisions for surprise
inspections (or dawn raids). Moreover, there are limits to judicial review
7
when a decision of the European Commission is appealed since courts are
usually constrained to the legality of decisions, not merits.
Finally, the researcher will seek to propose as another solution of a regional
effort for consolidated guidelines on investigating competition cases. These
guidelines to be adopted by the CCC will seek to guideline NCAs on
recommended procedures for the Complaint phase, Investigative Phase,
Hearing Phase and Adjudication Phase of investigations.
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METHODOLOGY
The researcher has employed the primary research methodology of a critical
legal analysis as she examines gaps of the transmission of competition policy
to local legislation and engineering of NCAs within the region.
With the aid of journal articles and textbook written by learned authors on
competition policy and case law reviews of decisions emanating from the
CCC, national competition commissions in Guyana, Jamaica, and Barbados
the researcher aims to reinforce her conclusions. However, due to the recent
nature of the Caribbean Community’s competition law policy, only a few
cases were able to be gathered and thus examined.
The enforcements systems in the Caribbean Community and the European
Community would be primarily examined since competition policy in the
region emanates from the EU.
The researcher would additionally from her personal experiences as Legal
Officer of the Competition and Consumer Affairs Commission (CCAC) of
Guyana and with the help of selected case studies in this jurisdiction, examine
various competition issues.
It should be noted that the implications of the highlighted gaps for the NCAs
and the parties involved will additionally be analysed. Moreover, finally, the
research would conclude with possible solutions to remedy the shortcoming
highlighted in this paper.
9
LIST OF ABBREVIATIONS
CARICOM- Caribbean Community
CCAC- Competition and Consumer Affairs Commission (Guyana)
CCC- CARICOM Competition Commission
CCJ- Caribbean Court of Justice
COTED- Caribbean Council of Trade and Development
CFTA- Competition and Fair Trading Act
CSME- Caribbean Single Market and Economy
DoJ- Department of Justice
ECN- European Competition Network
ECNHR- European Convention for the Protection of Human Rights and
Fundamental Freedoms
EU- European Union
EEU- European Economic Community
ENQUIRY- Full investigation of the CCC
FCA- Fair Trading Commission
NCA- National Competition Authority
OECD- Organisation for Economic Cooperation and Development
RoP- Rules of Procedures
RTC- Revised Treaty of Chaguramus
RJCAS- Regional Competition Law Agreements on Joint Enforcement and
Advocacy Agreements
SMEs- Small and Medium Sized Enterprise
TFEU- Treaty of the Functioning European Union
UNCTAD- United Council for Trade and Development
10
VABER- Vertical Agreement Block Exemption Regulations
11
INTRODUCTION
1.0 Why is Competition Policy Important?
Competition law regulates competition on a market by prohibiting anti-
competitive conduct of companies. The reason why countries around the
world are eager to enact competition law legislation is due to the benefits of a
productive/ growing economy and level playing field that market players must
comply with, which guarantees competition. 7
A productive economy is created since inefficient and over priced
monopolistic companies are ‘weeded out’ of the market and replaced by
efficient firms offering lower prices and better quality goods and services. 8
Moreover, for existing businesses to compete on the market, this must
innovate and create new products, offer more variety or do an overall
restructuring of business activities to continually and profitably compete on
the market.9
Another profound benefit of competition policy is the creation of a level
playing field. Firms competing in a market must all uphold competition policy
rules such as not to abuse their dominant position or engage in anti-
competitive agreements. Thus companies will be able to capitalise a market
on their merit, not improper behaviour or tactics.
If competition laws did not exist, dominant companies would operate to
maximise profits with little consideration to consumers and improving goods
7 Lowe, Phillip etal, ‘Modernization and Beyond: The Role of Competition Policy in Driving Economic Growth’ (2005) European Competition Journal <http://www.tandfonline.com/doi/pdf/10.5235/ecj.v1n1.> accessed 1st October, 2016 , 368 ibid9 ibid
12
and service they are producing. Thus competition legislation keeps the cycle
of continuous innovation alive, with the constant challenging of existing high-
profit companies. 10This innovation cycle of creating new products (of an
existing firm) is additionally further shortened to a quicker time frame, to
compete in the race with other innovators for state of the art products.11
1.1 Main Importance within the Caribbean Community
In 2001 the Caribbean Community began implementing its competition policy
through the RTC. Before the RTC came into effect in 2001, the Treaty of
Chaguaramas became operational in 1973, and Caribbean Single Market and
Economy (CSME) was implemented to promote a single market by
eliminating all tariff barriers within the Region.12 However, one of the results
that occurred, with the removal of trade barriers, was that both enterprises on
the market both public and private began to allocate markets among each other
(so as to safeguard for example an existing market player’s territory) or
formulate anticompetitive agreements such as price fixing.13 Member states of
CARICOM therefore formulated its policy on competition protection and
appointed CARICOM Competition Commission (CCC) to deal with cross-
border competition concerns of the Region.14 It can therefore be asserted that
competition policy goals are to create a single market and ensure that goods
and service are integrated regionally, in keeping with the objectives of the
CSME.15
10 Lowe (n7) 3611 Ibid 3712 Stewart (n 1) 213 ibid14 Dabbah (n 3) 40015 RTC Article 169
13
Taimoon Stewart observes that if two regional competing petroleum firms in
Trinidad and Barbados engaged in anticompetitive conduct, it could affect that
relevant market for two or more countries.16 Stewart, therefore, asserts that the
likelihood of dangers is real for CARICOM to be susceptible to
anticompetitive conduct of large firms.17 Stewart suggests that territories have
changed their products of export to combat the erosion of preferential markets;
however, globalisation and the international integration of goods have made it
hard for the region to compete.18 In the advent of globalisation, it is, therefore,
submitted that it is imperative that countries within the region integrate.
1.2 Why the three selected Countries?
This paper will discuss competition policy as it relates to three CARICOM
countries namely Jamaica, Barbados and Guyana. This selection was done
mainly because within the Region these jurisdictions have been able to
establish full functioning competition agencies that complement the work of
the CARICOM Competition Commission. Other jurisdictions such a Trinidad
and Tobago have competition legislation, but its NCA has not been able to
become fully functioning.
Before we can consider the depth of competition offences that were
transmitted to the region it is worthwhile to consider, the reason for its
development in the EU and the ranged of offences the EU caters for due to the
similarities in the wording of the law in the Caribbean Community.
16 Taimoon Stewart, ‘Regional Integration in the Caribbean: The Role of Caribbean Policy’ (ed), Competition Policy & Regional Integration in Developing Countries (Edward Elgar Publishing Limited 2012) 16517 ibid 16118 ibid 165
14
CHAPTER 1
2.0 Competition Policy under European Union
With the formation of the European Community in 1957 (or Treaty of Rome)
and the creation of a single European Community market, it became
imperative for competition policy to safeguard the market from the
establishment of trade barriers and to ensure free competition in trade.19 The
main features of European Community Competition Rules emerged as being
to restrict anticompetitive conduct that impedes restricts or distorts
competition.20 The EU adopted the TFEU in order to guarantee fairness on the
single market when trading; the TFEU prohibits competition offenses, under
Articles 101, 102 (formerly Article 81 and 82) for anti-competitive agreements
and abuse of a dominant position respectively. Illegal state aid is regulated
under Article 107 and 108 of the TFEU. Merger control is regulated under
Merger Regulation 139/2004 for mergers that have a community dimension
and sets out the procedures wherein concentrations between undertakings are
subject to the approval by the European Commission. Under Article 105 of the
TFEU, the European Commission, and the national competition authorities are
the regulators that are empowered with extensive investigative powers. The
European Commission and NCAs, have investigative powers under Article
101 and 102 offenses are further elaborated in Regulation 1/2003. Regulation
1/2003, additionally, in essence, gives member states the authority to
determine which body will enforce Article 101 and 102, after which powers
are conferred on that requisite body.
19 Willy Schlieder, ‘ European Competition Policy,’ (1981) 50 Antitrust Law Journal <http://www.jstor.org/stable/pdf/40842674.pdf> accessed 1st October, 2016, 64920 ibid
15
It should be noted that enforcement by the European Commission is preferred
over NCAs in some key situations. These include cases where the (i) three
member states are affected by the anticompetitive behaviour in a relevant
market. (ii) Because of its close links to EU rules, the EU Commission will be
more efficient. (iii) There is insufficient policy in the area, and a Commission
decision is needed to develop policy and (iv) the Commission will be the most
effective at enforcing competition rules.21
2.1 TFEU enforced by NCAs and European Commission
As discussed competition offences in the EU are provided in the TFEU and
Merger Regulation 139/2004 EC. This section will examine these offences in
detail to compare the depth of offences that are catered for in developed
regions such as the EU, to consider whether any of the offences/regulations
may apply to the Caribbean’s reality.
2.3 Enforcement of Anti-competitive agreements
Article 101 of the TFEU prohibits restrictive agreements between independent
firms. Agreements are horizontal if they are among competitors and vertical if
they are between manufacturer and distributor, so long as a horizontal or
vertical agreement is restrictive it is prohibited under Article 10122. Moreover,
decisions by associations and concerted practices are also prohibited. 23In
proving an offense under Article 101 that agreement must have the ‘object or
effect’ of distorting competition within the common market of the EU.Further,
21 Slaughter and May, ‘Overview of Competition rule’ <https://www.slaughterandmay.com/media/64569/an-overview-of-the-eu-competition-rules.pdf> accessed 20th September, 201622 Richard Whish, Competition Law (8th edition Oxford University Press 2015) 8423 ibid
16
the effect must be ‘appreciable’ on competition and trade between member
states.24
2.4 Exemptions/Exclusions for 101
Article 101 (3) of TFEU is the legal exemption to offenses under Article 101 if
consumers benefit from the improved production of the good or service or
there is a nurturing of ‘technical or economic’ progress. Further, the
agreement must not contain restrictions that could prevent firms from meeting
the above exemption or have any the likelihood of eliminating competition to
a substantial amount of the products.25 Additionally, agreement, decision or
concerted practice qualifies to be exempted where it fits the criteria set out in
the Vertical Block Exemption Regulation VABER (discussed below) or if an
individual exemption is granted the following notification by the European
Commission.26
2.5 Enforcement of Abuse of Dominance
Article 102 of the TFEU prohibits abuses by independent firms of a dominant
position that within/substantial part of the internal market. These dominant
companies may engage in unilateral abusive conduct that is exploitative or
exclusionary. Exploitative conduct such unfair and excessive pricing whereas
exclusionary conduct may be exclusive dealing, tying and bundling, predation
and refusal to supply.27 Overall the result of these practices is that trade would
be affected between member states.
2.6 Enforcement of State Aid
24 Whish (n 22) 15425 ibid 158; Article 101 (3)26 Whish (n 22)17827 ibid 213-214
17
State aid connotes the granting of an advantage (something not attainable in
open market) to an undertaking (engaged in economic activity) that has the
potential to distort competition and trade in the EU.28 Article 107 and 108 of
the TFEU are the requisite provisions which monitors state aid. Since state aid
distorts or threatens to distort competition and affect trade between member
states, the European Commission has investigative authority.29 In some
circumstances, State aid will nevertheless be permissible because they
promote legitimate objectives in a proportionate manner. Article 107 (2) and
(3) TFEU, therefore, lists the instances where aid is considered acceptable.
However, all other forms of aid that undermine, the objectives of the Treaty
rules on competition, is prohibited.
2.7 Enforcement of Merger Control Regulation
Council Regulation 139/2004 (EUMR) regulates and controls concentrations.
For this to apply there must be a concentration (between two or more
‘undertakings’) and the turnover of each undertaking must be within the
specifics of the regulation.30 The substantive test of whether a concentration
ought to be controlled turns on whether it impedes competition.31 For
concentrations lacking an EU dimension they ought to be investigated by
NCAs, and exceptions to this general rule occurs where parties engage in pre-
notification contracts with the authorities to reallocate jurisdiction to the
Commission or between NCAs. 32Moreover, for concentrations with an EU
28 Sandra Colino, Competition Law of the EU and UK, (7th Oxford University Press 2011) 41329 ibid 41730 ibid 36031 Whish (n 22) 87332 ibid
18
Dimension member states can additionally apply their local laws, in limited
circumstances.33
Procedures/Guidelines Adopted
The EU legal regime contains numerous procedures, guidelines, and notices
for enforcement of the competition offenses listed above. It is beyond the
scope of this dissertation to discuss all of these accompanying rules. What the
researcher, however, would like to discuss, however, is the Block Exemption
Regulation for Vertical Agreements (VABER) under Article 101 of the TFEU
and the Guidelines for Enforcement Priorities of Article 102 offenses; due to
its relevance to the Caribbean Community that will be discussed later.
With respect to, the Regulation 330/2010 (VABER), vertical agreements that
satisfy certain conditions are guaranteed the protection of the VABER
irrespective of whether they produce a positive or negative effect.34 If the
vertical agreement however, is incompatible with the Article 101 (3)
exemption criteria then it is not covered and therefore infringes Article 101 (1)
as a hardcore restriction e.g. price fixing and resale price
maintenance.35Additionally, the Commission’s Notice on Guidelines on
Vertical Restraints sets out principles for determining whether a vertical
agreement fits under Article 101 of the TFEU. The guideline, therefore, lists
the type of agreements that are not covered which include (i) Agreements of
minor importance and SMEs (ii) Agency Agreements (iii) Subcontracting
agreements. 36
33 Whish (n 22) 87334 Colino (n 28) 20835 ibid 20836 Colino (n 28) 208
19
The Commission Notice on the Enforcement of Priorities (that was mentioned
earlier) applies to Article 102. Accordingly, two forms of conduct impinge on
Article 102 namely conduct that is exclusionary which causes a foreclosure
effect of market players and conduct that is exploitative for example
excessively high prices or other behaviours that undermine the internal
market.37 The Commission therefore in the Guidance lists as a priority for
enforcement exclusionary conduct. Article 102 applies where an undertaking
abuses its dominant position in a market (single dominance) and where there is
more than one undertaking it is considered collective dominance. 38 It should
be noted that this ‘Guidance’ is not obligatory on the European Commission or
NCAs.
Having discussed how EU formulated its competition regime, the research
would now consider how competition policy was formulated in the Caribbean
Community.
CHAPTER 2
3.0 Transmission of Competition Policy to the Caribbean Community
37 ibid38 ibid 293
20
The Caribbean comprises of countries that border the Caribbean Sea.
CARICOM (Caribbean Community) is an organisation that consists of 15
countries within the Caribbean community including Guyana, Belize,
Suriname (former Dutch colony) and Haiti (former French colony) See
Appendix 1 for a map of the Region. The member states of CARICOM have
joined more than 100 states around the world in enacting competition
legislation.
As discussed earlier, the RTC of the Caribbean Community, seeks to ensure
that the objectives of the CSME namely regional integration by implementing
a single market free of barriers to trade in goods. Thus, sections of the RTC
now ensures that enterprises both public and private cannot frustrate the
CSME by anti-competitive business conduct such as dividing up the market,
price fixing, predatory pricing, etc. As mentioned earlier, the RTC names the
CCC as the principal agency responsible for enforcing cross-border abuses.
What is evident in the CCC is the lack of decisional autonomy.
An agency is considered to have supranational authority if it can make its
decisions independently, has institutionally autonomy, and the laws of the
organisation have binding effect. 39In essence, that agency is capable of having
authoritative powers over member states.40 In identifying whether an agency
has supranational authority, consideration needs to be given to the legal
personality (or actual attribution of rights in the treaty) of the organisation.41
Article 174 of the RTC lists the intervention powers of the CCC as being:39 Fagbayibo B, ‘Common Problems Affecting Supranational Attempts In Africa: An Analytical Overview’, (2013) 16 (1) Potchefstookm Electronic Journal < http://www.nwu.ac.za/sites/www.nwu.ac.za/files/files/p-per/issuepages/2013volume16no1/2013%2816%291FagbayiboDOC.pdf> accessed 1st October, 2016, 3340 Fagbayibo (n 39) 3341 ibid
21
‘Subject to Article 175 and 176 the Commission may in respect of
cross-border transactions, or transactions with cross-border effects
monitor investigate, detect, make determinations or take action to
inhibit and penalise enterprises whose business conduct prejudices
trade or prevents, restricts or distorts competition within the CSME.’
Thus it is clear that its role of the CCC is essential to investigate cases that are
cross-border in nature and make determinations. For the CCC to act, however,
Member state can file either a complaint to the CCC (about a cross-border
effect or practice in another member state) or petition their member state to
make a recommendation to Caribbean Council of Trade and Development
(COTED) to engage the CCC. 42 The CCC is additionally given the powers to
investigate a case only after it has requested an investigation by a member
state and that member state’s investigation was unfavourable.43 Thus it is clear
that the CCC does not have decisional autonomy to decide when and if to
investigate in competition matters. In the Caribbean Community, a member
state is expected first to investigate and determine an infringement based on its
own competition legislation ( produce a preliminary report) and thereafter
refer it to the CCC if it involves cross-border issues; this lack of supranational
powers of the CCC is to ensure member states maintain the sovereignty of
enforcement in competition matters.
As was mentioned, in the UK, Both the European Commission and NCAs
have the authority to apply Articles 101 of 102. In particular, cases, as was
noted, application to the European Commission is preferred to NCAs.44 These
42 Article 175 RTC43 Article 176 RTC44 Slaughter and May (n 21)
22
situations include where three member states are involved in the relevant
market or (ii) the agreement would be better served being applied to the EU
Commission given its close links to EU rules.45
3.1 Specific Competition Offenses mentioned in RTC
Under the RTC, Article 177 (2) regulates anti-competitive business conduct
which includes activities such as indirect or direct fixing of selling prices,
predatory pricing, price discrimination, loyalty discounts or concessions, etc.
Article 179 (1) regulates the abuse of dominant position by prohibiting
activities that restrict entry of an enterprise or deters an enterprise competing
on the market or eliminates an enterprise from the market among others. For
any of the activities mentioned above to be in violation of the RTC they must
significantly inhibit regional integration and the creation of a single market
contrary to the objectives of CSME. Article 181 is the De Minimis Rules that
prescribes that the Commission may exempt from the provisions business
conduct that has minimal impact on the objectives of CSME. It should be
noted that merger control regulations or state aid are not mentioned in the
RTC.
Since the RTC caters for two main competition offences namely
anticompetitive agreements and abuse of dominance, below we will examine
how this transcends to competition legislations in local member states.
3.2 Legislative Protection afforded to NCAs in Caribbean Community
45 ibid
23
As mentioned, three jurisdictions have full functioning competition
commissions; these include Barbados46, Jamaica47, and Guyana.48 This section
will focus on the competition protection in the legislations in these territories.
3.2.1 Barbados
The Barbados Fair Trading Commission, which operates under the Fair
Trading Commission Act (FCA) CAP 326B and 326C among other acts,
regulates competition policy enforcement. According to section 4(1) of The
Fair Trading Commission Act of 2002, the functions of the Barbados Fair
Trading Commission is to enforce fair competition along with consumer
protection and the Utilities Regulation Act.
Part III of the Fair Competition Act CAP 326C prohibits the offences of anti-
competitive agreements, abuse of a dominant position, mergers and
interlocking directorships. Section 13(3) prohibits anti-competitive agreements
that fall under the specific subsections listed. Similarly, section 16 (3) sets out
the subsections for abuse of a dominant position. Merger control is regulated
under section 20 of the FCA CAP 326C. State aid is not yet regulated.
3.2.2 Jamaica
The Jamaica Fair Competition Act (FCA) of 1993 prohibits anti-competitive
behaviour more specifically, agreements that lessen or distorts competition
and the abuse of a dominant position by monopolistic companies. Section 17
(2) and section 20 of the FCA of Jamaica which deals with anticompetitive
agreements and abuse of a dominant position, respectively, are very similar to
46 Barbados Fair Trading Commission47 Jamaica Fair Trading Commission48 Competition and Consumer Affairs Commission of Guyana
24
13 (3) and 16 (3) of Barbados FCA. Like Barbados, we see the similarity in
the anti-competitive abuses that are listed in the Act namely resale price
maintenance, tied selling, price fixing, collusion and cartel and bid-rigging.
There are no prohibitions to mergers and state aid in the FCA of Jamaica.
3.2.3 Guyana
The Competition and Fair Trading Act (CFTA) of 2006 prohibits anti-
competitive abuses. According to section 6 (1) of the CFTA of 2006, the
CCAC can commence an investigation (either on its own accord or a person)
into matters that offence the Act. In examining its provisions on competition
enforcements for anticompetitive agreements and abuse of a dominant
position, it can be observed that section 20 (2) and 24 (1) of the CFTA is
similar to sections above 13 (3) and 16 (3) of the FCA of Barbados
(aforementioned). Guyana like Jamaica has not adopted provisions on mergers
and state aid.
3.2.4 Exemptions and Exclusions
Anticompetitive agreements and firms engaged in abuse of dominance
practice may be exempted. Section 20 (2) and 24 (3) of CFTA of Guyana
states that (for anticompetitive agreements and abuse of dominant position) if
there is a resulting benefit to consumers namely they benefit from
improvements in the production of goods or services, or additionally the
practice gives rise to technical or economic progress. Similarly, exemption
provisions for anticompetitive agreements and abuse of dominance are found
in Jamaica and Barbados.49
49 Section 17 (4) and 20 (2) of the FCA of Jamaica and 13 (4) and 16 (4) of the FCA of Barbados.
25
Similarity of Wording/ Law
It should be noted that as a result of Caribbean Community law being based on
EU competition law, there are similarities in the wording of the law. Phrases
such as ‘agreements which have the effect of preventing, restricting or
distorting competition are void,’50 ‘directly or indirectly fix purchase of selling
prices’51and ‘improving the production or distribution of goods and service’
52are all found throughout the three jurisdictions.
3.2.5 Rules of Procedures adopted by CCC
In 2011 the CARICOM Competition Commission adopted its Rules of
Procedure (RoP) 53 for competition enforcement, but this has not been
modelled by National Competition Authorities since they lack formally
adopted rules. From the CCC’s RoP, we see a clear outline in how a matter is
to be dealt with by the CCC. Thus, the Secretariat investigates a complaint and
produces an Investigating Panel Report. This Report is then issued through the
Executive Director of the CCC to the Adjudicating Panel for an Enquiry.54
This Adjudicating Panel is empowered under Regulation 36 to hold hearings
by certain specified written procedures. After the Adjudicating Panel is
satisfied, it shall adjourn a hearing to consider its decisions which will
comprise of the entirety of evidence for consideration.55
50 Section 20 (1) (b) of the CFTA of Guyana51 Section 13 CAP 326 C of Barbados52 Section 17 (4) (a) (i) of the FCA of Jamaica53 CARICOM Competition Commission, Rules of Procedure Report (2011) < http://www.caricomcompetitioncommission.com/images/registry/CCC-Rules-of-Procedure-2011.pdf> accessed 1 October, 201654 The term Enquiry is used to denote the fully investigation55 CCC RoP (n 50)
26
As a result of the RoP of the CCC, the CCC can effectively conduct
investigations and request participation by parties at the Enquiry stage of an
investigation. In the Case of Trinidad Cement Limited (TCL) v CCC56, in
considering whether the rights of TCL were infringed at the investigation
stage, the CCJ held that the Commission in conducting its investigation under
Article 174 (2) had not prejudiced TCL. From the evidence, TCL was only
aware of the investigation at the Enquiry stage. However, TCL could not
produce evidence in court that its participation in the enquiry was impaired
and therefore could not establish a full defence. Thus TCL has not established
any prejudicial acts of the Commission.57 Moreover, TCL also alleged that the
CCC failed to disclose documents relevant to the case at hand namely the fact
that the resolution that occurred at the Twenty-Sixth (26 th) Meeting of COTED
was not in keeping with Article 175 (2). The CCJ held that all the evidence
and information about the case was available the Claimant for him to use at
the trial thus the TCL cannot claim unfairness and non-disclosure.58
After competition laws had been adopted, the Region had to decide how each
NCA within the Region should operate and function in the enforcement of its
duties. The following Chapter will, therefore, discuss the engineering of
NCAs.
CHAPTER 3
4.0 Engineering of NCAs to Enforce Competition Laws
56 Trinidad Cement Limited (TCL) v CARICOM Competition Commission (2012) Original Jurisdiction Application No. OA 1,57 ibid para 2758 ibid para 43
27
In determining whether NCAs were indeed engineered to operate effectively
and regulate the offences listed in the above sections, an examination of the
autonomy and the overall structure of NCAs will be explored.
4.1 Independence
For an agency to be autonomous, it must be free from government influence.
The operational structure of Guyana, Barbados and Jamaica depicts
competition authorities of the above countries operating as an agency within a
government ministry. In Guyana, the Competition and Consumer Affairs
Commission is an agency of the Ministry of Business, Barbados- the Ministry
of Industry, International Business, Commerce and Small Business
Development and in Jamaica- the Ministry of Industry, Commerce,
Agriculture and Fisheries. Thus, the projection to the public that NCAs in the
Region operate independently from influences from government ministers is
necessary. Author Dabbah raises the issue that many competition agencies in
developing countries ‘have bite but no teeth’ in conducting investigations.
Dabbah asserts that competition authorities may lack independence to carry
out the work and reach final conclusions because the law may reserve
considerable powers to the relevant ministry and minister who plays a key role
in the regime and who enjoys executive powers over the work of the
competition authority and decision maker in actual cases.59
4.2 Overall Structure
In considering the effectiveness of the overall structure the researcher will
discuss the importance in the composition and structure of NCAs, whether
59 Dabbah (n 9) 315
28
NCAs are standalone or joint enforcement agency, there is a multiplicity of
purposes for the NCAs and the effectiveness of the remedies that have been
earmarked.
4.2.1 Composition and structure
In considering the composition and structure of the body of competition
authorities within the Region, we see that by section 1 (1) of the First
Schedule of the CFTA, the Body of Commissioners shall consist of members
from the private sector, legal profession and consumer affairs. Thus given the
likelihood that the body of Commissioners may be high ranking officials of
society, it is pertinent to ensure that Commissioners have adequate time to
serve effectively as members of the Commission. Dabbah observes that the
composition of competition authorities may comprise of high ranking
individuals who may be unable to give competition cases the necessary focus
and attention it needs, as such competition policy issues may be side-lined and
overshadowed by non-competition matters.60 Thirdly, the work of the
commission may not be sufficiently constant to lead to effective enforcement
of competition rules; the meetings which the competition authority is supposed
to hold may not be sufficiently frequent to enable effective competition law
enforcement and robust competition policy to take a foothold in the country
concerned. 61 Finally, Dabbah observes that in some countries, there is a
practice of ‘doubling’ officials which mean that those who handle the work of
the competition authority is also related to work within other government
60 Dabbah (n 9) 31561 ibid
29
agencies, often the Ministry of Trade and Industry. Inevitably, the chances for
effective enforcement are overstretched and less productive.62
4.2.2 Joint/Standalone Agency
Having discussed in the previous Chapters on the legislative powers entrusted
to NCAs in the Region, it is clear that the legislation makes NCAs distinct
without the obligation for joint enforcement with other enforcement bodies/
NCAs. NCAs, as mentioned, are only expected to cooperate with the CCC in
matters concerning cross-border disputes. Thus this agency structure allows
NCAs to respond to new developments ‘on the spot’ without ‘going up the
ladder’ and getting approvals for decision. Effective coordination with other
departments within the agency will also be easy since it is one enforcement
body.
However, it should be noted that other agency models, allow for collaboration
between many enforcement bodies such as in the US, with collaborations
between Federal Trade Commission (FTC) and the Department of Justice
(DoJ) Antitrust Division shared authority on Mergers. 63 Muti agency
enforcement partnerships, on the other hand, serves as a guarantee that a
competition complaint would be investigated notwithstanding such national
issues such as resource constraints both human and financial, corruption such
as ministerial influences at NCAs, political power, etc. 64
4.2.3 Single and Multiple Purpose
62 Dabbah (n 9) 31563 William Kovacic etal, ‘Competition Agency Design: What’s on the Menu,’ (2012) 8:3 European Competition Journal <http://www.tandfonline.com/doi/pdf/10.5235/ECJ.8.3.527?needAccess=true> accessed 1st October 2016, 53264 Kovacic ( n 63 ) 532
30
Another factor in the effectiveness of NCAs stems from the multiplicity of
functions/ purpose of the NCAs. Most competition agencies often engage in a
multiplicity of duties in addition to competition protection. A single use
agenda benefits NCA since it can clearly establish its institutional brand.65
From the three jurisdictions studied in this paper, it is clear that only Jamaica’s
NCA operate for the sole purpose of competition protection. In Guyana, the
CCAC has coupled its competition enforcement with consumer protection. In
Barbados, competition policy is enforced in addition to consumer complaints,
and utility claims.
4.2.4 Remedies
The effectiveness of an NCA also turns on the penalties it imposes. In the
previous Chapter, we have discussed the penalties for various competition law
offences with NCA in the Caribbean Community. According to Kovacic if
competition agencies have a combination of criminal and civil penalties, it
portrays NCAs as credible to deter enterprises from violating competition
laws. 66From the three jurisdictions that have been discussed in this essay, we
see that all three of NCAs have harsh penalties for competition violations.
In addition to the factors of autonomy and overall structure; an NCA’s
effectiveness also depends on the model it chooses to follow.
4.1 Traditional Administrative Model v Prosecutorial Model
65 William (n 62) 53366 ibid 534
31
NCAs through its national competition law legislation may choose to adopt
either the traditional or prosecutorial model in its enforcement of competition
laws. The traditional administrative model can be found in the European
Commission where investigative and adjudicative powers are vested in a
single agency. After a matter is adjudicated on by the European Commission,
parties have a right to challenge the agency’s decision in the courts.67 Earlier
we mentioned that the European Commission has the power to enforce Article
101 and 102 from Regulation 1/2003 but exactly how does European
Commission operate?
Within the European Commission, the Directorate-General for Competition
has the responsibility to investigate and formulate a preliminary opinion for
breaches of EU Competition laws.68 Investigations of potential competition
law violations are allocated to a particular Directorate within the European
Commission and to be appointed a case team.69 If investigations uncover a
possible breach, the Commission has the power to file a ‘Statement of
Objections’ which describes the conduct and outlines the Commission’s
preliminary assessment of that conduct.70 If the preliminary assessment
suggests that a breach has occurred, the parties can choose to settle by giving
an ‘undertaking,’71 however, if no ‘undertaking’ is given, a hearing officer
would commence a hearing. After the hearing the DG Competition drafts a
preliminary decision that is vetted by the Commission’s lawyers and presented
to the body of Commissioners who decides whether to adopt the DG
67 Arlen Duke, ‘Public Enforcement’ in John Duns and Brendan Sweeney (ed.), Comparative Competition Law (1st edition Edward Elgar Publishing Limited 2015 ) 27268 ibid 27369 ibid 27270 ibid71 ibid
32
Competition regulations.72 The Commission’s decisions are, therefore, binding
on companies or individuals to whom it is addressed. However, third parties
with a particular interest in the matter or a firm found to have breached the
laws can appeal to a General Court on both legal and factual grounds.73 Thus it
can be established that the Commission is empowered to investigate, enforce
and punish an offending party. Adjudication is not separated to be a function
performed only by the body of Commissioners since the DG Competition
submits a preliminary decision on the matter to the Commissioners only for
ratification.
On the other hand, the prosecutorial model enforcement agency comprises of
an executive body charged with the task of investigating and prosecuting
suspected breaches of the law. Adjudication is separated and pronounced by
either a general court or specialist tribunal. Thus the agency focuses on the
prosecution of the offending party and leaves the decision-making powers to
an expert/specialist tribunal or generalist court. Many agencies usually prefer a
specialist court.74An example of this model is the US Department of Justice
(DoJ) that can open and conduct investigations. The DoJ lacks any powers to
impose sanctions. In imposing sanctions of a suspected breach of US antitrust
rules, a civil or criminal suit is brought by the Federal District Court. The
decisions of the Federal District Court is appealable only to the Court of
Appeal (District).75
Below we would consider the specific model that is followed in the Caribbean
community.
72 Duke (n66) 27273 ibid 27474 ibid75 ibid 275
33
4.2 Specific Models Followed by Caribbean Community
Guyana
In Guyana, it is evident that enforcement of competition offences through the
CCAC incorporates the administrative model. According to section 6 (e), the
Commission can take any action that may be appropriate to combat and
eliminate abuse of dominance and anti-competitive agreements. Moreover,
hearings can be conducted by the Commission in section 7 (3) through the
Commission’s power to summon and examine witnesses in a hearing,
administer the oath and call for and examine documents. The exact specifics
of how the Commission thereafter arrives at its decision is not stated in the
Act, and there are no final rules of procedures in this regard. From the
researcher's experience, the Director compiles a preliminary investigation
report and submits it to the Board of Commissioners for final decision.
Enforcement powers in adjudication are also given to ‘the Commission.’
According to the CFTA, ‘the Commission’ under section 7 (1) (a)- (h) has the
power to make termination orders as well as impose ‘cease and desist’ orders.
Additionally, in section 22 (2) ‘the Commission’ can order compensation to an
aggrieved party as the Commission finds and if the conduct as it relates to
anti-competitive agreements persists and the party fails to terminate the
conduct they are liable to a fine of 50 million dollars and imprisonment for
one year.
4.2.1 Jamaica
In Jamaica, ‘the Commission’ has investigative powers by section 5 (1) (a) to
carry out investigations of anti-competitive business conduct in Jamaica. In
34
conducting its investigations, ‘the Commission’ has the power to conduct
hearings by section 7 (1) and summon and examine witnesses, administer
oaths and require documents to be submitted to the Commission, etc. Like
Guyana the exact specific in how the Commission thereafter arrives at its
decision is not stated in the Act, neither is there final RoP in this regard. Thus
the reasonable assumption is made that the Director afterwards presents a
preliminary report and submits it to the Body of Commissioners for final
decision. After a final decision has been made, the Commission’s powers are
limited under section 21 (a)-(b) to only notifying the enterprise of the finding
and directing them to take steps that are necessary to overcome the abuse.
Enforcement powers of adjudication are enforced strictly in the court and not
the Commission. According to section 47 (a), ‘the court’ is empowered to
order the offending party to pay individual fines that would not exceed one
million dollars and company fines of not more than five million. Moreover, in
47 (b) the Court can grant injunctions restraining the offending party from
engaging in the anticompetitive conduct.
4.2.2 Barbados
In Barbados, ‘the Commission’ is empowered to carry out an investigation for
competition law infringements under Section 5 of the Fair Competition Act.
Hearing are performed during the investigation, by the Commission in
accordance with section 6 (5) and the Commission is empowered to summon
witnesses to provide information on any matter. Unlike Jamaica, mentioned
above, enforcement powers in adjudication are given to the Commission, and
under section 15 the Commission shall serve notices on a party mandating
them to terminate the agreement. Failure by parties entails penalties under
35
section 15 (2) of a fine $150,000 in addition to (under 15 (2) (b)) 10 % of the
annual turnover of the enterprise.
4.3 Commentary
Thus it is asserted that provisions in the FCA of Jamaica suggest that there is a
shift towards the prosecutorial model of enforcement since the legislation
specifies that it is the court that has powers of adjudicating cease orders etc.
Meanwhile, on examining legislations in Guyana and Barbados, it seems that
both jurisdictions may be following the administrative model since there is a
mixing of roles of enforcement. In this Guyana and Barbados, it is clear that
the Commission authority ranges from investigative prosecutorial and
adjudicative rights. Adjudication power follow from the ability to prescribe
cease and desist orders etc.
As a result of the transfer of competition laws to the Caribbean Community,
renowned authors have discussed exhaustively that the region faces gaps in
enforcement. These gaps also have severe implications for the Commission
and parties involved.
36
CHAPTER 4
5.0 Implications of gaps in competition laws to CCC and NCAs
5.0. Implications of wording of RTC
Under the RTC, we have alluded to the fact that the CCC does not have
decisional autonomy, due to the constant interception of COTED. As
discussed, if the CCC observes a cross-border anti-competitive conduct, it
must wait for a member state to raise its concerns at a COTED meeting.
COTED thereafter must pass a resolution for the CCC to act. Otherwise, one
of the affected member states must make a complaint directly to the CCC after
it has compiled a preliminary report. Moreover, after the preliminary report
has complied and there may be any disagreements as to who should conduct
the investigation the CCC must cease any further examination of the matter
and refer it to COTED for a decision. The CCC is therefore constrained by the
decisions of COTED a political body. The RTC’s deliberate decision not to
accord to the CCC decisional autonomy and a supranational status in a liberal
sense stems from the reluctance of member states to surrender sovereignty. 76
Taimoon Stewart, therefore, calls the CCC ‘lame duck’ since COTED (which
comprise of member states) can determine the CCC’s mandate and actual
work in practice and can prevent the CCC from conducting an investigation
into a situation even though the CCC may perceive it to be anticompetitive.77
Moreover, in the investigation of cartel cases, which require high levels of
secrecy and confidentiality cartel cases may not be able to be effectively
76 Stewart (n 2) 277 ibid
37
investigated by NCAs with COTED involved.78 Thus for parties involved they
must at all times first make a complaint to their NCAs.
5.02 Implications in Wording of the Law and Offenses
However, having examined the legislations of Guyana, Jamaica, and Barbados
in comparison to the TFEU of the EU it can be observed that there are little
provisions for merger control (only Barbados) and no provision for illegal
state aid. Merger control enforcement is provided for in the UK enforcement
system with detailed guidelines as to which mergers may ‘raise a red flag’
given their concentrations and annual turnover. In the region, the RTC does
not mandate member states to enact merger control rules, and as mentioned so
far only Barbados has enacted limited rules on merger control. Developing
countries that have small economies sometimes argue that merger control
regulations are not needed due to the need for alliances in small economies.79
This argument is coupled with the fact that the public has little knowledge or
interest in the benefits of competition and how it can regulate mergers.80
Moreover, on the prohibition of state aid, public authorities within the
Caribbean region do provide aid to companies. State aid usually takes the form
of subsidisation for example aid to a national air carrier (as evidence in
Trinidad and Tobago subsidisation of Caribbean Airlines)81 or the
subsidisation of a five-star hotel (as evidence in Guyana’s subsidisation of the
78 Stewart (n2) 279 ibid80 Meetings of Caribbean Community Competition Commission meetings held in Jamaica, 201481 RJR News, ‘Government Subsidy for Caribbean Airlines Slashed,’ <http://rjrnewsonline.com/regional/government-subsidy-for-caribbean-airlines-slashed> accessed on 20th September, 2016
38
Marriott Hotel).82So far, however, the region is void of any competition
regulations against illegal state aid. Over the years, arguments have instead
arisen pointing to the small economy of many states within the region and the
need for such subsidisation.83
In addition to the omission of the offences concerning merger control and state
aid, learned author Maher Dabbah discusses some other omissions usually
present in developing countries that are also present in the Caribbean
Community namely adequate clarity as to vertical restraints and sections of the
offence of abuse of dominance.
On vertical restraint, Dabbah suggests that many developing countries lack
adequate mechanisms for dealing with vertical restraints. According to him
while it is true that legislations may provide a reference to vertical restraints,
the reference is not sufficient to clarify the approach needed on policy issues
relating to vertical agreements or the approach required for competition
authorities.84 Vertical restraints have mostly been given attention in the
develop world.85 We have discussed the UK regulatory regime as to vertical
restraints. The UK system comprises of the Vertical Block Exemption
Regulations (VABER) which seeks to safeguard vertical agreements so long
as they meet the necessary criteria as mentioned in the VABER. Additionally,
the Vertical Guidelines names the types of vertical agreements not enforceable
under Article 101.
82 Taroom khemraj, ‘The Proposed Kingston Marriott Hotel and Tourism,’ (2012) http://www.stabroeknews.com/2012/features/12/27/the-proposed-kingston-marriott-hotel-and-tourism/ accessed 20th September 201683 Stewart (n2) 284 Dabbah (n4) 32685 ibid
39
In the Caribbean, guidance on enforcement of vertical restraints is limited.
For example, in Guyana section 20 (3) of the CFTA we see the legislation
exempting ‘agreements’ which contributes to the improvement of production
or promotes technical or economic progress to which consumer receive a
benefit. Thus, in this section, there is only an implicit exemption to vertical
restraints since horizontal agreements cannot produce any technical or
economic benefit to consumers. However, the legislation does not go any
further in mentioning, as in the UK, the types of vertical agreements not
enforceable under section 20 (3) or what kind of vertical agreement not
enforceable under of 20 (1).
On Abuse of dominance and monopolisation, Dabbah suggests that sections
concerned with the prohibition of abuse of dominance may be worded to
mention only an excessively low selling price as amounting to an abuse of
dominance.86 However, in the field of competition law lower prices by firms
would be condemned and prioritised only where it is coupled with harmful
abuses such as predatory pricing or where the lowering of price causes price
discrimination. Moreover, the lowering of prices is ‘harmful’ if it is used to
bring about foreclosure such as to exclude competitors or prevent entry into
the relevant market.87 In Guyana section 24 (1) (d) of the CFTA prohibits the
imposition of unfair selling prices, however, there are no supplemental rules
that give further guidance. Ideally, as mentioned, it is only the ‘harmful’
abuses stemming from the imposition of unfair selling prices (that is to say
predatory pricing or price discrimination) that should be condemned by the
Commission. In the previous Chapter, we have discussed that in the UK the
86 Dabbah (n 4) 32687 ibid 327
40
enforcement of Article 102 of TFEU is coupled with the Commission’s Notice
on Enforcement Priorities. This Notice specifies guidance as to which abuses
are more harmful than others and priority in enforcement is given to the most
harmful abuses.
For the NCAs, in arriving at its decision as to whether an agreement is a
vertical agreement, exempted under the exemption sections of the local
legislation; will inevitably only have the wording of the legislations to rely on
in arriving at its decision (as opposed to detailed guidelines as in the UK).
Similarly, NCAs would not have any guidance as to which abuses are more
harmful than others and a priority in the offence of abuse of dominance. On
the limitations in the listing of competition offences- competition enforcement
will be limited to what is provided in the RTC and local legislations for NCAs.
Moreover, for the parties, Both private and public companies will feel the
effects of companies merging unabridged and impeding competition. By
Recital 25 of the EUMR, UK mergers are regulated, where the concentration
significantly affects the relevant market in the EU with the strengthened
dominant position of the enterprise. Similarly, on state aid, private companies
may feel the adverse effects of loss in fair competition with public authorities
providing aid ‘at will’ to an enterprise. In the UK under Article 107 and 108 of
the TFEU, state aid that gives an unfair advantage to an undertaking by
favouring it over other undertakings to the extent that it affects trade between
states are prohibited. In principle, all forms of aids that undermine the
principles of competition, and an open market are condemned; if they do not
then, they are permissible under Article 107 of the TFEU.
41
5.0.3 Implications in Detection and Investigation
During the conduct of an investigation, the CCAC is empowered under section
14 (2) (a)-(b) to send an investigator (after a warrant has been issued). That
investigator can enter and search premises and for the intent of making copies
inspect and remove documents or extracts in possession of a person. Similarly,
the Jamaica Fair Competition Act specifies that the power to enter and search
premises is given to an ‘authorised officer’ after he has obtained a warrant. On
the other hand, the Barbados Fair Competition Act states in section 7 (1) (a)-
(c) that ‘the Commission,’ having also obtained a warrant, has the powers to
enter and search premises and inspect and remove copies of documents in
control of any person.
In the UK Article 18 of Regulation 1/2003, more specifically aids the
investigation by authorising the Commission’s request for inspections.
Undertakings, therefore, need to provide all necessary information or written
answers to the Commission’s questions.88 The Commission may do this by a
simple request or by decision.89 Further to Article 18, Article 20 prescribes
that the Commission has the authority to enter a premise if it ‘specifies the
subject matter and purpose of inspection’ before doing any necessary
investigations. 90 The Commission's right to enter premises is controversial but
beneficial for surprise inspections (dawn raids). In Article 21 (1) provides that
the Commission may enter private premises which includes homes of
directors, managers and other staff of an enterprise.
88 Article 18 (1); Imran Aslam, ‘EC Dawn Raids: A Human Rights Violation,’ (2008) 5:1 The Competition Law Review <file:///C:/Users/Owner/Downloads/SSRN-id1846426.pdf >accessed 1st October, 2016, 489 Aslam (n 128) 590 ibid
42
In the UK, Duke observes NCAs are allowed to enter private premises
examine and obtain copies of books, business records. 91These documents will
be sealed, and NCAs can further ask for explanations on the documents
detained via the inspection.92 Duke notes that wire and oral communications
interception this can be found in jurisdictions such as the United States and the
United Kingdom which can undertake surveillance of business premises or
individuals.93
It is, therefore, worrying that local legislations in the Caribbean do not specify
advance interception of wire or oral communications. Moreover, most times
cartel must be investigated in a very discreet manner, and as such the
Caribbean Community stand to benefit from surprise searches and seizures (as
seen in the United Kingdom through dawn raids of companies).
Moreover, clarity needs to be given (in investigation procedures in national
legislaions) as to documents/records that can be removed during an
investigation and whether it includes a computer. Additionally, it is submitted
that lack of a leniency policy may cause severe implications for the
Commission in detecting cartels due to the lack of incentives for a
whistleblower. According to Michal Gal within the region there is evidence of
export cartels stemming from the low costs of imported products; these low
cost imported goods are the result of an export cartel. 94Thus international
cartels are rapidly expanding and impair development for local market
91 Duke (n66) 29092 ibid93 ibid94 Michal Gal, ‘Regional Competition Law Agreements: An Important Step in Antitrust Enforcement’ (2010) 60 University of Toronto Law Journal 1 <https://www.law.utoronto.ca/documents/conferences2/Trebilcock09_Gal.pdf> Accessed 3rd May 2016, 5
43
players.95 Adequate enforcement of international cartels, therefore, demands
expansive investigation techniques.
For the Region limitations in searches caused them to retrieve limited
documentation, which may be insufficient in proving the existence of
anticompetitive conduct. Competition cases are proven from ample
documentary evidence such as emails and other correspondences, phone call
records among other evidences. Thus, investigations depend on the advance
capabilities of the Commission to retrieve such critical evidence. Otherwise,
an investigation will be at a ‘standstill’ and ‘go cold.'
For the parties, as a result of the investigation going ‘cold,’ a prevalent
anticompetitive conduct would continue to create havoc in a market to the
detriment of market players and consumers.
5.0.4 Implications in Rules of Procedures
According to Dabbah, one feature of competition law regimes of developing
countries is that they are deficient in procedural rules as it relates to
conducting investigations, holding oral hearings and keeping the relevant
parties informed of developments in investigations.96 Thus it is asserted that an
effective competition law regime is essential since parties subject to
proceedings as well as third parties, needs to be well aware of the procedural
practices of the commission which may be bringing a case against them.
However, the situation may become problematic for NCAs in the Caribbean
Community. As mentioned in the Caribbean Region, member states have
drafted RoP documents but have not formally adopted rules of enforcement
95 Gal (n 94) 596 Dabbah (n 4) 328-329
44
for the enforcement of anticompetitive agreement or abuse of a dominant
position; usually, they rely on the procedures and guidance that is provided for
in their legislations. In Guyana a notable case concerned Ogle International
Airport -v- Competition and Consumer Affairs Commission 97by which OAI
contended that throughout the ‘investigation process’ they were not given ‘a
right to a fair hearing’ as the Commission began its investigation into the
complaint made by Air Service Limited. The Chief Justice upheld that the
CCAC had the ability to request information, but acknowledge that parties
needed to be aware of the investigation procedure undertaken by the CCAC.
The Chief Justice, however, cautioned the CCAC about the importance of
enacting RoP in moving forward. It should be noted that Barbados, however,
does contain supplemental rules in its legislation for mergers/merger fees98 and
application for authorisations/ authorisation fees.99
Previously, it was mentioned that the in the Caribbean Community only the
CCC has official RoP for the investigation of a competition complaint. It can,
therefore, envision that one of the resulting implication for NCAs not having
official RoP is the Commission would be inclined to operate in an ad-hoc
manner without for example taking steps to ensure that an investigation and
investigative report occur within a particular time frame. Moreover, the
contents of a preliminary investigative report may have varying differences
from case to case. Within the region, one case that shows the implications of
not having RoP and the resulting mixing of roles is the Jamaica Stock
97 Unreported (2012) High Court of Judicature98 SI 2009 No. 104 Fair Trading Commission (Fair Competition Merger Fees) Regulation 2009 and SI 2009 No. 105 Fair Competition (Merger) Rules 2009.99 SI 2009 No. 114 Fair Competition (Application for Authorization) Rules 2009 and SI 2009 No. 115 Fair Trading Commission (Fair Competition Authorization Fees) Regulation, 2009
45
Exchange v the Fair Trading Commission. 100In this case, the FTC stated that
‘the Commission’ was responsible under Sections 21 (1) (b) and 33 (2) and (3)
of the Fair Competition Act to adjudicate on the matter before it. The
legislation, however, did not specify who in the Commission would be making
such a determination, that is to say, Commissioners or Secretariat. The case
held that the provisions violated the separation of power doctrine since an
executive body (Secretariat) was performing the functions of a judicial body in
contravention of Chapter VII of the Constitution. Thus it is submitted that if
the legislation had mentioned ‘Body of Commissioners’ instead of
‘Commission’ the case might have been differently decided.
Additionally, Parties subject to a complaint by the commission may be unclear
as to the manner in which the investigation is taken and the procedures the
Commission takes. Moreover, as we saw in the case of Ogle International
Airport in Guyana, there may be extreme ambiguity as to when the parties will
‘have a right to be heard.’
5.0.5 Implications of Judicial Review and Scrutiny
In the EU decisions of the European Commission are appealable. Article 263
of the TFEU allows parties to petition the European Court of Justice to review
whether or not the components of the Commission’s decision is legal on
grounds of an essential procedural infringements for example lack of
competence or misuse of power.101 Article 263 (4) TFEU states as follows:
“Any natural or legal person may, under the conditions laid down in
the first and second paragraphs, institute proceedings against an act 100 Jamaica Stock Exchange v Fair Trading Commission Court of Appeal: Supreme Court Civil Appeal No. 92/97 of 2001101 Article 263 of TFEU (ex Article 230 TEC)
46
addressed to that person, or which is of direct and individual concern
to them, and against a regulatory act which is of direct concern to
them and does not entail any implementing measures.”
Thus upon the receipt of an application to institute proceedings by a ‘legal
person’ the EU courts will commence its judicial review process. Accordingly,
the scope of jurisdiction of the EU Courts is said to be a restricted jurisdiction
over Commission decisions rather than unlimited jurisdictions since the EU
Courts only review the legality of the decisions and (if they are illegal) to
annul them, the EU courts do not re-examine the case on its merits. 102
An examination of the CARICOM institutional structure shows that the
Caribbean Court of Justice (CCJ), is the final Court of Appeal for the CCC, as
such by Article 175 (15) ‘determinations’ made by the CCC are reviewable.
Thus what exactly are ‘determinations’ made by the Commission may be
subject to the interpretation of the CCJ. In the 2012 decision of the Trinidad
Cement Limited v CARICOM Competition Commission,103 we see the CCJ
extending its jurisdiction to not only review the determinations of the CCC but
also the how the CCC conducted its investigations. The CCC challenged the
jurisdiction of the Caribbean Court of Justice to review how it initiated and
conducted its investigation since Article 175 (2) of the RTC gives the CCJ the
power to review the ‘determinations’ of the Commission. The CCJ held that
since RTC created the CCC the CCJ could review all of its actions. Further,
the word ‘determinations’ in Article 174 (4) of the RTC includes not only the
102 Damien Geradin, ‘Judicial Review in European Union Competition Law: A Quantitative and Qualitative Assessment,’ (2011) Discussion Paper <file:///C:/Users/Owner/Downloads/SSRN-id1698342.pdf> accessed 1st October, 2016, 21103 Trinidad Cement Limited v CARICOM Competition Commission: Original Jurisdiction CCJ Application No. OA 1 of 2012
47
substantial ‘determinations’ of the case but also ‘determinations’ at the
investigative and enquiry stage. Thus this case highlights the extending arm of
a reviewing court not specialised in competition policy, in considering the
merits of a competition commission’s decision.
Additionally, in the three jurisdictions that have been discussed in this paper,
we see a similar pattern of decisions of the National Competition
Commissions being subject to review by a Judge in Chambers. In Guyana
section 51(1) -(2) of the CFTA specifies that aggrieved enterprise must appeal
within 15 days from the date of a Commission’s decision to a Judge in
Chambers. That judge can thereafter decide to ‘confirm, modify or reverse’
the finding of the Commission and where it considers appropriate direct the
Commission to reconsider specified matters of the appeal. Similar provisions
include section 49 (1) -(2) of the Jamaica Fair Competition Act and section 36
(1) –(2) of the Fair Competition Act of Barbados. Thus the legislations in the
Caribbean Community do not specify what aspects of the decision the Judge in
Chambers ought to ‘review’ during the appeal.
The above situation following the case of TCL v CCC and the legislations in
the region is worrying since the National Competition Commission or a
specialised court ought to be entrusted with the enforcement of competition
law provisions. There are implications of matters heard in a General Court
such as decisional inaccuracies.
For the Commission, the first major consequence would be that the CCC’s
decisions will be easily overturned on the ‘merits’ by the CCJ or in the case of
NCAs decision by a Judge in Chambers in an Appellate Court.Within the EU
48
we have seen that decisions of the European Commission are overturned not
on its merits but on the legality of the decision for example whether the
fundamental rights of parties were disadvantaged or procedures were not
followed etc. Thus if a General Appellate Court were to review a decision on
its merits, it would entail a finding of whether or not a case falls within the
ambits of the TFEU or RTC, etc. Such a conclusion, it is submitted, should not
be the function of a general appellate judge executing judicial review of a
Commission's decision. Usually, an appellate judge is not a specialist in
competition law, who would be able to make pronouncements on competition
law provisions. Geradin asserts that gone are the days where competition cases
concern typical goods or industries. With the rise of information technologies,
the economy has become more complex which pose a challenge for
competition enforcers regarding expertise, monitoring, and procedural
efficiency.104
On the complaining party and the party subject to the complaint, the
shortcomings of the Commission from making decisional errors will cause
parties to lose confidence in the work of the commission. As Gerdain notes
there are two types of errors Type I and Type II, in a Type, I error consumers
will be deprived of benefits with the banning of a procompetitive activity. In a
Type II error, however, both competitors and consumers will suffer from the
conduct prohibited. At worse the victim of infringement may simply be forced
out of a market.105 Thus if a General Court in looking at the merits of a
competition case, fails to categories an anti- competitive conduct in its
104 Geradin (n 102) 10105 Geradin (n 102)11-12
49
respective category, then consumers in addition to the parties could also be
affected.
CHAPTER 5
Implications in the Engineering of NCAs for the Caribbean Community
50
6.0.Implications of Traditional and Prosecutorial Model
For countries, that follow the traditional or the prosecutorial model there are
several advantages and disadvantages to which the researcher would now
discuss.
Arlen Duke suggests that the positives of the traditional model include the fact
that this model benefits from lower administrative costs since they are not
required to commence a legal proceeding in court (also depends on the
safeguards built into the model).106 One concern of the traditional model is the
independence of the adjudication decisions since a single agency starts the
investigation and issues the administrative order.107
However, this model does not come without its perceived negatives, according
to Arlen Duke allegations of prosecutorial bias have been made against the
traditional model and DG Competition. However, challenges to the European
system that it violates the right to a fair hearing by an independent and
impartial tribunal has been unsuccessful.108Arlen Duke maintains that
combating the negatives of prosecutorial bias demands the provision of the
judicial review. Judicial review where the court is independent and impartial
would serve to put appropriate checks and balances on the decisions of the
Commission. Care should, however, be taken to ensure that the reviewing
court is not overly deferential to the agency findings, as seen recently in EU
courts.109
106 Duke (n 63) 277107 ibid108 ibid109 Duke (n 63) 278
51
On the prosecutorial model, the separation of investigative and adjudicative
functions is said to have a positive impact Duke suggest that ‘it affords due
process.’110 Moreover Duke asserts that the prosecutorial model while
benefiting from an independent adjudicator also suffers from timeliness and
costs associated with the process. The cons of the prosecutorial model are
greater in a General Court since the judiciary would not be specially trained in
competition law and so a specialist court is recommended.’111 Where the
specialist court allows for fewer formalities the Commission can benefit from
a better balance of administrative efficiency and due process.112
The disadvantages listed above of both models may serve as implications for
the Commission and parties subject to a complaint. Moreover, implications
faced by the European Commission in adopting the traditional model, also
transfers to Guyana and Barbados since their models closely resembles this
model (traditional).The UK follows the traditional model, and the major
question is whether or not it violates human rights. By Article 1/2003, the
Commission has the authority to investigate, prosecute and to impose
sanctions for offences under Article 101 and 102. Parties, therefore, rely on
the judicial review of the EU courts as a safeguard against decisions of the EU
Commission. Thus, a major question is whether EU enforcement structure is
in full compliance with the European Convention for the Protection of Human
Rights and Fundamental Freedoms 1950 (ECHR). The Convention specifies
that parties are entitled to a fair/public hearing being held within a reasonable
time by an ‘independent and impartial’ tribunal.113
110 ibid 279111 ibid 112 ibid 113 Article 6 of Convention Right to a Fair Trial
52
6.0.2 Human/ Finacial Implications
Other implications arises as a result of low wage of the human resource
complement at NCAs. Many NCAs lose their valuable human resources as a
result of salaies being linked to the public service. Then Chief Executive
Officer of the Barbados Fair Trading Commission, Michelle Goddard alluded
to several challenges facing the Barbados FTC at a United Council for Trade
and Development (UNCTAD) Seminar.114 Accordingly, persons responsible
for setting salaries of the Commission have little understanding of competition
law and therefore set salaries at the same level as other government institution
(public service scale). Thus the Commission faces constraints in offering an
appropriate compensation package to employees, who have high technical
expertise. Another prevalent issue is the availability of adequate training for
employees since competition law is not a course at the University of the West
Indies, the FTC has to seek international training continually.
The CCAC of Guyana suffers from the all of the challenges faced by the
Barbados FTC. At the CCAC, since its establishment has seen a high turnover
of staff attributable mainly to the fact that salaries for technical employees
were set at the levels according to the public service scale. Thus the CCAC
has a major problem in retaining its human resource complement since it
became fully functioning in 2011. Dabbah observes that lack of financial
resources whether human ( that is to say sufficient expertise) or financial is a
serious hurdle facing the enforcement efforts of many competition authorities
114 Michelle Goddard, ‘Challenges of Implementing Competition Regime in a Small Developing Country: Barbados,’ Regional Seminar for Latin America and Caribbean Countries, UNCTAD Report (Sao Paulo 23-25 April 2003) <http://unctad.org/en/docs/ditcclp20038section3_en.pdf> Accessed 3rd May 2016
53
in the developing world. 115 As a result of the financial challenges, salaries
would be low and unattractive to specialised professionals. Moreover the
competition agency without trained professional is toothless.116 The resulting
situation is that many agencies in developing countries are understaffed.
Effective enforcement, in this case, would require the necessary staff of
lawyers, economists, investigators and case handlers. Dabbah further notes
that as a result of a shortage of staff enforcement of international cartels, anti-
competitive transnational mergers and cross-border abuse of dominance is
extremely costly. 117Thus enforcement has a slim chance of taking place as a
result of the limited budget; this is a key feature in most competition
authorities in developing countries.118
If the Commission lacks the finances, it needs it will be at a standstill in
investigating complex competition cases that relate to for example
international cartels and employing trained specialised officials within the
Commission. Thus as a result of its failure to hire key specialists, investigating
a competition complaint may be filled with inaccuracies and lapses in the
interpretation of the law and inconsistencies. Thus, for the parties involved
again decisions made by the Commission may be ‘sloppy’ causing devastating
effects.
6.0.3 Implications in Structure, Composition of NCAs
As mentioned most NCAs are not agencies of a respective government
ministry and operations are not autonomous entirely. Additionally, we have
115 Dabbah (n 4) 317116 ibid117 ibid118 ibid 318
54
discussed that most agencies employ overworked high-ranking officials with
little time on their hands to give competition cases the attention it deserves.
This issues coupled with the in frequencies of competition meetings (as a
result of lack work in the commission not being constant) or the ‘doubling’ of
officials gives rise to several implications.
For the Commission, the biggest effect to the Commission not operating in an
independent manner is that the decisions of the Commission could be biased
or prejudiced. This effect is as a result of the influences of an agency’s
Minister for determinations of cases to be in a certain way. If this were to
prevail, then ultimately there would be lacked confidence in public or private
entities who may want to bring a complaint to the commission.
Moreover, the implications for the parties (as a result of the cases not getting
the attention it needs) is that the decisions made by NCAs will be ‘sloppy’ or
inaccurate. Again, companies would lose faith in the work of NCAs and view
NCAs as not being able to live up to its mandate of ensuring fair competition
in a market. This inevitably is also devastating to consumers who will be
subject to monopolistic prices for goods and services as a result of enterprises
not competing on the market.
All of the implications noted in Chapter 4 and 5 undermine the effectiveness
of a competition agency. NCAs depends on the support they receive from
business and consumers who should look up to NCAs as the defender of
competition rights. Thus NCA must aim to solve the shortcomings faced in
the gaps of competition policy rules in the legislation and the engineering of
NCAs.
55
CHAPTER 6:
56
7.0 Remedying the Gaps with Solutions from EU, Authors and other
Practices
The gaps in the enforcement of competition policy for the Caribbean
community are indeed a major problem with serious implications for the
Commission the parties involved and consumers. A mistaken antitrust decision
banning, for instance, a pro-competitive discount or rebates deprives
consumers of lower prices and creates a price umbrella which protects
inefficient competitors.119 Added to this Damien Geradain asserts that costs for
an antitrust error are serious due to the fact that modern competition law
provides for strict sanctions of an administrative or criminal nature. In a
growing number of jurisdictions, competition law infringements are punished
by severe fines.120 Moreover, Geradain notes that forbidding firms to trade
freely in the market, severely interferes with an individual's freedoms such as
for instance freedom of association.121
Thus we can see why it is important for NCAs to get it right by plugging any
gap that could cause implications to parties subject to a complaint or
themselves. Below would be several solutions wordy of consideration.
7.1 Market an Effective Brand
For an agency to market an effective brand it can do so through its human
resource talent and reputation. If a commission has the ability to retain a
selection of high quality administrative and professional staff in the long term,
it aids the Commission in developing an effective brand.122 The benefits of a
119 Geradin (n 93) 12120 ibid121 ibid122 William E Kovacic, ‘How Does Your Competition Agency Measure Up?’ (2011) 7:1 European Competition Journal
57
good brand goes beyond the public perception that the Commission is
competent and equip to do the work. A good brand allows the Commission to
benefit from favourable allocations in its legislative budget and ensures greater
compliance from companies with laws relating to competition enforcement.123
Overall if the leadership of competition agencies wants to ensure that its brand
is constantly strengthened, they need to pioneer their agency’s strategies for
the long term and concentrate on the agencies overall reputation. 124One
workable strategy is additionally to establish linkages with International
Competition Network (ICN). 125 Additionally, as discussed, the projection that
the NCA is autonomous and free from government influences in decision
making process increases confidence in the operation of the agency.
Moreover, real performance projects to the public that the Commission can
live up to its obligations under varying national legislations through its ability
to prosecute cases, implement secondary legislations and formulate
guidelines.126 As discussed most agencies lack clear RoP and therefore there
may be ambiguity as to the mixing of investigative and adjudicative roles
which results in prosecutorial bias. Guideline/RoP help solve this ambiguity.
Moreover, since most competition agencies prescribe to an additional
advocacy role, agencies ability to convene workshops and seminars, produce
sector studies and engage in other forms of public consultations is another
indicator. 127
<http://www.tandfonline.com/doi/pdf/10.5235/174410511795887589?needAccess=true> accessed 1st October, 2016, 28123 ibid124 ibid125 ibid126 ibid 32127 Kovacic ( n 110) 32
58
The performance of competition agencies can only improve if the capability of
staff continually grows; knowledge, therefore, is a valuable input. With the
implementation of superior techniques the agency’s performance is likely to
improve and cases will be better prosecuted by the Commission.128 Thus
agencies must be abreast with economic theory, legal analysis, empirical work
and other notable trends129 This, however, can only be done through ongoing
investments for training at home or abroad. Agencies also stand to benefit
from training from multinational networks such as the Organisation for
Economic Cooperation and Development (OECD), the Competition Branch of
the United Nations Conference on Trade and Development (UNCTAD) and
ICN.130
Another factor that signals the effectiveness of a competition agency is its
ability to make information available to the public and disclose necessary
information as it develops. 131 For the work of competition agency to be
assessed and become transparent, the mechanism should be implemented for
them to release information. Kovacic discloses that this can be two-fold either
though disclosures on the commission’s website to annual reports, speeches,
databases coupled with information of what the Commission is currently
doing. 132Another mechanism for disclosure is through public consultations
with academics, law firms, economic consultancies or other groups which
know competition best.133 These groups can be engaged either through
questionnaires or individual hearings etc.
128 ibid129 ibid130 ibid131 ibid 40132 ibid 40133 Kovacic ( n 110) 40
59
Develop Cooperation/ Joint Enforcement and Advocacy Agreements
Authors Michal Gal and Taimoon Stewart both have identified solutions for
the region. Michal Gal states that in considering the shortcomings of
developing countries one solution could be an overarching Regional
Competition Law Agreement on Joint Enforcement and Advocacy Agreement
(RJCAS).134 RJCAS she claims has the potential to tackle the constraints in
enforcements relating to resources, capability, capacity and education,
compatibility and certainty.135
Taimoon Stewart on the other hands proposes that cooperation agreements.
She alludes to the fact that cooperation agreements can encourage deep
participation by all member states in the investigation of competition cases
since there is mutual assistance, exchange of confidential/ non-confidential
information by national legislation, consultations, positive comities and the
opportunity for notification of enforcement activities among member states.136
Moreover, a cooperative relationship with the USA, Europe and Canada and
other developed countries may prove to be essential since these countries
frequently initiate cartels.137
On the solution for the RJCAS and Cooperation Agreements, however, one
envisaged disadvantage is its limitation on member states’ sovereignty to
decide competition law cases on their shores since it is a consolidated effort in
jointly enforcing a competition matter.138 Additionally, Kovacic asserts that
134 Gal (n 85) 5135 ibid 136 Phillippe Brusick etal., ‘Competition Provisions in Regional Trade Agreements: How to assure Development Gains’ Chapter by Taimoon Stewart, ‘Special Cooperation provisions in Competition Law and Policy: The case of the Small Economies, UNCTAD Report (Geneva, 2005) 339137 Stewart ( n 2) 2138 Gal (n 88) 17
60
tension is a likely result if two or more competition agencies operate on the
same matter in same public domain since both agencies may want to compete
against each other in gaining supremacy. Further national competition policy
of an agency may suffer as no single agency will be empowered to determine
when litigations would commence.139 Thus both solutions are workable, but
member states need to consider the perceived disadvantages that could arise
before implementing such agreements. If member states determine that it is
workable and would like to retain jurisdiction over cases then it may be best
suited for him to specify enforcement only in cases that are of interest to all
countries such as those involving international cartels and keeping out other
cases from the agreement.140
7.2 Adopt Procedures from the EU (Previously mentioned)
The Caribbean does seek to benefit from the adaptation of some of the
practices followed by the EU, but given the differences in culture and
economy between the Caribbean and the EU, it is debatable what regulations
are in fact needed. Moreover, the case of TCL v CCC (previously discussed)
first acknowledged that courts needs to be cautious when making reference to
the EU. According to the CCJ care must be taken owing to the variance in
procedures and the dissimilarities in the legal instruments and overarching
principles of law, such as for example, difference in wording and nature.141 In
the areas of detection and investigation and judicial review, however, it is
worthwhile to consider the practices of the EU.
7.3 Detection and Investigation
139 Kovacic (n 110 ) 532 140 Gal (n 88) 17141 TCL v CCC para 27
61
During the conduct of investigations, several regulations of the EU (previously
mentioned) it is submitted can be transferred to the Caribbean Community.
These include for instance the provision of advance interception of wire and
oral communications and extension of places subject to be investigated in
legislations and scope for surprise inspections within the Region. As
mentioned cartel investigations demand expansive investigation techniques to
uncover documentary evidence needed to prove a case.
Along with other investigations tools, the Commission’s leniency policy is
another important tool in fighting cartels. Leniency policies offer companies
involved in cartels which self-report and hand over evidence either a reduction
in fines or total immunity.142 Total immunity is awarded if the enterprise
informs the Commission of an undetected cartel through sufficient information
that it can use to launch an inspection of premises named in the cartel.143
7.4 Judicial Review Scope
As mentioned the scope of jurisdiction of the EU Courts is said to be a
restricted jurisdiction over Commission decisions rather than unlimited
jurisdictions since the EU Courts only review the legality of the decisions and
if they are illegal to annul them, the EU courts do not re-examine the case on
its merits. 144The Commission enforces competition law provisions contained
in the TFEU and EU legislation, while the EU Courts task is only to review
the legality of the Commission’s decision enforcing EU competition law.145
Thus ‘EU Courts are not entitled- as in a classic appeal procedure- to
142 ec.europa.eu/competition/cartels/leniency/leniency.html143 ibid144 Geradin (n 93) 21145 ibid
62
substitute their point of view for that of the Commission and adopt a ‘denovo’
decision. When an EU Court finds a decision illegal, they must strike it down
(in full or in part).146 Thus the Caribbean Community can choose to take this
approach of prescribing limits of the powers of the CCJ.
7.5 Consolidated RoP
According to Damien Geradin real performance projects to the public that the
Commission can live up to its obligations under the RTC and varying national
legislations comes through its ability to prosecute cases, implement secondary
legislations and formulate guidelines. 147 As discussed most agencies lack clear
RoP and as such the procedures of NCAs are ambiguous. Parties to a
complaint may be unclear as to the Commission’s procedures, and as a result
of the traditional model followed by NCAs unsure whether there are mixing of
investigative and adjudicative roles which results in prosecutorial bias.
Thus another workable solution that can be considered is for a regional effort
of Consolidated Guidelines for RoP to be implemented by NCAs. This option
is proposed since each jurisdiction within the region would benefit from
guidelines in implementing RoP as it relates to handling of complaints,
investigation, hearing and determinations. For this proposal to work the onus
should be on the CCC to compile guideline of RoP that member states can
consider adopting. Previously we noted that the CCC was able to formalise its
RoP in 2011, which does offer guidance from a cross-border standpoint with
the procedures to be followed by the CCC. However, mentioned so far no
member states has comprehensive formally adopted rules regarding the
146 ibid147 Kovacic (109) 32
63
functioning of the commission as it investigates anti-competitive abuses such
anticompetitive agreements and abuse of dominance. Member States,
therefore, seek to benefit from Guidelines for Consolidated Rules since it
serves as a model template that they can use in moving forward. Previously
we noted that the CCC was able to formalise its RoP in 2011, which does offer
guidance from a cross-border standpoint (with the procedures to be followed
by the CC) but not a national standpoint.
CONCLUSION
In summary, one can say that the Caribbean Community faces gaps in its
enforcement system for competition policy. These deficiencies can be
categorised under two main headings namely gaps in the RTC and local
legislations and shortcomings in the engineering of NCAs. In the transfer of
64
law, we have discussed the limits in the wording of the RTC and other
national legislations, shortening of offences, lack of RoP and format of
investigations and judicial review. Whilest in the engineering of the NCAs,
issues flowing from composition and structure, the model adopted by the three
jurisdictions were additionally considered.
Ultimately NCAs, the parties subject to a complaint and consumers are
affected by the presence of shortcomings in the enforcement of competition
policy. NCAs must, therefore, seek solutions that would plug the gap which
includes marketing an effective brand by restructuring its image and ensuring
autonomy and no mixing of investigative and adjudicative roles following the
adoption of the traditional model of enforcement ( especially Guyana and
Barbados). Moreover, an overall revamp in setting wages to the public service
may result in the retention of its human resource complement that would also
aid in the marketing of an effective brand. Additionally in combating other
shortcomings member states can consider joint agreements on enforcement or
cooperation agreements with other NCAs within the Region. Moreover, other
solutions to consider include the CCC adoption of Consolidated Guidelines on
RoP for national enforcement and adopting ‘with caution’ certain procedures
from the EU relating to investigation and judicial review of cases.
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65
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APPENDIX 1: Map of CARICOM Countries
70
Downloaded from Heritage Foundation at <http://www.heritage.org/multimedia/infographic/2012/10/caricom-map> accessed 23rd September, 2016
71