Fair Trading Commission

Overview of Competition Law

The Experience of Barbados

Competition law and Policy Training Workshop

March 30-31, 2011The Savannah Hotel

Law that promotes and maintains market competition by regulating anti-competitive conduct.

Adam Smith: Monopoly - "...great enemy to good management Competition - medium for "...new divisions of labour, and new improvements of art”

Competition Law or Antitrust Law

• Competition is not an end in itself but a process that advances goals of economic well being, ultimately for consumers

Competition law or Antitrust law (Three main elements)

Prohibits agreements/practices that restrict competition between business - price fixing cartels

Prohibits abusive behavior by a dominant firm, - predatory pricing, excessive pricing, refusal to supply

Reviews mergers and acquisitions and joint ventures of large corporations:

•Prohibit potentially anti-competitive mergers•Prescribe remedies to protect competition

History of Competition Law

1890 — Sherman Antitrust Act (United States)

Prohibits agreements in restraint of trade and monopolization

1914 — Clayton Antitrust Act (United States) Prohibits specific types of conduct and mergers that may lessen

competition

1957 — (Article 81 and 82) Treaty of Rome established (European Economic Community) Promoting economic integration to promote free trade

1976 — Hart-Scott-Rodino Antitrust Improvement Act (United States) investigate mergers

1980 —Policies to tackle restrictive practices (UNCTAD)

Growth of Competition Law World wide(2010 - over 90 countries, 110 Authorities)

1900 - Influence of monopolies United States

1960 - Economic integration, free trade

1980 - Economic efficiency, Privatization

2008 - Transition from state control, Eastern Europe, also Latin America/Barbados

Fair Trading Commission Barbados

Requirement of Ch. 8 –Treaty of

Chaguaramas

Public Consultation

Fair Trading Commission - Established

20011. Utilities Regulation Act 2001 - To

Ensure Efficient Utility Services 2. Fair Competition Act 2003 - To

Promote and Maintain Competition3. Consumer Protection Act 2003 - To

Protect Consumer Rights

Fair Competition act (Scope of Coverage)

Similar to Treaty of Chaguaramas / EC Article 81 and 82

• EC Anti-Competitive Agreements (Horizontal/Vertical)

• Abuse of Dominance • Interlocking Directorates • Includes Merger Control Provisions• Provides for Authorisations• Includes all domestic markets• Includes Statutory Corporations

Initial Challenges Faced by Commission

Reaction of Business Community○ Over regulation, ○ Lacking the necessary expertise, ○ Restricted ability to expand/compete

internationally Lack of Competition Culture and

infrastructure Inexperienced Staff Inexperienced Judiciary/Legal/Technical Inadequacy of legislation/administrative

procedures Limited financial resources

Initial Approach Adopted

Informal Grace Period

Took on selected matters

Sought technical Assistance

Inform and educate public Special Stakeholder Seminars (business/Consumers

etc.) Guidelines, Articles in press, Fliers Website Radio and TV

Subsequent Approach Adopted (to Develop Competition Culture)

Enforcement/Education

Expanded Education Programme

Internal Research studies

Expand Range of Investigations

Own Initiative Sector Investigations

Specific Training Programmes

Build Alliances - Business/Public Sector

Develop International Linkages

Industries Investigations

Type of Investigation

s Industry No.

Abuse of Dominance

• Telecommunications• Construction• Oil Industry

Anti Competitive Agreements

• Professional Services• Shipping • Commercial Banking

Merger• Telecommunications• Distribution

Performance To Date

Merger Investigations 1

Merger Guidance 5

Authorisation Investigations 0

Authorisation Guidance 1

INVESTIGATIONS /Guidance Total

Abuse of Dominance Investigations

Agreements Investigations

Anti Competitive Conduct Guidance

Future Work Focus

1. Refine legislative framework2. Inform and Educate businesses 3. Improve investigative procedures4. Increase training of staff 5. Ensure Government Policy conforms

with Competition6. Improve Knowledge of Judiciary7. Provide Technical Assistance

Regionally

Fair Trading Commission

Overview of Competition LawThe Experience of Barbados

Competition law and Policy Training Workshop

March 30-31, 2011The Savannah Hotel