Dr. Taimoon Stew­art

Some mem­bers of the pri­vate sec­tor and gov­ern­ment are call­ing for the Fair Trad­ing Com­mis­sion (FTC) to use its pow­ers to en­force the law against abuse of mo­nop­oly pow­er. (I ex­plained else­where that it can­not act against mo­nop­oly pow­er since that is not il­le­gal). It would be good to ex­plain what pow­ers are con­ferred on the FTC by the Fair Trad­ing Act (FTA).

When any com­pe­ti­tion com­mis­sion world­wide con­sid­ers ini­ti­at­ing an in­ves­ti­ga­tion, the first thing they do is gath­er in­for­ma­tion. The Com­mis­sion must first as­cer­tain whether there is mer­it in open­ing an in­ves­ti­ga­tion, whether on its own ini­tia­tive or be­cause it re­ceived a com­plaint. This in­volves gath­er­ing as much in­for­ma­tion as is avail­able pub­licly and if a com­plaint is made by a mem­ber of the pri­vate sec­tor or the pub­lic, the Com­mis­sion re­quests sub­mis­sion of in­for­ma­tion from the com­plainants. The FTC has dis­cre­tionary pow­er to de­cide whether to un­der­take an in­ves­ti­ga­tion.

What pro­ce­dure must the FTC fol­low.

The Com­mis­sion has far-reach­ing pow­ers to gath­er in­for­ma­tion from firms. Sec­tion 7(2) re­quires the Com­mis­sion to serve on all rel­e­vant par­ties writ­ten no­tice of its in­ten­tion to ini­ti­ate an in­ves­ti­ga­tion and sec­tion 8 (1) em­pow­ers the Com­mis­sion to (a) re­quire the pro­duc­tion of doc­u­ments for ex­am­i­na­tion; (b) re­quire any doc­u­ment to be sub­mit­ted to the Com­mis­sion to be ver­i­fied by af­fi­davit; and (c ) sum­mon and ex­am­ine wit­ness­es on oath.

The Com­mis­sion may ap­ply to the Court for is­suance of a sum­mons for at­ten­dance of the wit­ness, and for the pro­duc­tion of any doc­u­ment, book or re­lat­ed mat­ter (sec­tion 8.2). Sec­tion 9(1) al­lows the Com­mis­sion to ap­ply to the Court for a war­rant to en­ter and search any premis­es or in­spect and re­move for the pur­pos­es of mak­ing copies, any doc­u­ments or take ex­tracts there­of. Doc­u­ments are to be re­turned with­in four­teen (14) days.

Here is the in­ter­est­ing part for the pri­vate sec­tor to un­der­stand. Sec­tion 9.4 of the FTA gives the Com­mis­sion the pow­er to re­fer to the Court for sum­ma­ry con­vic­tion and ap­ply a fine of $10,000 and im­pris­on­ment for two years if a per­son ob­structs or im­pedes an au­tho­rised of­fi­cer in the per­for­mance of his du­ties.

If the per­son at­tends a sit­ting of the Com­mis­sion and leaves with­out per­mis­sion, will­ful­ly in­sults any Com­mis­sion­er or of­fi­cer, or in­ter­rupts the pro­ceed­ings, fails to give ev­i­dence, or makes a com­plaint that is friv­o­lous, vex­a­tious, or ma­li­cious, the fine up­on sum­ma­ry con­vic­tion is $10,000. By com­par­i­son, the Bar­ba­dos Fair Com­pe­ti­tion Act (BF­CA) ap­plies a fine of B$40,000.00, (ap­prox­i­mate­ly TT$135,000) com­pared to TT$10,000 in the FTA. It is my hope that this fine is sub­stan­tial­ly in­creased when the FTA is re­vised since $10,000 is pet­ty cash for most firms.

If a record is al­tered or de­stroyed, the per­son could on sum­ma­ry con­vic­tion be fined $10,000 and im­pris­on­ment for two years (sec­tion 11). The BF­CA ap­plies a fine of B$150,000 (US$75,000) or to im­pris­on­ment for a term of 2 years or both.

Fi­nal­ly, a per­son who in any man­ner im­pedes, pre­vents or ob­structs any in­ves­ti­ga­tion by the Com­mis­sion un­der the Act, is li­able on sum­ma­ry con­vic­tion to a fine of $5,000 and to im­pris­on­ment for two years. The BF­CA ap­plies a fine of B$40,000 (TT$135,000) or to im­pris­on­ment for a term of six months or both. Note that sec­tion 44 (2) Where an en­ter­prise con­tra­venes any of the pro­vi­sions of this Act, the Court may im­pose a fine not ex­ceed­ing ten per cent of the an­nu­al turnover of the en­ter­prise con­cerned.

To this point, the FTC has not con­duct­ed an an­titrust in­ves­ti­ga­tion (that is, an­ti­com­pet­i­tive agree­ment in­clud­ing car­tels or abuse of dom­i­nance). It has re­viewed sev­er­al merg­ers, which is not an easy task since merg­er re­views are com­plex and re­quire suf­fi­cient staff. I have point­ed out else­where how bad­ly un­der­staffed and un­der­fund­ed is the FTC.

One may ques­tion why, in the last five years (re­mem­ber, the FTA was ful­ly pro­claimed in Feb­ru­ary 2020 just be­fore the COVID shut down) the FTC has not un­der­tak­en a case. The first and ob­vi­ous rea­son is that it does not have the re­sources to do so. More­over, if it were to un­der­take a case of abuse of dom­i­nance against one of the pow­er­ful con­glom­er­ates in T&T, it would be up against firms that will have the re­sources to hire the best con­sul­tants avail­able, most like­ly, for­eign con­sul­tants, since per­sons with the nec­es­sary knowl­edge in com­pe­ti­tion law are scarce lo­cal­ly.

Once a Board is ap­point­ed, and the bud­get of the FTC is in­creased to an ad­e­quate amount, it is hoped that they would be more ag­gres­sive and un­der­take cas­es. One strat­e­gy that has been adopt­ed by com­pe­ti­tion com­mis­sions in oth­er de­vel­op­ing ju­ris­dic­tions, such as South Africa and oth­er African coun­tries, is to have a tech­ni­cal ex­pert from a ma­ture ju­ris­dic­tion brought in for a six-month pe­ri­od or a year to ad­vise and guide the staff of the FTC in its ear­ly years. How­ev­er, the like­li­hood of an ex­pert be­ing will­ing to re­lo­cate to Trinidad for an ex­tend­ed pe­ri­od is not great.

An­oth­er prob­lem that the FTC faces, and this ap­plies to all our small so­ci­eties in the Caribbean, is that the large firms in the busi­ness sec­tor are an elite group. Many are de­scen­dants of the col­o­niz­ers (this does not ap­ply to the Syr­i­an-Lebanese pop­u­la­tion). They are a clique that work and play to­geth­er, mar­ry each oth­er, so­cial­ize with each oth­er, and large­ly set them­selves apart from the rest of the pop­u­la­tion.

Get­ting ev­i­dence against car­tels is very dif­fi­cult. In ma­ture ju­ris­dic­tions, the com­mis­sions re­ly on whistle­blow­ers to come in and con­fess to be­ing a part of a car­tel in re­turn for im­mu­ni­ty. They would do this be­cause they are afraid of the De­part­ment of Jus­tice An­titrust Di­vi­sion in the US, or the EU Com­mis­sion, DG Com­pe­ti­tion. These are pow­er­ful com­mis­sions with a very sound track record of en­force­ment. Whistle­blow­ers are there­fore pre-empt­ing dis­cov­ery of the car­tel by be­ing the first to go to the com­mis­sion and re­veal the ex­is­tence of the car­tel and con­fess to its par­tic­i­pa­tion in re­turn for which it is not pros­e­cut­ed. On­ly the first to come for­ward gets im­mu­ni­ty from pros­e­cu­tion. How­ev­er, the leader of the car­tel does not get im­mu­ni­ty.

What are the chances of one of our busi­nessper­sons in T&T from the elite busi­ness sec­tor whistle­blow­ing on an­oth­er elite busi­nessper­son. Nil. They would have no in­cen­tive to do so. First they must fear the pow­er of the FTC. At this point, the FTC is still try­ing to find its feet and there is no fear of the FTC. Sec­ond­ly, they would not tell on each oth­er be­cause of their close ties. Third­ly, if some­one does whis­tle blow, they would be os­tracised from the so­cial group. To this point, the Ja­maica Fair Trad­ing Com­mis­sion has not in­ves­ti­gat­ed a car­tel case in its 32 years of en­force­ment be­cause it is very dif­fi­cult to get the ev­i­dence.

All this is to say that the FTC faces many prob­lems, but this is not un­usu­al in a young com­pe­ti­tion com­mis­sion. It is, in fact, the norm. What we need to do is have the gov­ern­ment fund the FTC suf­fi­cient­ly to al­low it to hire ad­e­quate staff, pro­vide ded­i­cat­ed ac­com­mo­da­tion for the Com­mis­sion, and stop treat­ing it as an af­ter­thought un­til you need it to take on a case, and ad­mon­ish it for not do­ing so with­out recog­ni­tion of the con­straints it faces. Once em­pow­ered, the FTC needs to step up and en­force the law. And, the law needs to be re­vised, so hope­ful­ly this will al­so hap­pen in short time.