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Fair Trading Commission Overview of Competition Law The Experience of Barbados Competition law and Policy Training Workshop March 30-31, 2011 The Savannah Hotel. Competition Law or Antitrust Law.
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Fair Trading Commission Overview of Competition Law The Experience of Barbados Competition law and Policy Training Workshop March 30-31, 2011 The Savannah Hotel
Competition Law or Antitrust Law • 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 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 2001 • Utilities Regulation Act 2001 - To Ensure Efficient Utility Services • Fair Competition Act 2003 - To Promote and Maintain Competition • 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
Future Work Focus • Refine legislative framework • Inform and Educate businesses • Improve investigative procedures • Increase training of staff • Ensure Government Policy conforms with Competition • Improve Knowledge of Judiciary • Provide Technical Assistance Regionally
Fair Trading Commission Overview of Competition Law The Experience of Barbados Competition law and Policy Training Workshop March 30-31, 2011 The Savannah Hotel