Competition Law in the CARICOM Single Market and Economy

Alina Kaczorowska-Ireland

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317654995
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

Competition Law in the CARICOM Single Market and Economy provides a comprehensive introduction to and overview of this emerging area of law, discussing both the current context and potential directions for future development. The book provides an account of major topics in the law, including the economics of competition law; enterprise; enforcement; regulation; and obligations of member states. It traces the progression of the law from the 2006 Revised Treaty of Chaguaramas, charting the main developments such as the establishment of CARICOM Competition Commission (CCC), and examining the emerging case law in this important and fast-growing area.

Offering the first major exploration of Caribbean Competition law, this text will be an essential resource for lawyers, businesspersons, and students of the law in the Caribbean.

1

INTRODUCTION

Chapter contents

1.1	Introduction
1.2	Should CSME competition law benefit from the experience of the United States, the European Union and other jurisdictions in the enforcement of competition law?
1.3	The structure of this book

1.1 Introduction

In 1973, four Caribbean States – Trinidad and Tobago, Barbados, Jamaica, and Guyana – entered into a Treaty Establishing the Caribbean Community and Common Market (CARICOM) at Chaguaramas. Eleven further Caribbean States subsequently became Contracting Parties to that Treaty.¹ The 1973 Treaty of Chaguaramas provided for the free movement of the factors of production and for the co-ordination of many policies. It has been described by Professor Duke Pollard as ‘little more than an optical illusion in terms of positive enforceable rights and legally binding obligations’.² Revision was necessary in order to deepen regional economic integration and to respond to the challenges of globalisation. This need was acknowledged by the Heads of Government of the Member States of the CARICOM in 1989 at a Conference held in Grand Anse, which decided to establish the CARICOM Single Market and Economy (CSME). As a result, the 1973 Treaty of Chaguaramas was, 16 years later, replaced by the Revised Treaty of Chaguaramas Establishing the Caribbean Community including the CARICOM Single Market and Economy (RTC). It entered into force on 1 January 2006.³

One of the vital elements of the RTC is its inclusion, under Chapter VIII, Part One, of competition policy and law as areas of CARICOM competence. Chapter VIII also provides for the establishment of a system for enforcement of competition law. This system comprises the CARICOM Competition Commission (CCC), which was inaugurated on 18 January 2008, the Caribbean Court of Justice (CCJ), which was established on 16 April 2005, and national competition authorities (NCAs) (see Chapter 8, section 8.2.1.3). A further organ of CARICOM, the Council for Trade and Economic Development (COTED), which consists of ministers designated by the Member States, is empowered to establish appropriate policies and rules of competition, including special rules for particular sectors,⁴ as well as to exempt any sector of the economy or any enterprise or group of enterprises from the application of competition rules.⁵ The enforcement system is in the process of construction. Nevertheless, the CCC conducted its first investigation, and the CCJ rendered its first judgment in competition matters, in the Trinidad Cement Ltd v CCC case.⁶ This indicates that CSME competition law will grow in parallel with the development of the CSME.

CSME competition law is concerned with:

•agreements between enterprises, decisions of associations of enterprises and concerted practices by enterprises that have as their object or effect the restriction of competition within the Community. These being prohibited (subject to some exceptions);

•abusive business conduct by enterprises that are in a dominant position within the Community (although a dominant enterprise may justify such conduct on the grounds specified in the RTC);

•any other like conduct by enterprises, the object or effect of which is to frustrate the benefits expected from the establishment of the CSME, unless that conduct falls within justifications set out in the RTC; and

•public restrictions on competition, which occur when a Member State takes measures that restrict competition within the Community, which measures are prohibited.

It is important to note that, at the current stage of development of CSME competition law, mergers between enterprises are not within the scope of the Community rules on competition. Although most mergers have pro-competitive effects, some may be harmful to competition, given that they reduce the number of competitors in the relevant market and thus increase merging enterprises’ market power, and, at the extreme, can create a monopoly, thereby increasing the potential for abuse of that power. For that reason, Member States have already agreed that control of mergers should become part of CSME competition law⁷ (see Chapter 3, section 3.2.2 and Chapter 9, section 5).

1.2 Should CSME competition law benefit from the experience of the United States, the European Union and other jurisdictions in the enforcement of competition law?

CSME competition law is a new area of law in the Caribbean Community. The novelty raises the matter of whether, in the enforcement of CSME competition law, the CCC, and ultimately the CCJ, should take account of the vast experience of other jurisdictions relating to the enforcement of competition law. It can be said that economic principles are the same everywhere and this may be a reason for paying attention to competition cases from other jurisdictions. However, this submission cannot be accepted. Although economic principles are the same, in each jurisdiction, competition law – and the way in which it is enforced – depends on the objectives that the competition law of that jurisdiction seeks to achieve. Therefore the underpinning philosophy of each regime of competition law is the vital factor in deciding whether and to what extent competition cases from elsewhere will be relevant to the enforcement of CSME competition law.

It is submitted that whilst it is always instructive and enriching to pay attention to competition cases from other jurisdictions, the similarity in the underpinning philosophy of CARICOM and the European Union, as well as the textual similarity between substantive provisions on competition set out in Articles 177–179 RTC and Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), entails that, in many instances, concepts and theories established under EU competition law may be transferred to CSME competition law. In any event, bearing in mind the similarities, substantive EU competition law may, at the very least, provide many valuable ideas for the interpretation of CSME competition law. Before underlining the similarities, it is necessary to stress that there are also important differences between CSME competition law and EU competition law – in particular, the enforcement regimes are very different procedurally.

With regard to similarities between the underpinning philosophies of CARICOM and the European Union, both are founded on the same values and both seek to achieve similar objectives, although integration in each region has reached differing stages of development. The values on which the Union is founded are similar to, if not the same as, the values on which CARICOM is based. Article 2 of the Treaty on European Union (TEU) lists those values:

“The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.”

In CARICOM, the 1997 Charter of Civil Society for the Caribbean Community, although not a binding instrument, contains provisions that fully acknowledge the same values as those specified in Article 2 TEU as being fundamental to Caribbean society.

With regard to the objectives that each organisation strives to achieve, both are committed to the creation and maintenance of an internal market and single economy, the functioning of which must not be frustrated by anti-competitive conduct of enterprises, or restrictions imposed by Member States.

Textual similarity between the substantive provisions of Chapter VIII, Part One, RTC and Articles 101 and 102 TFEU strongly suggests that many RTC provisions are modelled on the TFEU provisions. Table 1.1 exemplifies this in relation to the prohibition of anti-competitive agreements, decisions and concerted practices.

TABLE 1.1 Textual similarity between Article 177 RTC and Article 101 TFEU

Prohibitions under the RTC	Prohibitions under Article 101 TFEU
Article 177(1) RTC states: A Member State shall, within its jurisdiction, prohibits as being anti-competitive business conduct, the following: (a)agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises which have as their object or effect the prevention, restriction or distortion of competition within the Community.	Article 101(1) TFEU states: The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings, and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market.
Article 177(2) RTC gives examples of prohibited agreements, decisions and concerted practices	Article 101(1) TFEU gives examples of prohibited agreements, decisions and concerted practices
Article 177(3) states: Subject to Article 168, a Member State shall ensure that all agreements and decisions within the meaning of paragraph 1 of this Article shall be null and void within its jurisdiction.	Article 101(2) TFEU states: Any agreements or decisions prohibited ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• List of abbreviations
• Table of cases
• Table of treaties and legislation
• 1 Introduction
• 2 The economics of competition law
• 3 The objectives of CSME competition policy and law
• 4 The concept of ‘enterprise’
• 5 The concept of ‘cross- border effect’
• 6 Agreements, decisions and concerted practices prohibited under CSME competition law
• 7 The prohibition of abuses of a dominant position
• 8 The obligations of Member States under CSME competition law
• 9 The enforcement of CSME competition law by the CARICOM Competition Commission
• Index