Competitive Markets Are Critical – FTC

The Fair Trading Commission (FTC) continues to facilitate and advocate for more competitive sectors, with the view that competitive markets are critical to efficiency, innovation, investment, and economic growth.

At a recent JIS ‘Think Tank’, Executive Director of the FTC, David Miller, pointed out that consumers benefit from competition by obtaining more product choices, higher quality products, faster rates of product innovation, and more affordable prices.

As such, the entity has undertaken two important market studies to examine the regulatory framework governing Credit Bureau services and the Digital Hyperscalers market.

Competition Bureau Chief at the FTC, Dr. Kevin Harriott, who was also present at the ‘Think Tank’, informed that the entity embarked on the Credit Bureau Services study because “it has been recognised globally that access to loan facilities is an important part of social mobility”.

Loan markets, he said, allow consumers to afford goods and services that they would not have been able to afford otherwise.

“To the extent that the FTC’s mandate is to safeguard the welfare of consumers, we deem that this study on the loan markets is important, as improving access will lead to the improved social well-being of consumers,” Dr. Harriott added.

Citing a 2021 report by the Bank of Jamaica, which revealed that $52 billion in personal loans have been extended to financial institutions, he said that an important aspect of maintaining the viability of loan markets is the ability of lenders to accurately assess the credit worthiness of consumers.

“Throughout the years, lending institutions internally developed ways to assess credit worthiness until the passing of the Credit Bureau Act in 2021, which allows for a more accurate measurement of the credit worthiness of consumers,” Dr. Harriott noted.

The other study that the FTC will be embarking on is Digital Hyperscalers, which are technology platforms that can, on demand, significantly increase the scale and scope of operations without any noticeable deterioration in user experience. The most popular hyperscalers include Google, Amazon, Microsoft, and Facebook.

Dr. Harriott pointed out that the FTC will examine regulatory imbalances between Hyperscalers and local advertising/media houses through the study.

“A study of hyperscalers is important because they have become increasingly relevant to Jamaican consumers. It is unlikely that any consumer could spend an entire day without interacting with the products and services offered by hyperscalers,” he said.

Dr. Harriott argued that “it is also true that hyperscalers have disrupted the operations of goods and services provided through traditional business models. One of the important issues that will be examined through the study is the effect of digital hyperscalers on the communications market”.

A report summarising the main results of both studies will be disseminated to the public for further discussion.