FTC Continues its Focus on Competition Advocacy

The Fair Trading Commission (FTC) continues its focus on competition advocacy as part of efforts to maintain competition within the local marketplace.Executive Director of the FTC, Barbara Lee tells JIS News that effort is to raise awareness about the benefits of competition and to ensure that people do not run afoul of the competition laws that have been established in Jamaica.
She says that government procurement bodies are being targeted and procurement officers have been sensitized “to assist them to do what they do so that it is consonant with what competition is all about.”
“They take bids, they make offers and invite invitation for bids. They need to be able to know whether the bids are being produced in a competitive manner or are persons undermining the system by rigging those bids and all of that,” she says.
One aspect of competition advocacy is assisting in the development and promotion of standards. An example of the FTC’s work in this area relates to the case where a developer promised to provide a gated community as part of a housing development, but this was not fulfilled.
After various complaints from purchasers, the FTC went about looking into the issue but found that there was no definition of what a gated community is, whether here or abroad. “So we took up the challenge of getting some standards in place, as we cannot say there is an anti-competitive activity and there is a breach of anything if no benchmark exists,” Mrs. Lee points out.
“We approached the Kingston and St. Andrew Corporation and some of the local councils and arising out of the meetings, we were able to establish some standards to make for Jamaica, a definition of what a gated community is, so that persons can compete fairly,” she informs.
“Developers, if they claim to be providing a gated community, there is some standard to which they can look to and which consumers can hold them. That is another way we do our competition advocacy,” the Executive Director points out.
Dr. Kevin Harriot, Competition Bureau Chief at the FTC, informs that the agency is also looking at the issue of misleading advertisement within the local market.
He explains that when the agency reviews allegations of misleading advertisement, its interest is whether and to what extent, the advertisements are injurious to competition.
He gives the example of two stores with merchants selling similar home entertainment systems that they have advertised in the newspapers. “In one instance, you see an advertisement in which you have the home entertainment system with two speaker boxes and it says $15,000 and in the second advertisement, you see the same system, but instead of two boxes you see four boxes, and that merchant is selling it for $15,500. So the consumer will pick up the newspaper and say that for an extra $500, I can get two additional speakers, let me go to the second store,” he says.
Continuing, he says that “upon going to the second store, the merchant says those extra two boxes were just to show you what it could look like. We really are only offering two speakers. So now the consumer is saying, I am paying $500 extra for something I could have gotten for $500 less at the other store, but the $500 difference is not enough for me to brave through traffic and travel to the other store to get it.”
Dr. Harriot says that if the consumer should complain, the FTC will not be interested in the additional $500, which the consumer paid, but in the fact that many consumers would have seen the advertisement and it would have diverted them from the first store to the second store.
“Now, if competition was alive and well and consumers were well informed, they would have gone to the first store and the firm that offers the best product at the lowest possible price would have secured purchases from the consumer. However, by misleading the consumers with just a picture, that merchant was able to derail or circumvent the competitive process,” he points out.
“For that reason, we would be interested in going after the merchant and if found guilty, that merchant would be liable for a fine up to $5 million,” Dr. Harriot says.
Other areas in which the FTC is active is in its public education programme. The Executive Director tells JIS News that the agency is statutorily required to educate or to pass information to the consumer and to various other sectors, about their rights and obligations.
The agency, she notes, has conducted education programmes through its website at www.jftc.com; by holding seminars, including the annual Playfair lecture; and conducting workshops for service clubs, tertiary institutions, primary schools, and local and regional judges.
“There is a programme referred to as ‘Read Across Jamaica’ and we have participated in that. We have crafted competition issues in simple formats, in story format and presented them in a reading session with the Mountain View Primary School and carried the message of competition to children, who maybe would not understand one word in the advertisement,” Mrs. Lee says.
In terms of the success of the public education programme, the Executive Director says that over time, persons are getting to be more aware of the activities of the FTC.
Turning to imperatives for this year, Mrs. Lee tells JIS News that she is hoping that the agency will be able to persuade the policy makers that there needs to be some standard in place for the motor vehicle repair sector. “So we are making some inroads there. We have done some studies, some surveys to see what exists and to try to put something in place that will put more order into that particular system,” she says.
She also notes that the FTC will continue the training of its staff and to monitor the various markets to ensure that competition is kept alive. “We are at work and trying to make sure that the market operates competitively in Jamaica,” Mrs. Lee adds.
The FTC was established in 1993 to administer the Fair Competition Act (FCA), which provides for the maintenance and encouragement of competition in the conduct of trade, business and in the supply of services in Jamaica.
The agency has the power to carry out investigations in relation to the conduct of business in Jamaica to determine if any enterprise is engaging in practices that are in contravention of the Act. Such investigations may be initiated by the FTC or carried out following a complaint.