31 August 2023
Islanders are being thanked for their responses to a consultation on proposed changes to Jersey's competition framework, which are intended to support business innovation and growth, keep prices down, and look after consumer interests.
The key changes to the Competition (Jersey) Law 2005 (the Competition Law) proposed in the consultation which was issued in February 2023 included:
- a revised framework for the control of mergers and acquisitions to reduce, wherever possible, the administrative burden for businesses and to enable the Jersey Competition Regulatory Authority (the JCRA) to better focus resources where they are most needed.
- an enhanced framework for market studies to enable the JCRA to better assess whether local markets are working well for consumers.
- a streamlined resolution process for Competition Law cases, and the creation of a more balanced framework for appeals.
- enhanced JCRA powers to seek director disqualifications, and the introduction of a new criminal cartel offence.
Responses to the consultation have been used to refine the original proposals and determine which will be brought forward. The response paper can be read on gov.je/consultations.
The Minister for Economic Development, Tourism, Sport and Culture, Deputy Kirsten Morel, said: "I am grateful to everyone who took the time to review and give their views on what is fairly complex legislation. Some of the recommendations have been incorporated into the proposals – a demonstration that consultations really do influence policymaking. While this is complex legislation, it is also important to the future of Jersey's economy, and it's important that we get it right."
A second round of consultation will take place once draft legislative proposals have been prepared, enabling stakeholders to submit any further comments they may have.
Summary of responses / amendments
Market studies are an important tool for the JCRA to assess whether there are competition issues in a market, outside of a formal Competition Law investigation. In light of the generally supportive feedback received, the Government intends to proceed with the proposal for a new legal framework for market studies, including appropriate information gathering powers for the JCRA.
In response to stakeholder feedback, at this time, it is not proposed to introduce any formal remedial powers into the market study process to ensure the envisaged regime retains a high level of flexibility and encourages positive and cooperative business engagement. If a market study gives rise to any Competition Law concerns, such issues can be addressed by the JCRA under the existing legal framework which includes appropriate procedural safeguards.
Mergers and Acquisitions
Proposals for legislative change in the mergers and acquisitions area were largely supported. Helpful feedback was received to ensure the new framework creates a light-touch regime that keeps the administrative burden for businesses to a minimum where a transaction is unlikely to affect the competitive structure of a market. At the same time, however, it is the Government's view that the regime should provide sufficient powers for the JCRA to review transactions that may harm competition in Jersey.
In response to feedback, the current appeals mechanism will be retained, as the ability for the Court to undertake a full review of the merits of a case is of significant importance and provides an important protection for businesses.
The Government intends to proceed with proposals to introduce settlement and commitments procedures in the Law, which in certain cases, can create procedural efficiency or a route to resolve competition concerns without establishing a formal finding of an infringement.
Competition Law compliance
The consultation invited views on two proposals to enhance the deterrent effect of the law and incentivise compliance, both of which were generally supported. The first concerned the introduction of a so-called criminal cartel offence applying to individuals who make a cartel agreement, such as price fixing, market sharing and bid rigging. This kind of activity is generally considered one of the most serious and damaging forms of anti-competitive behaviour. The second proposal concerned enhanced powers for the JCRA to seek the disqualification of directors whose companies have breached the Competition Law.