Fair Trading Commission v Digicel Jamaica Limited and another

General competition legislation continues to apply to a sector regulated by a later specialised statute unless continued application would be inconsistent with that scheme and legislative intention to displace the general regime is sufficiently clear. Sectoral regulation and competition enforcement may operate in parallel. A statutory referral mechanism need not be exclusive where the general statute independently empowers investigation. A broadly framed prohibition on agreements having the purpose or likely effect of substantially lessening competition can extend to mergers. Approval of a licence transfer under a telecommunications statute does not immunise the transaction from separate competition controls.

The Fair Trading Commission brought proceedings against the respondents after Digicel acquired the parent company of Claro, a competing telecommunications supplier. It sought declarations, an injunction and a financial penalty under Part III of the Fair Competition Act 1993.

Sinclair-Haynes J directed preliminary determination of whether the Fair Competition Act applied, whether the Commission had jurisdiction, and whether approval under section 17 of the Telecommunications Act excluded competition-law intervention. The Court of Appeal held that section 17 of the Fair Competition Act did not apply to mergers and that ministerial approval excluded its operation. The central issues before the Board were whether the two statutory regimes operated in parallel, whether section 17 covered mergers, and what effect the minister’s approval had.

1. Appeal allowed. The Board would advise Her Majesty that the Court of Appeal’s order be set aside and the order of Sinclair-Haynes J restored.
2. Under the general principle that a particular statutory scheme prevails over a general one only where inconsistency is shown, the Telecommunications Act did not displace the Fair Competition Act 1993. The two regimes were complementary. The Telecommunications Act regulated licensing, interconnection, prices, service quality and dominant operators, but did not provide a general prohibition equivalent to Part III of the Fair Competition Act or a merger-control power. Sections 5 and 73 confirmed that both regimes were intended to operate in parallel.
3. The referral mechanism in section 5 of the Telecommunications Act was procedural. It did not condition the Commission’s jurisdiction on a referral by the Office. The Commission retained power under section 5(1)(a) and (d) of the Fair Competition Act to act on its own initiative or at the request of an affected person.
4. Section 17(1) of the Fair Competition Act was expressed in general terms and applied to any agreement having the purpose or likely effect of substantially lessening competition. The examples in subsection (2) were non-exhaustive. An agreement by which two competitors merged therefore fell within subsection (1), notwithstanding the treatment of interconnected companies as a single enterprise after completion under section 2(2)(b). The Board referred to Europemballage Corporation and Continental Can Co Inc v Commission of the European Communities [1973] ECR 215 and British American Tobacco and R J Reynolds Industries Inc v Commission of the European Communities [1987] ECR 4487 as illustrating the same approach under the European competition regime.
5. Approval under section 17(2) and (3) of the Telecommunications Act concerned the transferee’s qualifications and willingness to comply with licence obligations under section 11(1)(a) and (b). It did not determine compliance with the separate prohibition on anti-competitive conduct in Part III of the Fair Competition Act. Ministerial approval therefore did not shield the merger from the Commission’s statutory functions. The parties were invited to make written submissions on costs within 21 days.

• Privy Council: The appeal from the Court of Appeal of Jamaica was allowed. The Court of Appeal’s order was set aside and the order of Sinclair-Haynes J restored.
• Court of Appeal of Jamaica: The court agreed that the two statutory schemes operated in parallel, but held that section 17 of the Fair Competition Act 1993 did not apply to mergers and that ministerial approval under the Telecommunications Act excluded its operation.
• Supreme Court of Jamaica: Sinclair-Haynes J decided that the two schemes operated in parallel and that section 17 of the Fair Competition Act applied to mergers.