Protocol 8: Competition Policy

Whereas Article 30 of the Original Treaty barely touches on restrictive business practices, Protocol 8 outlines an expansive competition policy for the entire Community. The policy is divided into two parts: part one focuses on rules of competition and anti-competitive practices, and part two focuses on consumer protection.

Part One: Rules of competition: Article 169 of the Revised Treaty notes that “the goal of the

Community Competition Policy shall be to ensure that the benefits expected from the establishment of the CSME are not frustrated by anti-competitive business conduct”. The protocol additionally underscores “the prohibition of anti-competitive business conduct which prevents, restricts or distorts competition or which constitutes the abuse of a dominant position in the market (and) … the promotion of consumer welfare and protection of consumer interests”.

Not only does Protocol 8 require member-states to notify the COTED of any existing laws that are inconsistent with the competition policy within 24 months of signing the Revised Treaty; but they are also obligated to abandon said legislations. The COTED then oversees a program to repeal the aforementioned legislation and inconsistencies.

The competition policy further dictates through Article 170 that “every member-state shall establish and maintain a national competition authority for the purpose of facilitating the implementation of the rules of competition”. This authority is required by the competition policy under Article 170 to fully co-operate with the Competition Commission (CC) to achieve national compliance to the rules of competition; investigate any allegations of anti-competitive business conduct referred to it by the Commission or another member-state; co-operate and exchange information with other national competition authorities to detect and prevent any anti-competitive business conduct.

241 Environmental standards were also not conceived in the Grand Anse Declaration, and therefore reflect an increase in commitments and spill-over.

4.3 Examination of the CSME

The CC is one of the few CARICOM institutions with a role at both the member-state and regional levels. Under Article 173, it is granted the mandate to apply rules of competition at the regional level with regards to anti-competitive cross-border business conduct; promote and protect rules of competition at both the national and regional levels; co-ordinate the implementation of the Community Competition Policy by the member-state; and perform any other function bestowed by other organs and bodies of CARICOM.

Article 173 also superimposes the CC on the member-states. It grants the CC a form of supremacy over private and public liability companies in member-states, and allows it to monitor anti-competitive practices of companies, and state-run enterprises. The CC can review the progress of the member-states in implementing the legal and institutional framework of the competition policy. Article 173 also places it in a position to “promote the establishment of institutions and the development and implementation of harmonized competition laws and practices by the member- states to achieve uniformity in the administration of applicable rules”.

Under cross-border functions, the CC additionally possesses the ability to investigate and arbitrate cross-border disputes in the Community. Its arbitration powers endow the commission the possibility:

in respect of cross-border transactions or transactions with cross-border effects, (to) monitor, investigate, detect, make determinations or take action to inhibit and penalize enterprises whose business conduct prejudices trade or prevents, restricts or distorts competition within the CSME. (Revised Treaty of Chaguaramas: Article 174)

It is further given the task to “make determinations regarding the compatibility of business conduct with the rules of competition and other related provisions of the Treaty”. The CC is also granted the power to “remedy or penalize anti-competitive business conduct (including ordering) the termination or nullification as the case may require, of agreements, conduct, activities or decisions prohibited by Article 170”. The CC can also direct and issue 'cease and desist' orders relating to anti-competitive business conduct by both public and private enterprises. Furthermore, the CC possesses the possibility to:

take such steps as are necessary to overcome the effects of abuse of (any) dominant position (in CARICOM) or any other business conduct inconsistent with the principles

4.3 Examination of the CSME

of fair competition, (including ordering the) payment of compensation to persons affected; (and imposing) fines for breaches of the rules of competition. (Revised Treaty of Chaguaramas:Article 174)

Additional legal provisions of Protocol 8 include details on how the CC can determine anti- competitive business conduct, including determining 'dominant position' and abuse of 'dominant position'. The Protocol therefore places the CC in an advisory role over the member-states, where in the case of uncertainty in prohibited business conduct, the member-states (under Article 174) are given the possibility to “apply to the CC for a ruling on the matter”.

The CC therefore acts without prejudice, and possesses some form of supranationality and sovereignty over CARICOM member-states.

Part Two: Consumer protection242_{: Article 169 of the Revised Treaty introduces the second}

function of Protocol 8, which is “the promotion of consumer welfare and protection of consumer interests”. Under consumer protection, the Revised Treaty binds the Community member-states to promote the interests of the CARICOM consumers. Appropriate measures highlighted by Article 184 include the requirements to:

• ensure that goods supplied and services provided in the CSME satisfy the regulatory standards and licensing codes set out in the Revised Treaty;

• provide consumers with expansive, informed and low cost goods and services through promoting fair and effective competition;

• create avenues that provide consumers with adequate information to enable the making of informed choices:

• prohibit discrimination against CARICOM goods and services.

The protocol further calls for the harmonization of any legislation in the member-states relating to aspects of trade that would impinge on consumer rights. These include unfair terms in contracts; trading practices for the supply of goods or services to consumers; removing the production and supply of any harmful or defective goods in the Community; and harmonized labeling and standards for goods. The Protocol empowers the CARICOM Regional Organization for Standards and Quality (CROSQ) to promote the process of standardization and quality control of goods in CARICOM. It also supports CARICOM member-states in harmonizing their infrastructure 242 These stipulations were not previously envisioned under the Grand Anse Declaration. However they were included

in order for the provisions of the previous Protocols to function. As such, the regulations of Protocol directly reveal some form of functional spill-over.

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through the development of certification and accreditation, and other standards and testing.

The Protocol therefore offers extensive protection and possibilities for consumer recourse in CARICOM, which were neither present in the Original treaty nor previously envisioned in the Grande Anse Declaration. It offers a monitoring mechanism for both internal and external goods and services in CARICOM member-states; creates a liberal regional platform for goods and services in CARICOM; dictates standards and practices at the local and regional level; and protect CARICOM consumers against anti-competitive business conduct.