In an article entitled Power and Privilege: How the FCA Lost its Teeth, and the FTC, Its Spine published in the Sunday Gleaner of April 3, 2011, Darron Thomas, Lecturer in the School of Business Administration at the University of Technology, made several unfounded and inaccurate statements regarding the Fair Competition Act, 1993,(FCA) and the jurisdiction exercisable by the Fair Trading Commission (FTC) pursuant to that Act, which warrant clarification in the public interest.
In his article, Mr. Thomas states that ‘The Fair Trading Commission (FTC), as governed by the current FCA, has been left spineless by court rulings which suggest that cases the FTC brought before the courts were in breach of natural justice, and that it has no jurisdiction over sections of the economy such as financial services’.
Mr. Thomas’ statement indicates that there are ‘court rulings’ that ‘cases’ brought before the Jamaican courts by the FTC were in breach of natural justice. Firstly, there is no decision of any Jamaican court holding that ‘cases’ brought before the courts by the FTC were in breach of natural justice.
Mr. Thomas seems to be referring to the one decision of the Court of Appeal, namely Jamaica Stock Exchange v. FTC, which did not hold that ‘cases’ brought before the courts by the FTC were in breach of natural justice. Rather, the decision of the Court of Appeal is with respect to a particular case and not to ‘cases’ as such brought before the courts by the FTC, and addressed several issues including whether the merger of investigative and adjudicative functions contemplated in sections 5 and 7 of the FCA constitutes a breach of natural justice.
A careful reading of the court’s holding on the natural justice issue informs us that there is no bar to an investigation conducted by the FTC and subsequent adjudication by a court or tribunal. There is no gainsaying that a de-merger of investigative and adjudicative functions is attainable in the context of adjudication by a court if it is satisfied that there is a breach of the FCA either on the basis of an application before it by the FTC or an application by any person seeking damages for breaches of any of the provisions of the FCA.
In a subsequent Court of Appeal decision (FTC v. SBH Holdings Ltd), the court allowed the appellant’s (FTC) appeal against a decision of Mr. Justice James to dismiss a Motion filed by the FTC claiming respondent’s (SBH Holding) breach of the FCA and for certain relief, without a ruling on any natural justice issue implicating any jurisdictional bar to the FTC’s investigation of the issues decided by the lower court.
It is noteworthy that several other cases have been pursued by the FTC before the courts since the decision of Jamaica Stock-Exchange v. FTC in which it has obtained rulings in its favour.
In this regard, note can be taken of the fact that sections 46 and 47 of the FCA provide for enforcement of the provisions of the FCA in respect of breaches found by the court including the availability of injunctive relief.
Second, there is no decision of any Jamaican court stating that the FTC has no jurisdiction ‘over sections of the economy such as financial services’. Neither the decision of the Court of Appeal in Jamaica Stock Exchange v. FTC nor any previous or subsequent decision makes any explicit holding in this respect. The FCA is clear on its coverage of services generally (coverage extending to service of ‘any description whether industrial, trade professional or otherwise’) and, moreover, there is no provision in the FCA exempting financial services from the jurisdiction of the FTC.
For further clarification we would suggest a careful reading of section 5 of the FCA and of the exempting provision in section 3 of the FCA on what constitutes the mandate of the FTC and of the sectors or conduct exempted from the provisions of the FCA.
The FTC’s mandate over business conduct (such as misleading advertising) that may engender consumer harm includes both goods and services and the FTC has pursued such cases in court with favourable rulings, particularly in instances where the business conduct can affect the competitive environment.
Next, on the question of the relationship between companies and the extent to which agreements may be entered into that impact the competitive environment, it is important to note that section 17 of the FCA permits the FTC to examine any agreement whose purpose, effect or likely effect is the substantial lessening of competition in a market.
The legislative framework of the FCA permits individuals and companies to seek authorization for agreements that can run afoul of the FCA thereby enabling appropriate conditions to be attached for compliance with the provisions of the FCA or risk having those agreements set aside on the result of an investigation pursuant to a complaint of breach or on the basis of the FTC initiating an investigation in that regard as it is empowered to do under the FCA.
It is therefore false, misleading, unfounded and inaccurate to assert or suggest that either prescriptive or enforcement jurisdiction of the FTC has been nullified by any court decision with respect to any section of the economy or of any particular conduct not expressly exempted under the FCA.
We would suggest that adequate research precede pronouncements on matters of public importance.