Examples of abusive behavior include excessive pricing, predatory pricing, refusal to supply, restricting access to essential facilities, discrimination against some customers without an objective justification, exclusive dealing and tied selling.
Not necessarily. Different prices may simply reflect variations in the costs of supplying different customers (higher transport costs for example) or may reflect discounts for bulk purchases. Price discrimination may, however, be an infringement of the Sections 17 or 20 of the Act where there is evidence that the prices charged are excessive or are used to lessen competition substantially (e.g. because they are predatory or are designed to foreclose markets). Of course, in these circumstances it would have to be proved that the practice is having or is likely to have the effect of substantial lessening of competition. In the case of Section 20, the supplier must be shown to hold a dominant market position.
The Act does not prevent a supplier from choosing with whom it wishes to do business. However, where the supplier is in a dominant position, it may be breaching Section 20 of the Act if it refuses to supply certain customers without objective justification.
The fact that an activity is being run at a loss is not in itself an infringement of the Act: the key question is whether there is any anti-competitive effect. In the case of dominant undertakings, Section 20 of the Act may be breached if, for example, the undertaking embarks on a pricing strategy whereby it deliberately incurs losses in order to eliminate a competitor so as to be able to charge excessive prices in the future. This is also known as predatory pricing. Note that, for Section 20 of the Act to be breached, the supplier must be shown to hold a dominant market position.
Discounts are a form of price competition and are generally to be encouraged. They often reflect the lower costs of supplying certain customers or groups of customers. They may, however, be prohibited under Sections 17 and 20 if they are anti-competitive – e.g. loyalty discounts which are conditional on the customer buying all or most of its supplies from the supplier. Of course, in these circumstances it would have to be proved that the practice is having or is likely to have the effect of substantial lessening of competition. In the case of Section 20, the supplier must be shown to hold a dominant market position.
No. The introduction of competition is to be welcomed as it encourages businesses to gain an advantage over their rivals and win more business by providing more attractive terms to customers and/or developing better products.
The objective of the Act is to ensure that all businesses, Jamaican- or foreign-owned, producing domestically or overseas, face a level playing field. This means two things. First, the Act will ensure that trade barriers are not replaced by non-tariff barriers, for example anti-competitive practices, such that the benefits of a liberalized economy do not flow to the consumers. Second, with increased competition from imports, Jamaican businesses may use the Act to prevent foreign suppliers from employing anti-competitive tactics themselves.
The relevance of the Act in an increasingly globalized economy is no different from its relevance in recently liberalized industries within Jamaica. Consider the example of the telecommunications industry in Jamaica. Even though the industry was recently liberalized and the previous monopolist is subject to intense competition from the new entrants, the Act is still relevant. It is necessary for ensuring that the previous monopolist abuses its dominance in the market and acts in an anti-competitive manner that limits the new entrants’ abilities to compete effectively. The benefits of safeguards against anti-competitive practices are clear in this example – lower prices, better service and a wide range of products. Trade liberalization is similar to the liberalization of any one sector within the Jamaican economy. The benefits to the consumers of ensuring fair competition are significant in both circumstances. The Act will therefore continue to be relevant.
You will be affected by the Act only if you have any anti-competitive practices in place. There are many ways in which you can compete effectively with foreign suppliers – or other domestic suppliers – that are not anti-competitive. The Act will not restrict your undertaking such practices; on the contrary, it encourages.