WHILE the merging of companies may bring greater strength and allow for expansion or greater market share, this can cause the cost of goods and services to soar without the presence of competition.
With this in mind, the TT Fair Trading Commission (TTFTC) – in collaboration with the Caribbean Federal Trade Commission, the Caricom Competition Commission and the Ministry of Trade and Industry – launched a three-day competition law and policy merger workshop on Wednesday at Nicholas Towers, Port of Spain.
The first day focused on practical and substantive skills employed in an economics-based analytical framework for merger analysis. TTFC chairman Ronald Ramkissoon said he recognised mergers are a part of normal business activity “as evidenced by some recent significant activities in TT and the Caribbean region.”
He said declaration of the remaining parts of the TT Fair Trading Act, passed in 2006, will contribute towards creation of an efficient merger review system for a more fair, competitive and efficient marketplace.
It is hoped, TT will able to compete with the large numbers of mergers and acquisitions taking place worldwide. He said the TTFTC will review proposed mergers that exceed $50 million with the commission withholding its approval for transactions.
He anticipated that most of the deals the TTFTC reviews will be allowed to proceed but notes “there will be instances where there are concentrations that would significantly impede effective competition and adversely affect consumers in TT.”
To prevent this, TTFTC is prepared to “refuse to approve the proposed transaction, or alternatively approve, subject to certain structural or behavioural changes on the part of the merging parties, bearing in mind that in all instances we will act in a fair and transparent manner.”
He said such a workshop will help agencies to make predictive judgements about possible transactions to determine whether or not a merger will bring about efficiency and better outcomes for consumers.
Even though mergers can lead to many benefits and can help achieve sustainable growth, there are also situations where a merger may have a harmful effect on consumers and on an economy, Ministry of Trade and Industry permanent secretary Norris Herbert said in his remarks.
This can lead to higher prices, lower quality goods and service, and affect consumers, he said.
He said the workshop may provide solutions to addressing some of the major merger issues that have arisen in the past few years, especially in the Caricom region “given the economic benefits that can result through greater and more effective competition policy.”
"Fair and free competition in the market can activate and energise an economy by encouraging businesses to provide consumers with better products and services at lower prices and to also innovate and improve their practices,” he said.
Commissioner from the Caricom Competition Commission Emalene Marcus-Burnett hoped the workshops will bring a greater understanding since “merger enforcement is new to the Caribbean region."