KINGSTON, Jamaica – United States attorney-at-law, Joseph Krauss, has warned against Jamaica rushing into regulating mergers and acquisitions, as the country weighs the pros and cons.
Mr. Krauss, who is an expert in antitrust and economic regulation, issued the caution while delivering the 9th Annual Shirley Playfair Lecture, on the pros and cons of regulating mergers and acquisitions, on September 10, at the Knutsford Court Hotel in Kingston.
Since April this year, Jamaica took its place among many countries that have established competition laws, but have not yet enacted merger review laws. For those that have both, the time lag between the two range from a few years to several years.
“No one should think that rushing into a merger review scheme is the norm and, indeed, one should consider whether the implementation of a merger review process would benefit from delay, until what I call more “basic” competition laws and concepts become more fully developed and understood by the constituents who must abide by them,” Mr. Krauss said.
He noted that some 15 to 20 years ago, there were principally only two competition regimes one had to be concerned with, citing the European Union and the United States, and that businesses were more regional and less global, “so most companies were only concerned with competition laws in their own country.” But in sharp contrast today, he said vast changes have occurred in the emergence of a global economy and the explosion of competition regimes around the world.
The US attorney warned against the sloppy use of laws requiring the reporting of mergers and acquisitions as merger “control” laws, pointing out that it is not accurate, as they really are merger review laws. He said the distinction was important to remember, because the competition authority is not “controlling mergers and acquisitions.”
“The intent of such laws is to allow the competition authority to review a merger to determine if the merger may result in a lessening of competition. If the conclusion is no, then the authority should step away and not interfere with the acquisition any longer. But if it is determined that the merger will significantly reduce competition, then these laws allow the competition authority to act, in order to address these competitive concerns,” Mr. Krauss added.
There are now over 100 countries, both large and small, that have some form of competition law and these numbers continue to grow steadily. It is estimated that 15 to 20 countries without competition laws now are actively considering adopting one. These trends also hold true in the Latin American and Caribbean region. Some 15 countries in the region have competition laws and another six are at some stage in drafting one.
The Annual Shirley Playfair Lecture Series, is a tribute to her memory, for her pioneering role in the establishment of the Fair Trading Commission (FTC), and the one who contributed significantly to the development of competition law policy, not only here in Jamaica, but around the Caribbean region and Latin America.
Now in its 15th year, the FTC’s job is to protect Jamaican consumers from the impact of unfair competition. (JIS)
