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FTC gets nod to challenge Digicel, Claro merger

Thursday, August 31, 2017

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THE Fair Trading Commission (FTC) is all set to resume its legal battle with Digicel over the telecommunication giant's 2011 acquisition of Claro, after the Privy Council last week ruled that the FTC has jurisdiction over the acquisition.

The commission had appealed to the high court in the United Kingdom, after the Court of Appeal in 2014 ruled that while the FTC has jurisdiction in the telecommunications industry, it did not have jurisdiction over the acquisition of Claro by Digicel, which was approved by then Prime Minister Bruce Golding in August 2011 and took effect on March 1, 2012 when Claro ceased operating in the island.

But the Privy Council, in its ruling which was handed down on August 24, ruled against Digicel noting that FTC had jurisdiction over the company's acquisition of Claro.

The Privy Council ruled that the Law Lords considered three main issues and ruled in favour of the FTC.

In particular, the Privy Council held that the FTC has jurisdiction to intervene in the telecommunications market in the same way as in any other market.

It also ruled that Section 17 of the Fair Competition Act governing anti-competitive agreements applies to mergers and acquisitions.

The Law Lords also held that the FTC's jurisdiction was not affected by the approval of the agreement between Digicel and Claro by the relevant minister under the Telecommunications Act.

David Miller, executive director of the FTC, in a release Tuesday said: “This judgement paves the way for the FTC to resume its challenge in the Supreme Court of Digicel's acquisition of Claro. The decision now opens the door for divestitures in completed mergers, or instituting behavioural remedies to adjust whatever anti-competitive effects may be experienced.”

The commission had, in December 2011, challenged the merger between the two telecommunications companies, contending that it would result in a lessening of competition in the telecoms market and adversely affect customers.

Telecoms company LIME also joined in the matter on the side of the FTC.

But before the Supreme Court could hear the suit scheduled for January 2012, Digicel, through the law firm Henlin Gibson Henlin, filed a counter action challenging the FTC's jurisdiction to bring the claim.

The matter was taken to the Court of Appeal after the Supreme Court ruled that the FTC in fact had the legal standing to challenge the merger.

The FTC was represented at the Privy Council in London by attorneys Dr Delroy Beckford, Wendy Duncan and Marc Jones; while Digicel and Claro were represented by attorneys Queens Counsel St Michael Hylton and Kevin Powell.

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