The Fair Trad­ing Com­mis­sion (FTC) said yes­ter­day that it ex­am­ines merg­ers and ac­qui­si­tions to en­sure that the merged firm will not op­er­ate to the detri­ment of con­sumers and oth­er com­pa­nies.

In a re­lease on Thurs­day, the FTC said the Fair Trad­ing Act was in­tend­ed to en­sure that as com­pa­nies grow with­in Trinidad and To­ba­go’s bound­aries, they do so fair­ly or through pro-com­pet­i­tive means.

The FTC stressed that it is fo­cused on iden­ti­fy­ing an­ti-com­pet­i­tive merg­ers or ac­qui­si­tions. These are ac­tions that re­duce com­pe­ti­tion, no­tably by un­fair­ly cre­at­ing or strength­en­ing a dom­i­nant play­er and are like­ly to harm con­sumers through high­er prices, re­duced choice, less in­no­va­tion or the re­stric­tion or dis­tor­tion of com­pe­ti­tion in a mar­ket. These types of trans­ac­tions are strict­ly pro­hib­it­ed un­der the act.

In a news re­lease, the FTC re­spond­ed to com­men­ta­tors who, from time to time have ques­tioned the growth of T&T’s busi­ness­es, whether those busi­ness­es are grow­ing with­in the coun­try , re­gion­al­ly or ex­tra-re­gion­al­ly.

“In some in­stances, these crit­i­cisms are mis­con­ceived,” the FTC said.

The re­lease stat­ed: “First­ly, as firms be­come larg­er, they de­liv­er ben­e­fits to the econ­o­my and so­ci­ety. They em­ploy more peo­ple, earn more for­eign ex­change and pay more tax­es. In­deed, to grow busi­ness­es takes cap­i­tal in­vest­ment and busi­ness growth is an im­por­tant as­pect of the growth of a coun­try’s out­put as mea­sured by Gross Do­mes­tic Prod­uct (GDP).”

The FTC con­tin­ued, “It is ac­cept­ed that all of these ben­e­fits ma­te­ri­alise over a pe­ri­od of time and may be sup­port­ed by sub­si­dies or oth­er in­cen­tives giv­en by the Gov­ern­ment. We al­so ex­pect that com­pa­nies are mind­ful of lim­it­ing the im­pact of en­vi­ron­men­tal degra­da­tion.

“Sec­ond­ly, there is a myr­i­ad of lo­cal and in­ter­na­tion­al agen­cies that rou­tine­ly seek to en­cour­age small and medi­um-sized en­ter­pris­es to be­come larg­er. This sup­port is recog­nised as a prop­er strat­e­gy for so­cio-eco­nom­ic de­vel­op­ment.

“Third­ly, in the case of the Cari­com Sin­gle Mar­ket and Econ­o­my, the sim­ple idea is to have and en­cour­age more Caribbean com­pa­nies to in­vest in each oth­er’s ter­ri­to­ry, there­by fos­ter­ing growth and greater Caribbean in­te­gra­tion.”

The re­lease con­tin­ued, “The FTC is ful­ly aware that merg­ers and ac­qui­si­tions are com­mon forms of busi­ness op­er­a­tions that can re­sult in ef­fi­cien­cy and in­no­va­tion gains, not on­ly to the par­ties in­volved but al­so to con­sumers through favourable sup­ply con­di­tions and pos­si­bly low­er prices for goods and ser­vices.

“Ac­cord­ing­ly, merg­ers and ac­qui­si­tions of com­pa­nies are ex­am­ined by the FTC to en­sure that the pro­posed merged firm will not un­fair­ly dom­i­nate com­pe­ti­tion to the dis­ad­van­tage of oth­er firms or con­sumers.”

The FTC made the point that where merg­ers or ac­qui­si­tions oc­cur at a re­gion­al or in­ter­na­tion­al lev­el and have no ef­fects on the lo­cal mar­ket, those trans­ac­tions may very well fall un­der the re­mit of oth­er com­pe­ti­tion agen­cies.

Ad­di­tion­al­ly, ac­cord­ing to the Com­mis­sion, where lo­cal com­pa­nies ac­quire en­ter­pris­es based in oth­er ju­ris­dic­tions and there are no ef­fects on the lo­cal mar­ket, these ac­qui­si­tions do not fall with­in the FTC’s ju­ris­dic­tion but may very well fall with­in the re­mit of oth­er com­pe­ti­tion agen­cies.